Bitwise 10 Crypto Index ETF 10-Q for FY2025 Q2
Bitwise 10 Crypto Index ETF (BITW)
About this 10-Q
Bitwise 10 Crypto Index ETF filed this 10-Q on August 7, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net income
- $315.29M
- compared with a net loss of $174.08M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from to
Commission File Number
(Exact Name of Registrant as Specified in Its Charter)
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Securities registered pursuant to Section 12(b) of the Act: None
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Securities registered pursuant to Section 12(g) of the Act: Bitwise 10 Crypto Index Fund (BITW) Shares
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Number of shares of the registrant’s common stock outstanding as of August 7, 2025:
Table of Contents
Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” with respect to the financial conditions, results of operations, plans, objectives, future performance and business of Bitwise 10 Crypto Index Fund (BITW) (the “Trust”). Statements preceded by, followed by or that include words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of these terms and other similar expressions are intended to identify some of the forward-looking statements. All statements (other than statements of historical fact) included in this Quarterly Report that address activities, events or developments that will or may occur in the future, including such matters as changes in market prices and conditions, the Trust’s operations, the plans of Bitwise Investment Advisers, LLC (the “Sponsor”) and references to the Trust’s future success and other similar matters are forward-looking statements. These statements are only predictions. Actual events or results may differ materially from such statements. These statements are based upon certain assumptions and analyses the Sponsor made based on its perception of historical trends, current conditions and expected future developments, as well as other factors appropriate in the circumstances.
Whether or not actual results and developments will conform to the Sponsor’s expectations and predictions, however, is subject to a number of risks and uncertainties, including, but not limited to, those described in Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q and in Part I, Item 1A. Risk Factors or other sections of the Trust’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on February 20, 2025. Forward-looking statements are made based on the Sponsor’s beliefs, estimates and opinions on the date the statements are made and neither the Trust nor the Sponsor is under a duty or undertakes an obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, other than as required by applicable laws. Investors are therefore cautioned against relying on forward-looking statements. Factors which could have a material adverse effect on the Trust's business, financial condition or results of operations and future prospects or which could cause actual results to differ materially from the Trust's expectations include, but are not limited to:
i
Unless otherwise stated or the context otherwise requires, the terms “we,” “our” and “us” in this Quarterly Report on Form 10-Q refer to the Sponsor acting on behalf of the Trust.
ii
Glossary
This glossary highlights some of the industry and other terms used elsewhere in this Quarterly Report on Form 10-Q but is not a complete list of all the terms used herein. Each of the following terms has the meaning set forth below:
“Airdrops” - means a method to promote the launch and use of new Crypto Assets by providing a small amount of such new Crypto Assets to the private wallets or exchange accounts that support the new Crypto Asset and that hold existing related Crypto Assets.
“Bitcoin” or “BTC” - means a type of Crypto Asset based on an open-source cryptographic protocol existing on the Bitcoin network, comprising one type of the Crypto Assets underlying the Trust's Shares. The native Crypto Asset for the Bitcoin network is Bitcoin.
“Blockchain” - means the public transaction ledger of a Crypto Asset’s network on which transactions are recorded.
“Consensus Algorithm” - means the algorithm at the heart of the Blockchain system that enforces the convergence of all ledgers over time.
“Crypto Assets” - means a Crypto Asset designed to work as a store or value and/or medium of exchange wherein individual Crypto Asset ownership records are stored in a ledger, a computerized database using cryptography to secure transaction records, to control the creation of additional Crypto Assets and to verify the transfer of Crypto Asset ownership.
“Crypto Asset Network” - means the online, end user to end user network hosting the public transaction ledger, known as the Blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing the Crypto Asset’s network.
“Crypto Asset Exchanges” - means a dealer market, a brokered market, principal to principal market or exchange market on which Crypto Assets are bought, sold, and traded.
“Custodian” - means Coinbase Custody Trust Company, LLC. On behalf of the Trust, the Custodian holds the Portfolio Crypto Assets.
“Emissions” - means regular awards provided to holders of Crypto Assets in the form of Crypto Asset grants, and often in the form of the “gas” that powers transactions on the relevant Crypto Asset Network.
“Hard Fork” - occurs when there is a change in the set of rules governing a Blockchain that makes it more restrictive than the previous set of rules in place.
“Index” - means the Bitwise 10 Large Cap Crypto Index, the benchmark index for the Trust.
“Index Provider” - means Bitwise Index Services, LLC, an affiliate of the Trust that is controlled by the same parent entity as the Sponsor. The Index Provider administers the Index.
“Miners” - means stakeholders who help process transactions and ensure that the distributed ledgers that make up a proof of work Blockchain network stay consistent with one another.
“Mining” - means the act of solving computational puzzles through which transactions with Crypto Assets are verified and added to a proof of work Blockchain digital ledger in exchange for a Crypto Asset as a reward.
“NAV” - means net asset value.
"NAV of the Trust" - means the sum of the assets and liabilities of the Trust.
“NAV Per Share” - means the NAV of the Trust calculated on a per share basis.
“Portfolio Crypto Assets” - means the group of selected Crypto Assets that are held by the Trust.
“Shareholders” - means holders of common units of fractional undivided beneficial interest of the Trust.
iii
EMERGING GROWTH COMPANY STATUS
The Trust is an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act (the “JOBS Act”) and, as such, may elect to comply with certain reduced reporting requirements. For as long as the Trust is an emerging growth company, unlike other public companies, it will not be required to:
The Trust will cease to be an “emerging growth company” upon the earliest of (i) when it has $1.235 billion or more in total annual gross revenues during its most recently completed fiscal year; (ii) when it is deemed to be a large accelerated filer under Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934, as amended; (iii) when it has issued more than $1.0 billion of non-convertible debt over a three-year period; or (iv) the last day of the fiscal year following the fifth anniversary of its initial public offering.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Trust has chosen not to “opt out” of such extended transition period, and as a result, the Trust will take advantage of such extended transition period.
iv
Industry and Market Data
Although we are responsible for all disclosure contained in this Quarterly Report on Form 10-Q, in some cases we have relied on certain market and industry data obtained from third-party sources that we believe to be reliable. Market estimates are calculated by using independent industry publications in conjunction with our assumptions regarding the Crypto Asset industry and market. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the heading “Statement Regarding Forward-Looking Statements.”
v
PART I – FINANCIAL INFORMATION:
Item 1. Financial Statements (Unaudited)
Bitwise 10 Crypto Index Fund
(formerly known as Bitwise 10 Private Index Fund, LLC)
Financial Statements
June 30, 2025 (unaudited) and December 31, 2024
1
Bitwise 10 Crypto Index Fund
Table of Contents
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2
Bitwise 10 Crypto Index Fund
Statements of Financial Condition
June 30, 2025 (unaudited) and December 31, 2024
Assets |
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June 30, 2025 |
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December 31, 2024 |
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Investments in Crypto Assets, at fair value (cost $ |
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Cash |
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Other assets |
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Total Assets |
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Liabilities |
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Management fee payable |
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Subscriptions received in advance |
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Total Liabilities |
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Net Assets |
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Net Assets consist of: |
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Paid-in-capital |
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Accumulated net investment gain (loss) |
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Accumulated net realized gain (loss) on investments in Crypto Assets |
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Net unrealized appreciation (depreciation) on investments in Crypto Assets |
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Net Assets |
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Shares issued and outstanding, |
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Net asset value per share |
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See accompanying notes to financial statements (unaudited).
3
Bitwise 10 Crypto Index Fund
Schedules of Investments
June 30, 2025 (unaudited)
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Fair Value |
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Percentage of Net Assets |
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Investments in Crypto Assets, at fair value * |
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Bitcoin |
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Solana |
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Cardano |
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Sui |
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Chainlink |
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Avalanche |
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Litecoin |
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Polkadot |
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Total investments in Crypto Assets, at fair value |
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Other liabilities in excess of assets |
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Net Assets |
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December 31, 2024
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Fair Value |
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Percentage of Net Assets |
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Investments in Crypto Assets, at fair value * |
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Bitcoin |
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Ethereum |
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Ripple |
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Solana |
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Cardano |
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Avalanche |
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Chainlink |
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Polkadot |
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Bitcoin Cash |
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NEAR Protocol |
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Total investments in Crypto Assets, at fair value |
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Other assets in excess of liabilities |
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Net Assets |
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* Crypto Assets do not have a singular country or geographic region, therefore country information is omitted.
See accompanying notes to financial statements (unaudited).
4
Bitwise 10 Crypto Index Fund
Statements of Operations (Unaudited)
For the three and six months ended June 30, 2025 and 2024
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Three months ended June 30, |
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Six months ended June 30, |
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2024 |
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Income |
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Other |
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Expenses |
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Management fee |
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Transaction and other fees |
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Total Expenses |
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Net investment gain (loss) |
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Net realized and change in unrealized gain (loss) on investments |
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Net realized gain (loss) from Crypto Assets |
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Net change in unrealized appreciation (depreciation) from Crypto Assets |
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Net realized and change in unrealized gain (loss) on investments |
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Net increase (decrease) in Net Assets resulting from operations |
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$ |
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See accompanying notes to financial statements (unaudited).
5
Bitwise 10 Crypto Index Fund
Statements of Changes in Net Assets (Unaudited)
For the three and six months ended June 30, 2025 and 2024
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Three months ended June 30, |
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Six months ended June 30, |
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Increase (decrease) in net assets from operations: |
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Net investment gain (loss) |
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Net realized gain (loss) from Crypto Assets |
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Net change in unrealized appreciation (depreciation) from Crypto Assets |
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Net increase (decrease) in net assets resulting from operations |
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Net Assets: |
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Beginning of Period |
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End of Period |
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Change in Shares outstanding: |
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Shares outstanding at beginning of period |
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Subscriptions |
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Net increase (decrease) in shares |
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Shares outstanding at end of period |
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See accompanying notes to financial statements (unaudited).
6
Bitwise 10 Crypto Index Fund
Notes to Comparative Financial Statements (unaudited)
1. Organization
Bitwise 10 Crypto Index Fund (the “Trust”) is a Delaware Statutory Trust that commenced operations on November 22, 2017. The Trust’s name was changed from “Bitwise Hold 10 Private Index Fund, LLC” on September 24, 2018, and changed again from “Bitwise 10 Private Index Fund, LLC” on May 1, 2020 when it was also simultaneously converted from a Delaware Limited Liability Company to a Delaware Statutory Trust. Bitwise Investment Advisers, LLC, is the sponsor (“Sponsor”) and investment adviser of the Trust. Bitwise Asset Management, Inc., an affiliate of the Sponsor, served as the Manager before the Trust’s conversion to a Delaware Statutory Trust. Delaware Trust Company is the Trustee of the Trust, and American Stock Transfer & Trust Company is the Transfer Agent of the Trust.
