CoinShares Bitcoin ETF

What they do

The Trust holds bitcoin and values its Shares daily based on the CME CF Bitcoin Reference Rate New York Variant (the Index), with the objective that Shares reflect the performance of bitcoin less liabilities and expenses. Shares are sold and redeemed in Baskets of 5,000 Shares, and the Trust uses Coinbase, BitGo, and Komainu as custodians, with Coinbase, Inc. as prime broker and U.S. Bank as cash custodian.

Revenue drivers

• Sponsor fee — The Trust generates revenue through a sponsor fee charged to the Trust, based on its net asset value, which is the primary income source. Fee details are not specified in the provided excerpts.
• Bitcoin appreciation — The value of the Trust's assets and its shares is directly tied to bitcoin price movements; rising bitcoin prices increase the Trust's net asset value and, consequently, the sponsor fee, though the Trust does not trade bitcoin for profit.
• Creation/redemption activity — The Trust issues and redeems Shares in Baskets, and the associated transaction fees or in-kind mechanisms may generate income, though specifics are not in the excerpts.

Recent performance

For fiscal year 2024, the Trust reported net income of $307.0 million and diluted EPS of $11.59. In fiscal 2025, net income swung to a loss of $49.7 million, with diluted EPS of -$2.20. As of June 30, 2026, total assets were $342.4 million, total liabilities were $77,541, and shareholder equity was $342.4 million. Cash and equivalents were reported as $0.00 as of December 31, 2023.

Strategy

The Trust's strategy is to passively hold bitcoin, providing investors with a cost-effective and convenient way to invest in bitcoin without directly managing the digital asset. It uses multiple custodians (Coinbase, BitGo, Komainu) and a prime broker (Coinbase, Inc.) to safeguard and facilitate transactions. The Sponsor is authorized to substitute the Index valuation methodology at its sole discretion without shareholder approval. The Trust has no stated active investment strategy beyond reflecting bitcoin performance.

Risks

• Bitcoin price volatility — Bitcoin has experienced extreme volatility, and sharp price declines can materially reduce the value of the Trust's shares and net assets.
• Early-stage digital asset networks — The Bitcoin Network and digital asset technologies are in early development, and potential for malicious activity or network failures could adversely affect the Trust.
• Regulatory and legal uncertainty — Changes in laws or regulations regarding bitcoin, taxes, or digital assets could negatively impact the Trust's operations and share value.
• Dependence on custodians and service providers — The Trust relies on third-party custodians, prime broker, and administrator; disruptions or failures in their systems could harm the Trust's operations and bitcoin holdings.

Outlook

Management does not provide forward guidance on bitcoin prices or Trust performance, but acknowledges ongoing risks from market volatility and regulatory changes. The 10-Q includes forward-looking statements indicating potential impacts from general economic conditions, technology disruptions, and litigation. The Trust continues to operate passively, with no stated plans for expansion or changes to its investment strategy.