iShares Bitcoin Trust ETF

What they do

The Trust holds bitcoin with Coinbase Custody Trust Company, LLC as primary custodian, and issues and redeems shares only in Baskets of 40,000 shares. It trades on NASDAQ under IBIT and values bitcoin using the CF Benchmarks Index (CME CF Bitcoin Reference Rate New York Variant). The Trust is not actively managed and does not seek profit from bitcoin price movements; it only buys/sells bitcoin to support creations, redemptions, and pay expenses.

Revenue drivers

• Sponsor's Fee — The Trust's only ordinary expense is the Sponsor's fee, a percentage of net asset value; this drives the Sponsor's revenue, though no explicit rate is given in the excerpts.
• Bitcoin price appreciation — Net asset value and per-share value directly track bitcoin's price; higher bitcoin prices increase the Trust's NAV and the asset base on which fees are calculated.
• Share creations — New Baskets (40,000 shares each) are issued in exchange for cash or bitcoin, increasing outstanding shares and total assets under management.
• Cash creations via Prime Execution Agent — The Trust trades with third parties directly or through Coinbase Prime to convert cash into bitcoin for creations, supporting asset growth.

Recent performance

Net asset value increased from $51.52 billion at December 31, 2024 to $67.40 billion at December 31, 2025, while outstanding shares rose from 970.44 million to 1.36 billion. The Trust reported annual net income of $14.23 billion in 2024 and a net loss of $8.97 billion in 2025, with diluted EPS of $26.93 and -$7.46, respectively. Operating cash flow was negative in both years, -$37.31 billion in 2024 and -$19.91 billion in 2025, reflecting bitcoin purchases and sales. The 10-Q for 2026 notes the Trust continues to operate with the same structure and liquidity sources.

Strategy

The Trust's stated strategy is to passively reflect the performance of bitcoin's price before expenses, with no attempt to profit from or mitigate price changes. It uses designated custodians, including Coinbase Custody and Anchorage Digital Bank, and a prime execution agent (Coinbase Inc.) to handle bitcoin trades for creations and redemptions. The Sponsor covers most Trust expenses, so the only ordinary expense is the Sponsor's fee. The Trust does not engage in any active management or hedging activities.

Risks

• Bitcoin price volatility — Bitcoin has experienced extreme volatility, including a 77% drawdown in 2021-2022 and a 14% drop in October 2025, which could cause the Shares to lose all or substantially all of their value.
• Digital asset market disruptions — The October 2025 Flash Crash triggered liquidations of up to $20 billion in digital asset collateral, service interruptions, and forced unwinding across exchanges, which could impair trading and pricing.
• Custody and operational risks — The Trust relies on Coinbase Custody and Anchorage Digital Bank for bitcoin custody; any failure or breach could result in loss of the Trust's bitcoin.
• Regulatory and tax changes — Changes in laws or regulations, including tax rules, could adversely affect the Trust's operations and the value of the Shares.

Outlook

The Trust is not aware of any trends that would materially change its liquidity needs; its only source of liquidity is sales of bitcoin. Management notes that digital asset prices have continued to fluctuate in 2026 and the Trust may experience further volatility. As of the latest 10-Q, the Trust continues to issue and redeem shares in Baskets and values its bitcoin daily using the CF Benchmarks Index.