On December 9, 2020, the Trust received notice that its Shares were qualified for public trading on the OTCQX U.S. Marketplace of the OTC Markets Group, Inc. (“OTCQX”). The Trust’s trading symbol on OTCQX is “BITW” and the CUSIP number for its Shares is
The Trust’s principal investment objective is to invest in a portfolio of broad-based Crypto Assets that tracks the Bitwise 10 Large Cap Crypto Index (the “Index”), which is administered by Bitwise Index Services, LLC (the "Index Provider"), an affiliate of the Sponsor. The Trust rebalances monthly alongside the Index to stay current with changes.
All shareholders are subject to a
Securitize Fund Services LLC, formerly Theorem Fund Services, LLC (the “Administrator”) serves as the Trust’s Administrator and performs certain administrative and accounting services on behalf of the Trust.
7
Bitwise 10 Crypto Index Fund
Notes to Comparative Financial Statements (unaudited)
2. Significant Accounting Policies
Basis of Presentation
The financial statements are expressed in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Trust is an investment company and follows the specialized accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC” or “Codification”) Topic 946, Financial Services—Investment Companies.
The accompanying comparative financial statements are unaudited, but in the opinion of management of the Sponsor, contain all adjustments (which include normal recurring adjustments) considered necessary to present fairly the financial position of the Trust as of June 30, 2025 and December 31, 2024 and the results of operations for the three and six months ended June 30, 2025 and 2024. These interim financial statements should be read in conjunction with the Trust’s annual report on Form 10-K for the year ended December 31, 2024. Interim period results are not necessarily indicative of results for a full-year period.
Pursuant to the Statement of Cash Flows Topic of the Codification, the Trust qualifies for an exemption from the requirement to provide a statement of cash flows and has elected not to provide a statement of cash flows.
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Cash
Cash represents cash deposits held at financial institutions and Crypto Asset exchanges. Cash in a bank deposit account, at times, may exceed U.S. federally insured limits. The Trust has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on such bank deposits.
Investments and Valuation
The Trust’s investments in Crypto Assets are stated at fair value. For a further discussion of the Trust’s calculations of valuation, please see “Calculation of Valuation” in the footnote below. Crypto Assets are generally valued using prices as reported on reputable and liquid exchanges and may utilize an average of bid and ask quotes using closing prices provided by such exchanges as of the date and time of determination ("Calculation of Valuation" below). Factors such as the recent stability of the exchange, current liquidity of the exchange, and recent price activity of an exchange will be considered in the determination of which exchanges to utilize.
Crypto Asset transactions are recorded on the trade date. Realized gains and losses from Crypto Asset transactions are determined using the identified cost method. Any change in net unrealized gain or loss is reported in the statements of operations. Commissions and other trading fees are reflected as an adjustment to cost or proceeds at the time of the transaction.
The Trust intermittently receives Airdrops of new Crypto Assets. The use of Airdrops is generally to promote the launch and use of new Crypto Assets by providing a small amount of the new Crypto Assets to the private wallets or exchange accounts of holders of existing related Crypto Assets. Airdropped Crypto Assets can have substantially different Blockchain technology that has no relation to any existing Crypto Asset, and many Airdrops may be without value. The Trust will only record receipt of airdropped Crypto Assets if, when received, the airdropped Crypto Assets have value. Crypto Assets received from Airdrops have no cost basis and the Trust recognizes other income equal to the fair value of the new Crypto Asset received. There were no Airdrops recognized or unrecognized during the six month period ended June 30, 2025 and year ended December 31, 2024.
8
Bitwise 10 Crypto Index Fund
Notes to Comparative Financial Statements (unaudited)
Calculation of Valuation
Effective August 31, 2021, the process that the Sponsor developed for identifying a principal market, as described in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, which outlines the application of fair value accounting, was to begin by identifying publicly available, well-established and reputable Crypto Asset exchanges selected by the Sponsor and its affiliates in their sole discretion, and then calculating, on each valuation period, the highest volume exchange during the 60 minutes prior to 4:00 pm ET for each asset. In evaluating the markets that could be considered principal markets, the Trust considered whether or not the specific markets were accessible to the Trust, either directly or through an intermediary, at the end of each period.
Effective February 13, 2023, the Sponsor adapted a nearly identical principal market valuation process, with no material impact to the Trust, using a third-party valuation vendor, Lukka, Inc., to identify publicly available, well-established and reputable Crypto Asset exchanges selected by Lukka, Inc. in their sole discretion, including Binance, Bitfinex, Bitflyer, Bitstamp, Bullish, Coinbase, Crypto.com, Gate.io, Gemini, HitBTC, Huobi, itBit, Kraken, KuCoin, LMAX, MEXC Global, OKX and Poloniex, and then calculating, on each valuation period, the highest volume exchange during the 60 minutes prior to 4:00 pm ET for each asset. In evaluating the markets that could be considered principal markets, the Trust considered whether the specific markets were accessible to the Trust, either directly or through an intermediary, at the end of each period.
The following provides an overview of the Principal Market and the Principal Market Prices for Portfolio Crypto Assets that comprised the majority of the Trust’s assets for the six-month period ended June 30, 2025.
Crypto Asset |
|
Principal Market Price |
|
|
Principal |
|
Bitcoin (BTC) |
|
$ |
|
|
Crypto.com |
|
Ethereum (ETH) |
|
$ |
|
|
Crypto.com |
|
Ripple (XRP) |
|
$ |
|
|
Coinbase |
|
Solana (SOL) |
|
$ |
|
|
Coinbase |
|
Cardano (ADA) |
|
$ |
|
|
Coinbase |
|
Sui (SUI) |
|
$ |
|
|
Coinbase |
|
Chainlink (LINK) |
|
$ |
|
|
Coinbase |
|
Avalanche (AVAX) |
|
$ |
|
|
Coinbase |
|
Litecoin (LTC) |
|
$ |
|
|
Coinbase |
|
Polkadot (DOT) |
|
$ |
|
|
Coinbase |
|
3. Fair Value Measurements
The Trust carries its investments at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. Fair value investments are not adjusted for transaction costs.
In determining fair value, the Trust uses a single, principal market approach. A fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs are to be used when available. The fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.
Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. These inputs may include (a) quoted prices for similar assets in active markets, (b) quoted prices for identical or similar assets in markets that are not active, (c) inputs other than quoted prices that are observable for the asset, or (d) inputs derived principally from or corroborated by observable market data by correlation or other means.
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a wide variety of factors, including the type of investment, whether the investment is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the transaction.
9
Bitwise 10 Crypto Index Fund
Notes to Comparative Financial Statements (unaudited)
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement.
The following summarizes the Trust’s assets accounted for at fair value at June 30, 2025.
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments in Crypto Assets, at fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following summarizes the Trust’s assets accounted for at fair value at December 31, 2024.
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments in Crypto Assets, at fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
During the periods ended June 30, 2025 and December 31, 2024, there were
4. Risks and Uncertainties
Crypto Assets
Crypto Assets are loosely regulated and there is no central marketplace for currency exchange. Supply is determined by a computer code, not by a central bank, and prices have been extremely volatile. Crypto Asset exchanges have been closed due to fraud, failure, or security breaches. Any of the Trust’s assets that reside on an exchange that closes may be lost. At June 30, 2025, Crypto Assets of approximately $
Several factors may affect the price of Crypto Assets, including, but not limited to: supply and demand, investors’ expectations with respect to the rate of inflation, interest rates, currency exchange rates, or future regulatory measures (if any) that restrict the trading of Crypto Assets or the use of Crypto Assets as a form of payment. There is no assurance that Crypto Assets will maintain their long-term value in terms of purchasing power in the future, or that acceptance of Crypto Asset payments by mainstream retail merchants and commercial businesses will continue to grow.
Crypto Asset Regulation
As Crypto Assets have grown in popularity and market size, various countries and jurisdictions have begun to develop regulations governing the Crypto Assets industry. To the extent that future regulatory actions or policies limit the ability to exchange Crypto Assets or utilize them for payments, the demand for Crypto Assets will be reduced. Furthermore, regulatory actions may limit the ability of end-users to convert Crypto Assets into fiat currency (e.g., U.S. dollars) or use Crypto Assets to pay for goods and services. Such regulatory actions or policies could result in a reduction of demand, and in turn, a decline in the underlying Crypto Asset unit prices.
The effect of any future regulatory change on the Trust or Crypto Assets in general is impossible to predict, but such change could be substantial and adverse to the Trust and the value of the Trust’s investments in Crypto Assets.
Custody of Crypto Assets
Coinbase Custody Trust Company, LLC (the “Custodian”) serves as the Trust’s Custodian for Crypto Assets for which qualified custody is available. The Custodian is subject to change in the sole discretion of the Sponsor. At June 30, 2025 and December 31, 2024, Crypto Assets of approximately $
Crypto Asset Trading is Volatile and Speculative
Crypto Assets represent a speculative investment and involve a high degree of risk. Prices of Crypto Assets have fluctuated widely for a variety of reasons including uncertainties in government regulation and may continue to experience significant price fluctuations. If
10
Bitwise 10 Crypto Index Fund
Notes to Comparative Financial Statements (unaudited)
Crypto Asset markets continue to be subject to sharp fluctuations, Shareholders may experience losses as the value of the Trust’s investments decline. Even if Shareholders are able to hold their Shares in the Trust for the long-term, their Shares may never generate a profit, since Crypto Asset markets have historically experienced extended periods of flat or declining prices in addition to sharp fluctuations.
Over-the-Counter Transactions
Some of the markets in which the Trust may execute its transactions are “over-the-counter” or “interdealer” markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight as are members of “exchange-based” markets. This exposes the Trust to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem, thus causing the Trust to suffer a loss. Such “counterparty risk” is accentuated for Crypto Assets where the Trust has concentrated its transactions with a single or small group of counterparties. The Trust is not restricted from dealing with any particular counterparty or from concentrating any or all of its transactions with one counterparty. Moreover, the Trust has no internal credit function that evaluates the creditworthiness of its counterparties. The ability of the Trust to transact business with any one or number of counterparties, the lack of any meaningful and independent evaluation of such counterparty’s financial capabilities and the absence of a regulated market to facilitate settlement may increase the potential for losses by the Trust.
No FDIC or SIPC Protection
The Trust is not a banking institution or otherwise a member of the Federal Deposit Insurance Corporation (“FDIC”) or the Securities Investor Protection Corporation (“SIPC”). Accordingly, deposits or assets held by the Trust are not subject to the protections enjoyed by depositors with FDIC or SIPC member institutions. The Trust’s Crypto Asset custodians do however carry bespoke insurance policies related to the Crypto Assets over which they provide custody.
The Trust must adapt to technological change in order to secure and safeguard client accounts. While management believes they have developed an appropriate proprietary security system reasonably designed to safeguard the Trust’s Crypto Assets from theft, loss, destruction, or other issues relating to hackers and technological attack, such assessment is based upon known technology and threats. To the extent that the Trust is unable to identify and mitigate or stop new security threats, the Trust’s Crypto Assets may be subject to theft, loss, destruction, or other attack, which could have a negative impact on the performance of the Trust or result in loss of the Trust’s Crypto Assets.
Risks Associated With a Crypto Asset Majority Control
Since Crypto Assets are virtual and transactions in such currencies reside on distributed networks, governance of the underlying distributed network could be adversely altered should any individual or group obtain
Transaction Authentication
As of the date of these financial statements, the transfer of Crypto Assets from one party to another typically relies on an authentication process by an outside party known as a miner or validator. In exchange for compensation, the miner or validator will authenticate the transfer of the currency through the solving of a complex algorithm known as a proof of work, or will vouch for the transfer through other means, such as a proof of stake. Effective transfers of and therefore realization of Crypto Assets, and tokens are dependent on interactions from these miners or validators. In the event that there were a shortage of miners to perform this function, that shortage could have an adverse effect on either the fair value or realization of the Crypto Assets.
Other Risks
Management continues to evaluate the impact of current or anticipated military conflict, including between Russia and Ukraine, terrorism, sanctions; and other geopolitical events; as well as adverse developments in the economy, the capital markets and the Blockchain markets, including rising energy costs, inflation and interest rates, in the United States and globally; and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, and global health epidemics. Management has concluded that while it is reasonably possible that these events could have a negative effect on the financial performance and operations of the Trust, the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
11
Bitwise 10 Crypto Index Fund
Notes to Comparative Financial Statements (unaudited)
5. Income Taxes
The Trust is classified as a partnership for U.S. federal income tax purposes. The Trust does not record a provision for U.S. federal, U.S. state, or local income taxes because the Shareholders report their share of the Trust’s income or loss on their income tax returns. The Trust files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states and foreign jurisdictions.
The Trust is required to determine whether its tax positions are more likely than not to be sustained on examination by the applicable taxing authority, based on the technical merits of the position. Tax positions not deemed to meet a more likely than not threshold would be recorded as a tax expense in the current year. As of June 30, 2025 and December 31, 2024, the Trust has determined that
6. Shareholders’ Equity
Subscriptions
As of November 18, 2021, the Sponsor to the Trust has closed the acceptance of all subscriptions to the Bitwise 10 Crypto Index Fund, pursuant to its rights under Sections 5 and 6 of the Trust Agreement.
In-Kind Subscriptions
The Sponsor may, at its sole discretion, accept Crypto Assets (“In-Kind Investments”) in lieu of, or in addition to, cash as payment for investment in the Trust. Such In-Kind Investments are valued using the same Crypto Asset prices as per the Trust’s valuation policy at any given valuation date as of 4:00 pm ET on the date of the subscription. As of November 18, 2021, the Sponsor to the Trust has closed the acceptance of all subscriptions to the Bitwise 10 Crypto Index Fund, pursuant to its rights under Sections 5 and 6 of the Trust Agreement.
Withdrawals
In connection with the Trust seeking approval for the quotation of its Shares on OTCQX, the Trust halted the withdrawal program on October 7, 2020.
7. Related Party Transactions
The Trust considers the Sponsor, its directors and employees to be related parties of the Trust. In consideration for the management services to be provided to the Trust, the Sponsor will receive from the Trust a management fee (the “Management Fee”) payable monthly, in arrears at a rate of
The Sponsor may, in its discretion, waive, reduce, or rebate the Management Fee with respect to any Shareholder or group of Shareholders (which group may, but need not, include all Shareholders), including affiliates of the Sponsor; provided that such waiver, reduction, or rebate shall not increase the Management Fee payable in respect of any other Shareholder.
For the periods January 1, 2025 to June 30, 2025 and January 1, 2024 to June 30, 2024, the Shareholders were charged Management Fees of
12
Bitwise 10 Crypto Index Fund
Notes to Comparative Financial Statements (unaudited)
8. Indemnifications
9. Financial Highlights
The following presents the financial highlights for the three and six months ended June 30, 2025 and 2024.
|
|
Three months ended |
|
|
Three months ended |
|
|
|
Six months ended June 30, 2025 |
|
|
Six months ended June 30, 2024 |
|
|
||||
Per Share Performance |
|
Investor Class |
|
|
Investor Class |
|
|
|
Investor Class |
|
|
Investor Class |
|
|
||||
(for a share outstanding throughout the period) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net asset value per share at beginning of period |
|
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net increase (decrease) in Net Assets resulting from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized and change in unrealized gain (loss) on investments (1) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|||
Net investment gain (loss) (1) |
|
|
( |
) |
|
|
( |
) |
|
|
|
( |
) |
|
|
( |
) |
|
Net increase (decrease) in Net Assets resulting |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net asset value per share at end of period |
|
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total return |
|
|
|
% |
|
( |
) |
% |
|
|
|
% |
|
|
% |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Ratios to average net asset value(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expenses |
|
|
|
% |
|
|
% |
|
|
|
% |
|
|
% |
||||
Net investment loss |
|
|
( |
) |
% |
|
( |
) |
% |
|
|
( |
) |
% |
|
( |
) |
% |
Net Assets at end of period |
|
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
|
||||
Average net assets(3) |
|
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
|
||||
Portfolio turnover |
|
|
|
% |
|
|
% |
|
|
|
% |
|
|
% |
||||
Total returns are calculated based on the change in value of a share during the period. The total return and the ratios to average net asset value are calculated for each class as a whole. An individual Shareholder’s return and ratios may vary based on the timing of capital transactions. Ratios have been annualized for the periods ended June 30, 2025 and 2024; total returns and portfolio turnover have not been annualized.
13
Bitwise 10 Crypto Index Fund
Notes to Comparative Financial Statements (unaudited)
10. Segment Reporting
In 2024, the Trust adopted FASB Accounting Standards Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures (“ASU 2023-07”). Adoption of the new standard impacted financial statement disclosures only and did not affect the Trust’s financial position or the results of its operations. An operating segment is defined in Topic 280 as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity’s Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. Selective members of the of the Trust’s Sponsor, act as the Trust’s CODM. The Trust represents a operating segment, as
11. Subsequent Events
The Sponsor has evaluated subsequent events through August 7, 2025, the date the financial statements were available to be issued, and has determined that there are no material subsequent events that require disclosure.
14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with, and is qualified in its entirety by reference to our unaudited financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, which have been prepared in accordance with U.S. GAAP. The following discussion may contain forward-looking statements based on current expectations that involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements as a result of various factors including those set forth under “Part II. Item 1A. Risk Factors,” “Statement Regarding Forward-Looking Statements” or in other sections of this Quarterly Report on Form 10-Q.
Trust Overview
The Trust is a Delaware Statutory Trust that issues units of fractional undivided beneficial interest in the form of shares, which represent ownership in the Trust (“Shares”). All Shareholders of “investor class” units received 10 Shares for each unit owned prior to the corporate action date, and all Shareholders of “institutional class” units received 10.12602229 Shares for each unit owned prior to the corporate action date.
The purpose of the Trust is to make it easier for an investor to invest in the Crypto Asset market as a whole without having to pick specific tokens, manage a portfolio, and constantly monitor ongoing news and developments. Although the Shares are not the exact equivalent of a direct investment in Crypto Assets, they provide investors with an alternative that constitutes a relatively cost-effective, professionally managed way to participate in Crypto Asset markets. The Trust holds a Portfolio of Crypto Assets, referred to as the Portfolio Crypto Assets.
In furtherance of this objective, the activities of the Trust include (i) issuing Shares in exchange for subscriptions, (ii) selling or buying Portfolio Crypto Assets in connection with monthly rebalancing, (iii) selling Portfolio Crypto Assets as necessary to cover the Management Fee (as defined below) and/or any Organizational Expenses (as defined below), (iv) causing the Sponsor to sell Portfolio Crypto Assets upon any potential future termination of the Trust, and (v) engaging in all administrative and security procedures necessary to accomplish such activities in accordance with the provisions of the Trust Agreement of Bitwise 10 Crypto Index Fund (the “Trust Agreement”), and the Custodian Agreement with the Custodian (the “Custodian Agreement”).
The Trust’s principal investment objective is to invest in a Portfolio of Crypto Assets that tracks the Bitwise 10 Large Cap Crypto Index (the “Index”) as closely as possible with certain exceptions determined by the Sponsor in its sole discretion. In addition, in the event the Portfolio Crypto Assets being held by the Trust present opportunities to generate returns in excess of the Index (for example, Airdrops, Emissions, forks, or similar network events) the Sponsor may also pursue these incidental opportunities on behalf of the Trust as part of the investment objective if in its sole discretion the Sponsor deems such activities to be possible and prudent. The Trust believes that it has met its principal investment objective. As of June 30, 2025, there was a correlation of 99.99% between the Portfolio Crypto Assets and the assets included in the Index. The Trust is aware that the market price of the Trust’s shares may deviate from the net asset value (“NAV”) of the shares, and the market price may at times be significantly above or below the shares’ NAV. The NAV of the Trust is calculated by summing the assets and liabilities and the NAV Per Share is calculated by dividing the total NAV by the shares outstanding. However, the Trust believes that any such deviation does not affect the Trust’s principal investment objective, as the Trust does not maintain or promote any business objectives related to the market trading price of its shares. Furthermore, under Regulation M, the Trust, as issuer of the Shares, is not permitted to take any actions that would seek to reconcile the NAV of the Shares and the market price of the Shares, and the Trust would not undertake business objectives that it was legally restricted from achieving.
The Trust and the Sponsor have entered into a limited, non-exclusive, revocable license agreement with Bitwise Index Services, LLC (the “Index Provider”), an affiliate of the Trust that is controlled by the same parent entity as the Sponsor, at no cost to the Trust or the Sponsor allowing the Trust to use the Index as the benchmark index for the Trust (the “License Agreement”).
The Shares may also trade at a substantial premium over, or a substantial discount to, the NAV Per Share as a result of price volatility, trading volume and closings of the exchanges on which the Sponsor purchases Portfolio Crypto Assets on behalf of the Trust due to fraud, failure, security breaches or otherwise. As a result of the foregoing, the price of the Shares as quoted on OTCQX has varied significantly from the value of the Trust’s Portfolio Crypto Assets Per Share since the Shares were approved for quotation on December 9, 2020.
The following charts show the percentage of Premium/(Discount) of the Shares as quoted on OTCQX and the Trust’s NAV and a comparison of the NAV of the Trust vs the market price as quoted on OTCQX for the period from December 9, 2020 to June 30, 2025.
15
From December 9, 2020 to June 30, 2025, the Shares of BITW traded at an average discount, based on closing prices at 4:00 pm ET, and estimated, unaudited, NAV Per Share of 16.43%. During that same period, the highest premium was 649.38% on December 16, 2020, and the lowest premium was 0.27% on August 4, 2021. During that same period, the highest discount was 67.80% on December 28, 2022, and the lowest discount was 0.09% on September 24, 2021. Given the lack of an ongoing redemption program and the holding period under Rule 144, there is no arbitrage mechanism to keep the Shares closely linked to the value of the Trust’s underlying holdings that may continue to have an adverse impact on investments in the Shares.
16
The following chart shows a comparison of the cumulative returns of the Index compared to the NAV of the Trust since inception to the period ended June 30, 2025.
Results of Operations
Financial Information for the Three Months and Six Months ended June 30, 2025 and 2024
The following table sets forth statements of operations data for the three and six months ended June 30, 2025 and 2024.
Statements of Operations (Unaudited)
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Management fee |
|
$ |
8,489,514 |
|
|
$ |
6,130,463 |
|
|
$ |
16,348,556 |
|
|
$ |
12,008,661 |
|
Transaction and other fees |
|
|
— |
|
|
|
24 |
|
|
|
— |
|
|
|
51 |
|
Total Expenses |
|
|
8,489,514 |
|
|
|
6,130,487 |
|
|
|
16,348,556 |
|
|
|
12,008,712 |
|
Net investment gain (loss) |
|
|
(8,489,514 |
) |
|
|
(6,130,487 |
) |
|
|
(16,348,556 |
) |
|
|
(12,008,712 |
) |
Net realized and change in unrealized gain (loss) on investments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized gain (loss) from Crypto Assets |
|
|
4,098,739 |
|
|
|
(495,930 |
) |
|
|
12,964,915 |
|
|
|
1,020,735 |
|
Net change in unrealized appreciation (depreciation) from Crypto Assets |
|
|
319,683,395 |
|
|
|
(167,450,727 |
) |
|
|
63,034,234 |
|
|
|
258,794,961 |
|
Net realized and change in unrealized gain (loss) on investments |
|
|
323,782,134 |
|
|
|
(167,946,657 |
) |
|
|
75,999,149 |
|
|
|
259,815,696 |
|
Net increase (decrease) in Net Assets resulting from operations |
|
$ |
315,292,620 |
|
|
$ |
(174,077,144 |
) |
|
$ |
59,650,593 |
|
|
$ |
247,806,984 |
|
17
Comparison of the six-month periods ended June 30, 2025 and 2024
The following provides a discussion of the material items that impacted the Trust’s financial condition during the applicable period:
Management fees
The Sponsor charges the Trust a Management Fee payable monthly, in arrears, in an amount equal to 2.5% per annum (1/12th of 2.5% per month) of the net asset value of the Trust’s assets at the end of each month. Management fees for the six months ended June 30, 2025 were $16,348,556 compared to management fees for the six months ended June 30, 2024 of $12,008,661. These changes were due to an increase in the Trust’s net asset value due to an increase in the fair value of the Portfolio Crypto Assets held by the Trust (see “Schedules of Investments” below).
Net realized gain (loss) from Crypto Assets
Net realized gain from Crypto Assets for the six months ended June 30, 2025 was $12,964,915 compared to net realized gain from Crypto Assets for the six months ended June 30, 2024 of $1,020,735. These changes were due to fluctuations in the value of the Portfolio Crypto Assets sold during the respective period.
For the six-month period ended June 30, 2025, the Trust recorded net realized gains from sales of Bitcoin and Ethereum of approximately $13,088,708 and $2,521,201, respectively, among the gains and losses realized in smaller amounts from the sale of other Portfolio Crypto Assets. These sales were made as a result of rebalancing activity and sales of Portfolio Crypto Assets to raise money to pay the management fee.
For the six-month period ended June 30, 2024, the Trust recorded net realized gains from sales of Bitcoin and Ethereum of $4,507,996 and $2,938,304, respectively, among the gains and losses realized in smaller amounts from the sale of other Portfolio Crypto Assets. These sales were made as a result of rebalancing activity and sales of Portfolio Crypto Assets to raise money to pay the management fee.
Net change in unrealized appreciation (depreciation) from Crypto Assets
Net change in unrealized depreciation from Crypto Assets for the six months ended June 30, 2025 was $63,034,234 compared to net change in unrealized appreciation from Crypto Assets for six months ended June 30, 2024 of $258,794,961. The primary factor for the change was related to an increase in the fair value of the Portfolio Crypto Assets held by the Trust (see “Schedules of Investments” below).
For the six-month period ended June 30, 2025 the Trust recorded net unrealized appreciation (depreciation) from Crypto Assets of Bitcoin and Ethereum of approximately $137,106,031 and $(56,482,592), respectively, among the unrealized appreciation and depreciation in smaller amounts of other Portfolio Crypto Assets.
For the six-month period ended June 30, 2024 the Trust recorded net unrealized appreciation from Crypto Assets of Bitcoin and Ethereum of $192,466,150 and $69,542,641, respectively, among the unrealized gains and losses in smaller amounts of other Portfolio Crypto Assets.
Net increase (decrease) in net assets resulting from operations
For the six-month period ended June 30, 2025, the Trust recorded a net increase in net assets resulting from operations of $59,650,593, compared to a net increase in net assets resulting from operations of $247,806,984 for the six-month period ended June 30, 2024. The primary factor that impacted 2025 net increase (decrease) in net assets resulting from operations compared to 2024 net increase (decrease) in net assets resulting from operations was an increase in net realized gain and change in unrealized appreciation on investments with a net gain of $75,999,149 for the six-month period in 2025 compared to a net gain of $259,815,696 for the six-month period in 2024. The primary factor for the change was a decrease in the fair value of the Portfolio Crypto Assets held by the Trust (see “Schedules of Investments” below).
Management Fee
The Sponsor charges the Trust a Management Fee payable monthly, in arrears, in an amount equal to 2.5% per annum (1/12th of 2.5% per month) of the net asset value of the Trust’s assets at the end of each month.
The Sponsor is responsible for paying for all ordinary administrative and overhead expenses of managing the Trust, including payment of rent, custody charges or flat rate fees for holding the Trust’s assets charged by the Custodian and customary fees and expenses of the Trustee, Administrator and Auditor (including costs incurred for appraisal or valuation expenses associated with the preparation of the Trust’s financial statements, tax returns and other similar reports and excluding indemnification and extraordinary costs). The Sponsor also pays for all expenses associated with the operation of the Trust, including for example, fees associated with
18
quotation of the Shares on the OTCQX, registration with the SEC, and fees associated with retaining and maintaining the Transfer Agent. “Trading commissions” or trading fees paid to trading venues (also known as exchanges) or intermediaries (such as trading technology or Crypto Asset brokerage firms) that assist in trade execution for accessing Crypto Asset liquidity are charged to the Trust and may either be included in the cost of the Crypto Assets acquired by or disposed of by the Trust or may appear as explicit costs in addition to the price of the Crypto Asset. Trading fees and commissions are charged to the Trust and may appear in the financial statements as “Transaction and other fees” in the Financial Statements’ Statements of Operations in the Expenses category or may be included in the cost of the Crypto Assets acquired by the Trust.
There is no ceiling to the Trust’s expenses that the Sponsor will pay. However, the Sponsor retains the right to cause the Trust to pay indemnification and extraordinary expenses, and these Trust expenses are not covered by the Management Fee. The Trust may incur certain extraordinary expenses including, but not limited to, any non-customary costs and expenses including extraordinary costs of the Administrator and Auditor, costs of any litigation or investigation involving Trust activities, and workout and restructuring and indemnification expenses.
Shareholder Subscriptions
As of November 18, 2021, the Sponsor to the Trust has closed the acceptance of all subscriptions to the Bitwise 10 Crypto Index Fund, pursuant to its rights under Sections 5 and 6 of the Trust Agreement. At this time, the Sponsor has no plans to reopen subscriptions to the Bitwise 10 Crypto Index Fund. There were no shareholder subscriptions during the quarter ended June 30, 2025.
Capital Resources and Liquidity
The Trust generally holds only a very small cash balance, and is otherwise fully invested in order to maintain its investment objective of tracking the Index. When selling Portfolio Crypto Assets to pay the Management Fee, the Sponsor endeavors to sell an exact amount of Portfolio Crypto Assets needed in order to pay such expenses in order to minimize the Trust’s holdings of assets other than Portfolio Crypto Assets. As a consequence, the Sponsor expects the Trust will typically have a very small cash balance at each reporting period. Cash may also be held in the Trust after a subscription from Shareholder is funded (or sent to the Trust’s bank account) but not yet invested in Portfolio Crypto Assets, or after a redemption from a redeeming Shareholder has been processed (e.g., by raising cash through the sale of Portfolio Crypto Assets) but not yet paid to the redeeming Shareholder.
As described under the heading “Management Fee” above, in exchange for the Management Fee, the Sponsor is responsible for payment of almost all of the expenses incurred by the Trust. As a result, the only material ordinary expense of the Trust during the periods covered by this Registration Statement was the Management Fee. The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs. While broader economic and market conditions, including evolving trade policies and tariffs, could impact the price of Portfolio Crypto Assets and contribute to increased market volatility, the Trust does not currently anticipate these factors will materially affect its liquidity needs. See Part I, Item 2 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Management Fee” for additional discussion of the Trust’s fees and expenses.
Value of Portfolio Crypto Assets
As described in the Risk Factors set out in our Annual Report on Form 10-K filed with the SEC on February 20, 2025, the prices of the various Portfolio Crypto Assets held by the Trust are subject to extreme volatility. This volatility had a significant impact on the value of the Portfolio Crypto Assets for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 and the year ended December 31, 2024.
As shown below in the “Schedules of Investments,” the increase in total investments in Crypto Assets from January 1, 2025 to June 30, 2025 was due primarily to a decrease in the value of the Portfolio Crypto Assets and to a lesser extent, the reinvestment of assets resulting from the December 31, 2024 Trust rebalance.
Shareholder Subscriptions and Redemptions
During the period from January 1, 2025 to June 30, 2025, there were no subscriptions or redemptions of Shares. There were 20,241,947 Shares outstanding as of June 30, 2025.
Schedules of Investments
The following provides details on the Portfolio Crypto Assets that comprise the Trust’s assets.
19
Six Months Ended June 30, 2025 and the Twelve Months Ended December 31, 2024
20
|
|
Bitcoin (BTC) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
10,632.1413 |
|
|
$ |
992,967,681 |
|
Purchases |
|
|
2.1471 |
|
|
|
178,000 |
|
Sales |
|
|
(199.4670 |
) |
|
|
(18,947,195 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
13,088,708 |
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
137,106,031 |
|
Balance at June 30, 2025 |
|
|
10,434.8214 |
|
|
$ |
1,124,393,225 |
|
|
|
|
|
|
|
|
||
|
|
Ethereum (ETH) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
65,011.3388 |
|
|
$ |
217,163,876 |
|
Purchases |
|
|
570.5776 |
|
|
|
1,468,689 |
|
Sales |
|
|
(2,554.6200 |
) |
|
|
(6,080,000 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
2,521,201 |
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(56,482,592 |
) |
Balance at June 30, 2025 |
|
|
63,027.2964 |
|
|
$ |
158,591,174 |
|
|
|
|
|
|
|
|
||
|
|
Ripple (XRP) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
30,686,126.7901 |
|
|
$ |
64,339,602 |
|
Purchases |
|
|
525,288.2338 |
|
|
|
1,128,000 |
|
Sales |
|
|
(618,852.8095 |
) |
|
|
(1,469,888 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
212,534 |
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
6,767,556 |
|
Balance at June 30, 2025 |
|
|
30,592,562.2144 |
|
|
$ |
70,977,804 |
|
|
|
|
|
|
|
|
||
|
|
Solana (SOL) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
256,477.2246 |
|
|
$ |
49,677,074 |
|
Purchases |
|
|
19,506.1634 |
|
|
|
2,946,543 |
|
Sales |
|
|
(1,301.5749 |
) |
|
|
(300,000 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(16,234 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(8,962,593 |
) |
Balance at June 30, 2025 |
|
|
274,681.8131 |
|
|
$ |
43,344,790 |
|
|
|
|
|
|
|
|
||
|
|
Cardano (ADA) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
19,192,702.8414 |
|
|
$ |
16,261,977 |
|
Purchases |
|
|
338,736.0073 |
|
|
|
217,502 |
|
Sales |
|
|
(550,207.7677 |
) |
|
|
(364,985 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(372,349 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(4,547,015 |
) |
Balance at June 30, 2025 |
|
|
18,981,231.0810 |
|
|
$ |
11,195,130 |
|
|
|
|
|
|
|
|
||
|
|
Sui (SUI) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
— |
|
|
$ |
— |
|
Purchases |
|
|
1,856,360.5924 |
|
|
|
7,511,318 |
|
Sales |
|
|
(71,047.9574 |
) |
|
|
(200,000 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(91,312 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(2,178,462 |
) |
Balance at June 30, 2025 |
|
|
1,785,312.6350 |
|
|
$ |
5,041,544 |
|
|
|
|
|
|
|
|
||
|
|
Chainlink (LINK) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
342,097.2780 |
|
|
$ |
6,828,604 |
|
21
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
(5,384.8936 |
) |
|
|
(84,980 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(15,658 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(2,141,607 |
) |
Balance at June 30, 2025 |
|
|
336,712.3844 |
|
|
$ |
4,586,359 |
|
|
|
|
|
|
|
|
||
|
|
Avalanche (AVAX) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
220,206.9730 |
|
|
$ |
7,885,612 |
|
Purchases |
|
|
1,098.0469 |
|
|
|
23,000 |
|
Sales |
|
|
(1,571.2909 |
) |
|
|
(53,946 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(9,550 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(3,843,765 |
) |
Balance at June 30, 2025 |
|
|
219,733.7290 |
|
|
$ |
4,001,351 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
Litecoin (LTC) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
— |
|
|
$ |
— |
|
Purchases |
|
|
40,872.6900 |
|
|
|
5,238,687 |
|
Sales |
|
|
(908.4944 |
) |
|
|
(76,000 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(40,443 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(1,640,963 |
) |
Balance at June 30, 2025 |
|
|
39,964.1956 |
|
|
$ |
3,481,281 |
|
|
|
|
|
|
|
|
||
|
|
Polkadot (DOT) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
816,152.3229 |
|
|
$ |
5,433,942 |
|
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
(20,109.8832 |
) |
|
|
(92,968 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(296,757 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(2,290,706 |
) |
Balance at June 30, 2025 |
|
|
796,042.4397 |
|
|
$ |
2,753,511 |
|
|
|
|
|
|
|
|
||
|
|
Bitcoin Cash (BCH) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
10,611.6785 |
|
|
$ |
4,625,525 |
|
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
(10,611.6785 |
) |
|
|
(4,461,967 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
8,794 |
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(172,352 |
) |
Balance at June 30, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
||
|
|
Uniswap (UNI) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
— |
|
|
$ |
— |
|
Purchases |
|
|
320,996.9789 |
|
|
|
4,351,306 |
|
Sales |
|
|
(320,996.9789 |
) |
|
|
(3,752,495 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(598,811 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
— |
|
Balance at June 30, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
NEAR Protocol (NEAR) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
680,674.8151 |
|
|
$ |
3,330,542 |
|
22
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
(680,674.8151 |
) |
|
|
(3,326,212 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(1,425,208 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
1,420,878 |
|
Balance at June 30, 2025 |
|
|
— |
|
|
$ |
— |
|
As of June 30, 2025, Bitcoin represented 78.72% of the total Portfolio Crypto Assets held by the Trust, and Ethereum represented 11.10%, while the remaining 10.18% of the Portfolio Crypto Assets were composed of Ripple, Solana, Cardano, Sui, Chainlink, Avalanche, Litecoin, and Polkadot.
23
|
|
Bitcoin (BTC) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
10,998.0429 |
|
|
$ |
462,076,062 |
|
Purchases |
|
|
4.5683 |
|
|
|
297,000 |
|
Sales |
|
|
(370.4699 |
) |
|
|
(23,558,706 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
11,961,117 |
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
542,192,208 |
|
Balance at December 31, 2024 |
|
|
10,632.1413 |
|
|
$ |
992,967,681 |
|
|
|
|
|
|
|
|
||
|
|
Ethereum (ETH) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
67,221.7443 |
|
|
$ |
154,923,265 |
|
Purchases |
|
|
789.9930 |
|
|
|
2,410,001 |
|
Sales |
|
|
(3,000.3985 |
) |
|
|
(10,091,952 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
5,136,625 |
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
64,785,937 |
|
Balance at December 31, 2024 |
|
|
65,011.3388 |
|
|
$ |
217,163,876 |
|
|
|
|
|
|
|
|
||
|
|
Ripple (XRP) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
30,324,826.6436 |
|
|
$ |
18,825,652 |
|
Purchases |
|
|
1,299,451.9601 |
|
|
|
1,086,743 |
|
Sales |
|
|
(938,151.8136 |
) |
|
|
(544,454 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(186,855 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
45,158,516 |
|
Balance at December 31, 2024 |
|
|
30,686,126.7901 |
|
|
$ |
64,339,602 |
|
|
|
|
|
|
|
|
||
|
|
Solana (SOL) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
239,876.3681 |
|
|
$ |
25,143,841 |
|
Purchases |
|
|
23,587.0202 |
|
|
|
3,366,952 |
|
Sales |
|
|
(6,986.1637 |
) |
|
|
(1,053,930 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
71,840 |
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
22,148,371 |
|
Balance at December 31, 2024 |
|
|
256,477.2246 |
|
|
$ |
49,677,074 |
|
|
|
|
|
|
|
|
||
|
|
Cardano (ADA) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
19,777,360.7670 |
|
|
$ |
11,943,548 |
|
Purchases |
|
|
188,507.7753 |
|
|
|
98,968 |
|
Sales |
|
|
(773,165.7009 |
) |
|
|
(474,890 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(561,230 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
5,255,581 |
|
Balance at December 31, 2024 |
|
|
19,192,702.8414 |
|
|
$ |
16,261,977 |
|
|
|
|
|
|
|
|
||
|
|
Avalanche (AVAX) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
195,564.0766 |
|
|
$ |
7,859,720 |
|
Purchases |
|
|
32,862.8089 |
|
|
|
1,186,405 |
|
Sales |
|
|
(8,219.9125 |
) |
|
|
(307,043 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(31,652 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(821,818 |
) |
Balance at December 31, 2024 |
|
|
220,206.9730 |
|
|
$ |
7,885,612 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
24
|
|
Chainlink (LINK) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
309,529.3045 |
|
|
$ |
4,803,895 |
|
Purchases |
|
|
49,774.0999 |
|
|
|
815,809 |
|
Sales |
|
|
(17,206.1264 |
) |
|
|
(231,737 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(90,437 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
1,531,074 |
|
Balance at December 31, 2024 |
|
|
342,097.2780 |
|
|
$ |
6,828,604 |
|
|
|
|
|
|
|
|
||
|
|
Polkadot (DOT) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
732,019.7088 |
|
|
$ |
6,033,306 |
|
Purchases |
|
|
92,155.7549 |
|
|
|
705,143 |
|
Sales |
|
|
(8,023.1408 |
) |
|
|
(51,946 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(104,104 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(1,148,457 |
) |
Balance at December 31, 2024 |
|
|
816,152.3229 |
|
|
$ |
5,433,942 |
|
|
|
|
|
|
|
|
||
|
|
Bitcoin Cash (BCH) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
— |
|
|
$ |
— |
|
Purchases |
|
|
13,405.6895 |
|
|
|
5,655,501 |
|
Sales |
|
|
(2,794.0110 |
) |
|
|
(1,107,720 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(94,608 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
172,352 |
|
Balance at December 31, 2024 |
|
|
10,611.6785 |
|
|
$ |
4,625,525 |
|
|
|
|
|
|
|
|
||
|
|
NEAR Protocol (NEAR) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
— |
|
|
$ |
— |
|
Purchases |
|
|
1,288,276.7565 |
|
|
|
9,201,420 |
|
Sales |
|
|
(607,601.9414 |
) |
|
|
(2,964,735 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(1,485,265 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(1,420,878 |
) |
Balance at December 31, 2024 |
|
|
680,674.8151 |
|
|
$ |
3,330,542 |
|
|
|
|
|
|
|
|
||
|
|
Polygon (MATIC) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
5,257,194.4118 |
|
|
$ |
5,114,199 |
|
Purchases |
|
|
236,114.1348 |
|
|
|
229,000 |
|
Sales |
|
|
(5,493,308.5466 |
) |
|
|
(3,797,244 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(4,686,742 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
3,140,787 |
|
Balance at December 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
||
|
|
Litecoin (LTC) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
41,303.5713 |
|
|
$ |
3,075,464 |
|
Purchases |
|
|
193.7882 |
|
|
|
13,000 |
|
Sales |
|
|
(41,497.3595 |
) |
|
|
(3,876,820 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
1,588,611 |
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
(800,255 |
) |
Balance at December 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
25
|
|
Uniswap (UNI) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2024 |
|
|
— |
|
|
$ |
— |
|
Purchases |
|
|
828,677.0698 |
|
|
|
9,173,913 |
|
Sales |
|
|
(828,677.0698 |
) |
|
|
(7,903,792 |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
(1,270,121 |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
— |
|
Balance at December 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
||
As of December 31, 2024, Bitcoin represented 72.56% of the total Portfolio Crypto Assets held by the Trust, and Ethereum represented 15.87%, while the remaining 11.57% of the Portfolio Crypto Assets were composed of Ripple, Solana, Cardano, Avalanche, Chainlink, Polkadot, Bitcoin Cash, and NEAR Protocol.
Off-Balance Sheet Arrangements
The Trust is not a party to any off-balance sheet arrangements.
Significant Accounting Policies
Basis of Presentation
The financial statements are expressed in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Trust is an investment company and follows the specialized accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC” or “Codification”) Topic 946, Financial Services—Investment Companies.
Transactions of Crypto Assets have been accounted for analogizing to existing accounting standards that management believes are appropriate to the circumstances.
Pursuant to the Statement of Cash Flows Topic of the Codification, the Trust qualifies for an exemption from the requirement to provide a statement of cash flows and has elected not to provide a statement of cash flows.
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Cash
Cash represents cash deposits held at financial institutions and Crypto Asset exchanges. Cash in a bank deposit account, at times, may exceed U.S. federally insured limits. The Trust has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on such bank deposits.
Investments and Valuation
Calculation of Valuation
Effective August 31, 2021, the process that the Sponsor developed for identifying a principal market (the “Principal Market”), as described in FASB ASC 820-10, which outlines the application of fair value accounting, was to begin by identifying publicly available, well established and reputable Crypto Asset exchanges selected by the Sponsor and its affiliates at their sole discretion, and then calculating, on each valuation period, the highest volume exchange during the 60 minutes prior to 4:00 pm ET for each asset (the “Principal Market Price”). In evaluating the markets that could be considered principal markets, the Trust considered whether or not the specific markets were accessible to the Trust, either directly or through an intermediary, at the end of each period.
26
Effective February 13, 2023, the Sponsor adapted a nearly identical principal market valuation process, with no material impact to the Trust, using a third-party valuation vendor, Lukka, Inc., to identify publicly available, well established and reputable Crypto Asset exchanges selected by Lukka, Inc. in their sole discretion, including Binance, Bitfinex, Bitflyer, Bitstamp, Bullish, Coinbase, Crypto.com, Gate.io, Gemini, HitBTC, Huobi, itBit, Kraken, KuCoin, LMAX, MEXC Global, OKX and Poloniex, and then calculating, on each valuation period, the highest volume exchange during the 60 minutes prior to 4:00 pm ET for each asset. In evaluating the markets that could be considered principal markets, the Trust considered whether or not the specific markets were accessible to the Trust, either directly or through an intermediary, at the end of each period.
The following provides an overview of the Principal Market and the Principal Market Prices for Portfolio Crypto Assets that comprised the majority of the Trust’s assets for the six month period ended June 30, 2025.
Crypto Asset |
|
Principal Market Price |
|
|
Principal |
|
Bitcoin (BTC) |
|
$ |
107,753.95 |
|
|
Crypto.com |
Ethereum (ETH) |
|
$ |
2,516.23 |
|
|
Crypto.com |
Ripple (XRP) |
|
$ |
2.32 |
|
|
Coinbase |
Solana (SOL) |
|
$ |
157.80 |
|
|
Coinbase |
Cardano (ADA) |
|
$ |
0.59 |
|
|
Coinbase |
Sui (SUI) |
|
$ |
2.82 |
|
|
Coinbase |
Chainlink (LINK) |
|
$ |
13.62 |
|
|
Coinbase |
Avalanche (AVAX) |
|
$ |
18.21 |
|
|
Coinbase |
Litecoin (LTC) |
|
$ |
87.11 |
|
|
Coinbase |
Polkadot (DOT) |
|
$ |
3.46 |
|
|
Coinbase |
Valuation during the periods presented
During the periods presented, the trust carried its investments at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. Fair value investments are not adjusted for transaction costs. The Trust utilized this method for purposes of calculating the Trust’s NAV.
In determining fair value, the Trust uses a single, principal market valuation approach. A fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs are to be used when available. The fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access.
Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. These inputs may include (a) quoted prices for similar assets in active markets, (b) quoted prices for identical or similar assets in markets that are not active, (c) inputs other than quoted prices that are observable for the asset, or (d) inputs derived principally from or corroborated by observable market data by correlation or other means.
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a wide variety of factors, including the type of investment, whether the investment is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the transaction.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement.
The following summarizes the Trust’s assets accounted for at fair value at June 30, 2025.
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments in Crypto Assets, at fair value |
|
$ |
1,428,366,169 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,428,366,169 |
|
27
The following summarizes the Trust’s assets accounted for at fair value at December 31, 2024.
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments in Crypto Assets, at fair value |
|
$ |
1,368,514,435 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,368,514,435 |
|
During the periods ended June 30, 2025 and December 31, 2024, there were no significant transfers into or out of any levels of the fair value hierarchy.
During the period, all of the Trust’s assets were considered “Level 1” valuations, because the valuations were based on quoted prices in markets that are active or for which all significant inputs are observable, either directly or indirectly. These inputs may include (a) quoted prices for similar assets in active markets, (b) quoted prices for identical or similar assets in markets that are not active, (c) inputs other than quoted prices that are observable for the asset, or (d) inputs derived principally from or corroborated by observable market data by correlation or other means.
The Trust generally records receipt of a new Crypto Asset created due to a Hard Fork at the time the Hard Fork is effective. The Trust’s methodology for determining effectiveness of the fork is when two or more recognized exchanges quote prices for the forked coin. Some exchanges and custodians do not honor Hard Forks or may honor Hard Forks in the future. In such cases, the Trust will record receipt of the new Crypto Asset at the time two or more recognized exchanges begin quoting prices for the asset. Although the Trust records the asset into its books and records at the time the fork is effective, as described above, the Trust’s custodian may take an extended period of time to make the forked asset available for transfer, and it may never make the forked asset available for transfer, which could lead to either the Trust holding the asset longer than it would otherwise hold the asset (if it was freely transferable), or a complete write-down in the value of the forked asset. The Trust does not allocate any of the original Crypto Asset’s cost to the new Crypto Asset and recognizes unrealized gains equal to the fair value of the new Crypto Asset received. During the period ended June 30, 2025, there were no Hard Forks recognized or not recognized.
There were no Hard Forks during the period that were not initially recognized but were subsequently recognized.
Crypto Asset transactions are recorded on the trade date. Realized gains and losses from Crypto Asset transactions are determined using the identified cost method. Any change in net unrealized gain or loss is reported in the statements of operations. Commissions and other trading fees are reflected as an adjustment to cost or proceeds at the time of the transaction.
The Trust intermittently receives Airdrops of new Crypto Assets. The use of Airdrops is generally to promote the launch and use of new Crypto Assets by providing a small amount of the new Crypto Assets to the private wallets or exchange accounts of holders of existing related Crypto Assets. Airdropped Crypto Assets can have substantially different Blockchain technology that has no relation to any existing Crypto Asset, and many Airdrops may be without value. The Trust will only record receipt of airdropped Crypto Assets if, when received, the airdropped Crypto Assets have value. Crypto Assets received from Airdrops have no cost basis and the Trust recognizes other income equal to the fair value of the new Crypto Asset received. There were no Airdrops recognized or unrecognized during the six month period ended June 30, 2025.
Income Taxes
The Trust is classified as a partnership for U.S. federal income tax purposes. The Trust does not record a provision for U.S. federal, U.S. state or local income taxes because the Shareholders report their share of the Trust’s income or loss on their income tax returns. The Trust files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states and foreign jurisdictions.
The Trust is required to determine whether its tax positions are more likely than not to be sustained on examination by the applicable taxing authority, based on the technical merits of the position. Tax positions not deemed to meet a more likely than not threshold would be recorded as a tax expense in the current year. As of June 30, 2025 and December 31, 2024, the Trust has determined that no provision for income taxes is required and no liability for unrecognized tax benefits has been recorded. The Trust does not expect that its assessment related to unrecognized tax benefits will materially change over the next 12 months. However, the Trust’s conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, the nexus of income among various tax jurisdictions; compliance with U.S. federal, U.S. state, and tax laws of jurisdictions in which the Trust operates; and changes in the administrative practices and precedents of the relevant authorities. The Trust is required to analyze all open tax years. Open tax years are those years that are open for examination by the relevant income taxing authority. As of June 30, 2025, the 2024, 2023, 2022, and 2021 tax years remain open for examination. There were no examinations in progress at period end.
Financial Instruments with Off-Balance-Sheet Risk
28
Crypto Assets
Crypto Assets are loosely regulated and there is no central marketplace for currency exchange. Supply is determined by a computer code, not by a central bank, and prices have been extremely volatile. Crypto Asset exchanges have been closed due to fraud, failure or security breaches. Any of the Trust’s assets that reside on an exchange that shuts down may be lost. At June 30, 2025, Crypto Assets of approximately $4,151,407 and no cash resided on exchanges. At December 31, 2024 approximately $7,226,139 and no cash resided on exchanges.
Several factors may affect the price of Crypto Assets, including, but not limited to: supply and demand, investors’ expectations with respect to the rate of inflation, interest rates, currency exchange rates or future regulatory measures (if any) that restrict the trading of Crypto Assets or the use of Crypto Assets as a form of payment. There is no assurance that Crypto Assets will maintain their long-term value in terms of purchasing power in the future, or that acceptance of Crypto Asset payments by mainstream retail merchants and commercial businesses will continue to grow.
Crypto Asset Regulation
As Crypto Assets have grown in popularity and market size, various countries and jurisdictions have begun to develop regulations governing the Crypto Assets industry. To the extent that future regulatory actions or policies limit the ability to exchange Crypto Assets or utilize them for payments, the demand for Crypto Assets will be reduced. Furthermore, regulatory actions may limit the ability of end-users to convert Crypto Assets into fiat currency (e.g., U.S. dollars) or use Crypto Assets to pay for goods and services. Such regulatory actions or policies would result in a reduction of demand, and in turn, a decline in the underlying Crypto Asset unit prices.
The effect of any future regulatory change on the Trust or Crypto Assets in general is impossible to predict, but such change could be substantial and adverse to the Trust and the value of the Trust’s investments in Crypto Assets.
Custody of Crypto Assets
The Custodian serves as the Trust’s Custodian for Crypto Assets for which qualified custody is available. The Custodian is subject to change in the sole discretion of the Sponsor. At June 30, 2025 and December 31, 2024, Crypto Assets of approximately $1,424,214,762 and $1,361,288,296 were held by the Custodian, respectively.
Crypto Asset Trading is Volatile and Speculative
Crypto Assets represent a speculative investment and involve a high degree of risk. Prices of Crypto Assets have fluctuated widely for a variety of reasons including uncertainties in government regulation and may continue to experience significant price fluctuations. If Crypto Asset markets continue to be subject to sharp fluctuations, Shareholders may experience losses as the value of the Trust’s investments decline. Even if Shareholders are able to hold their Shares in the Trust for the long-term, their Shares may never generate a profit, since Crypto Asset markets have historically experienced extended periods of flat or declining prices, in addition to sharp fluctuations.
Over-the-Counter Transactions
Some of the markets in which the Trust may execute its transactions are “over-the-counter” or “interdealer” markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight as are members of “exchange-based” markets. This exposes the Trust to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem, thus causing the Trust to suffer a loss. Such “counterparty risk” is accentuated for Crypto Assets where the Trust has concentrated its transactions with a single or small group of counterparties. The Trust is not restricted from dealing with any particular counterparty or from concentrating any or all of its transactions with one counterparty. Moreover, the Trust has no internal credit function that evaluates the creditworthiness of its counterparties. The ability of the Trust to transact business with any one or number of counterparties, the lack of any meaningful and independent evaluation of such counterparty’s financial capabilities and the absence of a regulated market to facilitate settlement may increase the potential for losses by the Trust.
No FDIC or SIPC Protection
The Trust is not a banking institution or otherwise a member of the FDIC or the SIPC. Accordingly, deposits or assets held by the Trust are not subject to the protections enjoyed by depositors with FDIC or SIPC member institutions. The Trust’s Crypto Asset Custodian does however carry bespoke insurance policies related to the Crypto Assets over which it provides custody.
29
The Trust must adapt to technological change in order to secure and safeguard client accounts. While management believes they have developed an appropriate proprietary security system reasonably designed to safeguard the Trust’s Crypto Assets from theft, loss, destruction or other issues relating to hackers and technological attack, such assessment is based upon known technology and threats. To the extent that the Trust is unable to identify and mitigate or stop new security threats, the Trust’s Crypto Assets may be subject to theft, loss, destruction or other attack, which could have a negative impact on the performance of the Trust or result in loss of the Trust’s Crypto Assets.
Risks Associated with a Crypto Assets Majority Control
Since Crypto Assets are virtual and transactions in such currencies reside on distributed networks, governance of the underlying distributed network could be adversely altered should any individual or group obtain 51% control of the distributed network. Such control could have a significant adverse effect on either the ownership or value of the Crypto Asset.
Transaction Authentication
As of the date of these financial statements, the transfer of Crypto Assets from one party to another typically relies on an authentication process by an outside party known as a Miner or Validator. In exchange for compensation, the Miner or Validator will authenticate the transfer of the currency through the solving of a complex algorithm known as a proof of work, or will vouch for the transfer through other means, such as a proof of stake. Effective transfers of and therefore realization of Crypto Assets and tokens are dependent on interactions from these Miners or Validators. In the event that there were a shortage of Miners or Validators to perform this function, that shortage could have an adverse effect on either the fair value or realization of the Crypto Assets.
Other Risks
Management continues to evaluate the impact of current or anticipated military conflict, including between Russia and Ukraine, terrorism, sanctions and other geopolitical events as well as adverse developments in the economy, the capital markets and the Blockchain markets, including rising energy costs, inflation and interest rates, in the United States and globally, and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics, and has concluded that while it is reasonably possible that these events could have a negative effect on the financial performance and operations of the Trust, the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
30
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Trust Agreement does not authorize the Trustee to borrow for the payment of the Trust’s ordinary expenses. The Trust does not engage in transactions in foreign currencies which could expose the Trust or holders of Shares to any foreign currency related market risk. The Trust does not invest in derivative financial instruments and has no foreign operations or long-term debt instruments.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Principal Executive Officer and Principal Financial and Accounting Officer of the Sponsor performing functions equivalent to those a principal executive officer and principal financial and accounting officer of the Trust would perform if the Trust had any officers, and to the Board of Directors of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of the Principal Executive Officer and the Principal Financial and Accounting Officer of the Sponsor, the Sponsor conducted an evaluation of the Trust's disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based on this evaluation, the Principal Executive Officer and the Principal Financial and Accounting Officer of the Sponsor concluded that the Trust’s disclosure controls and procedures were effective as of the end of the period covered by this report.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.
Changes in Internal Control Over Financial Reporting
There were no changes in the Trust’s internal controls over financial reporting that occurred during the Trust’s most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, these internal controls.
31
PART II – OTHER INFORMATION:
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
There have been no material changes to the Risk Factors last reported under Item 1A of the registrant’s Annual Report on Form 10-K for the year ended December 31, 2024, other than the updates to the risk factors set forth below.
Risks Related to Regulatory and Compliance
As the Crypto Asset ecosystem has expanded, it has attracted increasing regulatory attention from U.S. regulators, and evolving regulatory frameworks may impact the Portfolio Crypto Assets’ classification and treatment. These developments could significantly influence the Trust’s compliance requirements, valuation strategies, result in Extraordinary Expenses, and substantially impact the value of the Shares.
The regulatory landscape for Crypto Assets in the United States is complex and evolving, with multiple federal and state agencies actively overseeing various aspects of their use, trading, and compliance obligations. These agencies include, but are not limited to, the SEC, the U.S. Commodity Futures Trading Commission (“CFTC”), the Financial Crimes Enforcement Network (“FinCEN”), the Office of Foreign Assets Control (“OFAC”), the Office of the Comptroller of the Currency, the Federal Reserve Board, the U.S. Department of the Treasury, the Consumer Financial Protection Bureau, the Federal Trade Commission, the Internal Revenue Service, the U.S. Department of Justice (“DOJ”) and various state financial regulators and state Attorneys General.
The jurisdiction of federal and state regulators over Crypto Assets depends on their classification. Crypto Assets may be deemed “securities,” “commodities,” “virtual currencies,” or another asset type. Each classification can trigger different regulatory frameworks and oversight responsibilities. For example, a Crypto Asset like Ether could be classified by the SEC as a “security” under U.S. federal securities laws, depending on its use and the circumstances surrounding specific transactions. Ether may also be classified by the CFTC as a “commodity interest” under the Commodity Exchange Act, or by state regulators as a form of virtual currency subject to state money transmission laws. Although U.S. courts have ruled in some circumstances that Bitcoin is a commodity and acknowledged the CFTC’s position that Ether should be considered a commodity, no comprehensive federal court ruling conclusively establishes that Bitcoin, Ether, or any other Crypto Asset, is a security, commodity, or other form of asset under all circumstances.
In recent years, the SEC has increased enforcement actions and investigations in the crypto sector, targeting entities it deems in violation of securities laws. This includes actions against platforms such as Kraken for offering unregistered securities and Staking services, as well as ongoing investigations into Coinbase, Ripple, Binance and ConsenSys for activities involving various Crypto Assets and services. The SEC also proposed or adopted several rules last year that could significantly impact the Crypto Asset industry. These included amendments to the Exchange Act’s definition of “dealer,” which could negatively affect numerous digital asset trading platforms, and certain DeFi platforms in particular, and proposed amendments to the SEC Custody Rule under the Advisers Act, which would make it more difficult for asset managers to custody Crypto Assets. The SEC also raised concerns about compliance and market oversight of Crypto Assets, and emphasized retail investor protection and market integrity as key priorities, with its Division of Examinations identifying Crypto Assets as a focus for 2025. These regulatory actions and heightened scrutiny extend to emerging areas such as DeFi protocols and NFTs creating additional legal challenges and market uncertainty.
However, recent SEC developments indicate possible shifts in its regulatory approach, although the SEC’s long-term direction remains uncertain. The SEC approved multiple spot Bitcoin ETFs for the first time in January 2024 followed by the approval of multiple spot Ethereum ETFs in July 2024, including the Bitwise trusts holding Bitcoin and Ether. These approvals suggest that both Bitcoin and Ethereum may be commodities. More recently the SEC and its staff: (i) withdrew Staff Accounting Bulletin 121, eliminating the requirement for companies to recognize a liability and corresponding asset for safeguarding digital assets; (ii) formed a new Crypto Task Force led by Commissioner Hester Peirce aimed at providing greater regulatory clarity to the digital asset industry; (iii) held a series of public roundtables between April and June 2025 through the Crypto Task Force, specifically addressing crypto trading, custody, tokenization, and decentralized finance, reflecting intensified efforts to engage stakeholders and clarify regulatory expectations across these critical market segments; (iv) indicated a strategic shift away from regulation-by-enforcement toward explicit rulemaking tailored specifically for digital assets; (v) released additional targeted written guidance addressing various digital asset topics, including a staff statement clarifying that certain stablecoins may not constitute securities, guidance related to meme coins, a statement on proof-of-work mining activities, interpretations on protocol staking arrangements, and FAQs related to broker-dealer custody of digital assets; and (vi) released guidance on crypto-related disclosures for securities and exchange-traded product registrations. That said, any permanent regulatory shift remains uncertain at this time, and there is no assurance a more favorable U.S.
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regulatory environment will emerge at the federal or state levels. Any adverse regulatory developments or enforcement actions could negatively impact the value of these assets and related products, including the Trust.
The SEC has also regularly stated that certain Crypto Assets may be considered “securities” under federal securities laws, and this classification can have significant implications for Crypto Assets, including certain Portfolio Crypto Assets. The legal test for determining whether any given Crypto Asset, product, or service is an investment contract security was set forth in the 1946 Supreme Court case SEC v. W.J. Howey Co., and whether any given Crypto Asset, product, or service is a note, is discussed in the 1990 Supreme Court case Reves v. Ernst & Young. Determining whether any given Crypto Asset, product, or service is a security requires a highly complex, fact-driven analysis. Accordingly, whether any given Crypto Asset, product or service would be ultimately deemed by a federal court to be a security is uncertain and difficult to predict notwithstanding the conclusions of the SEC or any conclusions we may draw regarding the likelihood that a particular Crypto Asset, product or service could be deemed a “security” or “securities offering” under applicable laws. Certain statements by SEC officials have suggested that Bitcoin does not meet the criteria of an investment contract under the federal securities laws. Former SEC Director William Hinman also stated in 2018 that Ether, in its decentralized form at the time, did not meet these criteria; but former SEC Chairman Gary Gensler suggested that Ether might be a security as recently as last year. None of these statements are comprehensive or binding, and the SEC continues to scrutinize aspects of the Crypto Asset space, including Bitcoin, Ether.
If any Portfolio Crypto Asset was definitively classified as a “security” under federal or state securities laws by the SEC or any other U.S. authority, or in a proceeding in a court of law or otherwise, it may have material adverse consequences for the Portfolio Crypto Assets and the broader Crypto Asset market. For example, it may become more difficult for the Portfolio Crypto Assets to be traded, cleared and custodied as compared to other Crypto Assets that are not considered to be securities, which could in turn negatively affect the liquidity and general acceptance of the Portfolio Crypto Assets and cause users to migrate to other Crypto Assets.
On December 22, 2020, the SEC instituted proceedings to enjoin Ripple Labs Inc., the creator of XRP, on the basis that the offer and sale of XRP was an unregistered, ongoing offering of securities in violation of Sections 5(a) and 5(c) of the Securities Act. On December 23, 2020, the Trust made a decision to liquidate its position in XRP based on consideration of new public information from the SEC’s complaint. The Trust immediately reinvested the proceeds from the liquidated position in other Portfolio Crypto Assets, primarily Bitcoin and Ethereum, but subsequently re-invested in XRP. The SEC case against Ripple Labs Inc. remains ongoing. In July 2023, the U.S. District Court for the Southern District of New York found that institutional sales of XRP violated federal securities laws, while programmatic sales on public exchanges did not constitute securities transactions. In August 2024, the court ordered Ripple to pay a $125 million civil penalty. The SEC has since appealed the court's ruling on programmatic sales, seeking clarity on XRP's regulatory status in secondary market transactions, with the appeal currently pending before the Second Circuit Court of Appeals. In a June 2023 action against Coinbase, Inc., the SEC alleged, among other things, that the Portfolio Crypto Assets Solana (SOL) and Cardano (ADA), constituted unregistered securities. Coinbase has vigorously contested the claims against it, and the case remains ongoing.
Further, if any other Crypto Asset with widespread markets is determined to be a “security,” it could also have material adverse consequences for the Portfolio Crypto Assets as Crypto Assets due to negative publicity or a decline in the general acceptance of Crypto Assets. In addition, trading platforms that feature Crypto Assets that are determined to be securities may face penalties or be required to shut down if they do not have the licenses required to facilitate electronic securities markets, which could result in a reduction of the liquidity of the Portfolio Crypto Asset markets. For example, the SEC’s increased enforcement activity over the last few years have highlighted the potential for stricter regulation across the broader Crypto Asset industry, which could exacerbate negative market reactions. As such, any determination that a Portfolio Crypto Asset, or any other Crypto Asset with widespread market presence, is a security under federal or state securities laws may adversely affect the value of the Portfolio Crypto Assets and, as a result, the value of the Shares.
To the extent that any Portfolio Crypto Asset is deemed to fall within the definition of a security under U.S. federal securities laws, the Trust and the Sponsor may be subject to additional requirements under the Investment Company Act and the Advisers Act, and may also be required to register as an investment adviser under the Advisers Act. Such additional registration may result in Extraordinary Expenses to the Trust, thereby materially and adversely impacting the Shares. Compliance could also necessitate fundamental changes to the Trust’s structure or operations, potentially making its current investment strategy unfeasible. If the Sponsor and/or the Trust determines to comply with such additional regulatory and registration requirements, the Sponsor may decide to terminate the Trust. Any such termination could result in the liquidation of the Trust’s holdings in the Portfolio Crypto Assets, which could occur at a time that is disadvantageous to Shareholders, leading to potential financial losses.
In addition, the CFTC has asserted regulatory jurisdiction over both Bitcoin and Ether futures markets, having classified these Crypto Assets as “commodities” under the Commodity Exchange Act (“CEA”). This designation would grant the CFTC authority to prosecute fraud and manipulation in the cash, or spot, markets for Bitcoin and Ether; however, its oversight of these spot markets is generally limited unless transactions involve leverage, collateral, or financing. The National Futures Association ("NFA") serves as the self-regulatory organization for the U.S. futures industry, including Bitcoin and Ether futures, but does not oversee their respective
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spot markets. Recent enforcement actions by the CFTC underscore its heightened scrutiny of Crypto Asset markets. In 2023, the CFTC launched multiple actions against crypto firms—targeting high-profile entities and executives such as FTX, Binance, and Coinbase—for violations including illegal off-exchange commodity trading and inadequate anti-money laundering controls.
To the extent that any Portfolio Crypto Asset is deemed to fall within the definition of a “commodity interest” under the CEA, the Trust and the Sponsor may be subject to additional regulation under the CEA and CFTC regulations. These requirements may result in Extraordinary Expenses to the Trust, which could materially and adversely impact the Shares. If the Sponsor and/or the Trust determines not to comply with such regulatory requirements, the Sponsor may terminate the Trust, the Trust may face termination, resulting in the forced liquidation of its Portfolio Crypto Asset holdings, which could occur at a time that is disadvantageous to Shareholders, leading to potential financial losses. Moreover, the growing scope of the CFTC’s regulatory authority over Crypto Assets, combined with potential regulatory overlap with the SEC, may create additional uncertainty and compliance costs. These developments could reduce the liquidity of Portfolio Crypto Asset markets and create negative publicity, leading to decreased demand and ultimately a decline in the value of the Shares.
Regulatory changes or actions by federal or state executives or legislators may affect the value of the Shares or restrict the use of one or more Crypto Assets, Validating or Mining activity or the operation of their networks or the Crypto Asset markets in a manner that adversely affects the value of the Shares.
Uncertainty about the jurisdiction over Crypto Assets by federal and state authorities has resulted in calls for comprehensive Crypto Asset legislation, and the expansion of the Crypto Asset market, along with significant industry developments in recent years, has led to increased scrutiny by consecutive U.S. Presidents and the U.S. Congress.
On January 23, 2025, President Trump issued Executive Order 14178, titled “Strengthening American Leadership in Digital Financial Technology,” which revoked President Biden’s March 2022 Executive Order 14067, “Ensuring Responsible Development of Digital Assets.” Among other things, Trump’s order establishes the President’s Working Group on Digital Asset Markets, tasked with proposing a federal regulatory framework for digital assets within 180 days. This working group is directed to focus on fostering innovation, reducing regulatory burdens, and ensuring U.S. competitiveness in global digital financial markets.
Trump’s executive order follows ongoing legislative efforts to establish a comprehensive regulatory framework for digital assets. On May 22, 2024, the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (“Fit21”), advancing efforts to establish a federal framework for digital assets. Fit21 seeks to clarify the SEC’s and CFTC’s jurisdiction, granting the CFTC primary oversight of digital commodities while preserving the SEC’s authority over securities. Alongside Fit21, other proposals aim to refine digital asset classifications, disclosure requirements, and tax treatment. In June and July 2025, significant new legislation emerged, including the passage of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (“GENIUS Act”), signed into law by President Trump on July 18, 2025, which requires stablecoins to be fully backed by U.S. dollars or approved low-risk assets, subjecting them to federal and state regulation. Additionally, the House passed the Digital Asset Market Structure and Investor Protection Act (“CLARITY Act”) on June 23, 2025, further clarifying regulatory responsibilities between the SEC and CFTC and introducing a provisional registration system for digital asset exchanges, though this bill remains pending in the Senate. The House also advanced the Anti-CBDC Surveillance State Act, aimed at prohibiting the Federal Reserve from issuing a central bank digital currency, currently awaiting Senate action. However, the future of pending regulatory efforts, and how regulatory authority may be divided among regulators, remains uncertain.
Traditional financial services competitors also have long-established relationships with policymakers and have cultivated lobbying efforts to advance their interests. While members of the cryptocurrency industry have begun engaging with policymakers and external advisors to advocate for balanced regulation, the relative infancy of these efforts compared to other industries leaves the cryptocurrency industry vulnerable to unfavorable regulatory outcomes. New laws, regulations, or interpretations of existing regulations may emerge in the United States and internationally that are detrimental to Crypto Asset platforms, potentially disrupting our business operations, financial performance, or growth opportunities. Furthermore, political and advocacy activities from the Trust and the Sponsor aimed at influencing the regulatory environment may attract negative perceptions from investors and the public. Such perceptions could harm the Trust’s reputation and its overall market position, compounding the challenges posed by an increasingly complex and uncertain regulatory landscape.
It is difficult to predict whether, or when, any of these developments will lead to Congress granting additional authorities to the SEC or other regulators, what the nature of such additional authorities might be, how additional legislation and/or regulatory oversight might impact the ability of Crypto Asset markets to function or how any new regulations or changes to existing regulations might impact the value of Crypto Assets generally and those held by the Trust specifically. As discussed above, any change in classification of a Portfolio Crypto Asset may require substantial compliance steps resulting in Extraordinary Expenses to the Trust. If these developments significantly alter the regulatory landscape, the Sponsor may choose to terminate the Trust, potentially leading to liquidation at a time that could be disadvantageous for Shareholders and adversely impact the value of the Shares.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
No executive officers or directors of the Sponsor have
Item 6. Exhibits
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Exhibit Number
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Exhibit Description
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3.1 |
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3.2 |
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31.1 |
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31.2 |
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32.1* |
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32.2* |
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101.INS |
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
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104 |
Cover Page Interactive Data File (Formatted as Inline XBRL and contained in exhibit 101) |
* These exhibits are furnished with this Quarterly Report on Form 10-Q and are not deemed filed with the SEC and are not incorporated by reference in any filing of Bitwise 10 Crypto Index Fund under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filings.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned in the capacities indicated thereunto duly authorized.
Bitwise Investment Advisers, LLC as Sponsor of Bitwise 10 Crypto Index Fund (BITW) |
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By: |
/s/ Hunter Horsley |
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Name: |
Hunter Horsley |
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Title: |
President (Principal Executive Officer)* |
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By: |
/s/ Paul Fusaro |
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Name: |
Paul Fusaro |
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Title: |
Title: Chief Operating Officer (Principal Financial Officer and Principal Accounting Officer)* |
Date: August 7, 2025
* The Registrant is a trust and the persons are signing in their capacities as officers or directors of Bitwise Investment Advisers, LLC, the Sponsor of the Registrant.
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Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a)
AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Hunter Horsley, certify that:
[Signature page follows]
Date: August 7, 2025 |
/s/ Hunter Horsley |
Hunter Horsley * |
President (Principal Executive Officer) |
* The Registrant is a trust and Hunter Horsley is signing in his capacity as Principal Executive Officer of Bitwise Investment Advisers, LLC, the Sponsor of the Trust.
[Signature Page to SOX 302 Certification]
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER PURSUANT TO RULE 13a-14(a)
AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Paul Fusaro, certify that:
[Signature page follows]
Date: August 7, 2025 |
/s/ Paul Fusaro |
Paul Fusaro * |
Chief Operating Officer (Principal Financial and Accounting Officer) |
* The Registrant is a trust and Paul Fusaro is signing in his capacity as Principal Financial and Accounting Officer of Bitwise Investment Advisers, LLC, the Sponsor of the Trust.
[Signature page to SOX 302 Certification]
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Bitwise 10 Crypto Index Fund (BITW) (the “Trust”) on Form 10-Q for the period ending June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Hunter Horsley, Principal Executive Officer of Bitwise Investment Advisers, LLC, the Sponsor of the Trust, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
/s/ Hunter Horsley |
Hunter Horsley * |
President (Principal Executive Officer) |
August 7, 2025 |
* The Registrant is a trust and Hunter Horsley is signing in his capacity as Principal Executive Officer of Bitwise Investment Advisers, LLC, the Sponsor of the Trust.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Bitwise 10 Crypto Index Fund (BITW) (the “Trust”) on Form 10-Q for the period ending June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paul Fusaro, Principal Financial and Accounting Officer of Bitwise Investment Advisers, LLC, the Sponsor of the Trust, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
/s/ Paul Fusaro |
Paul Fusaro* |
Chief Operating Officer (Principal Financial and Accounting Officer) August 7, 2025 |
* The Registrant is a trust and Paul Fusaro is signing in his capacity as Principal Financial and Accounting Officer of Bitwise Investment Advisers, LLC, the Sponsor of the Trust.