VanEck Bitcoin ETF 10-K for FY2023

VanEck Bitcoin ETF (HODL)

10-K 2024-03-28 For: 2023-12-31

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Added on April 10, 2026

About this 10-K

VanEck Bitcoin ETF filed this 10-K on March 28, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

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☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the fiscal year ended December 31, 2023
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from to

Delaware		85-6811021
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Shares		HODL		Cboe BZX Exchange, Inc.

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☒

PART I	1
Item 1. Business	1
Item 1A. Risk Factors	22
Item 1B. Unresolved Staff Comments	75
Item 1C. Cybersecurity	75
Item 2. Properties	77
Item 3. Legal Proceedings	77
Item 4. Mine Safety Disclosures	77
PART II	77
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	77
Item 6. [Reserved]	77
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	77
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	79
Item 8. Financial Statements and Supplementary Data	79
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	79
Item 9A. Controls and Procedures	79
Item 9B. Other Information	80
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	80
PART III	80
Item 10. Directors, Executive Officers and Corporate Governance	80
Item 11. Executive Compensation	81
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	81
Item 13. Certain Relationships and Related Transactions, and Director Independence	81
Item 14. Principal Accounting Fees and Services	81
Part IV	82
Item 15. Exhibits, Financial Statement Schedules	82
Item 16. Form 10-K Summary	83

Bitcoin Exchanges included in the MarketVector^TMBitcoin Benchmark Rate as of February 29, 2024	Average Daily Volume (in thousands of USD)

Bitstamp	$	60,751,371.12
Coinbase	$	439,593,456.10
itBit	$	10,190,354.97
LMAX	$	79,890,041.55
Kraken	$	98,679,706.67

Period	itBit	LMAX	Bitstamp	Coinbase	Kraken	Others
2023 Q1	0.69%	10.23%	5.45%	46.64%	10.06%	25.75%
2023 Q2	1.08%	11.85%	7.31%	44.69%	12.77%	20.87%
2023 Q3	1.05%	9.94%	8.84%	56.82%	10.83%	10.64%
2023 Q4	0.34%	7.45%	8.75%	63.36%	14.88%	5.23%

	2023
Audit fees	$	20,000
Audit-related Fees	$	0
Tax fees	$	0
All other fees	$	0
Total	$	20,000

Exhibit No.		Description

3.1		Certificate of Trust incorporated by reference to Exhibit 3.1 of the Registration Statement on Form S-1 filed by the Registrant on December 30, 2020

4.1		Third Amended and Restated Declaration of Trust and Trust Agreement incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by the Registrant on March 1, 2024

4.2*		Description of the Registrant’s Securities Registered Under Section 12 of the Securities Exchange Act of 1934

10.1		Form of Authorized Participant Agreement by reference to Exhibit 10.1 of the Registration Statement on Form S-1 filed by the Registrant on December 29, 2023

10.2		Form of Marketing Agent Agreement incorporated by reference to Exhibit 10.2 of the Registration Statement on Form S-1 filed by the Registrant on October 27, 2023

10.3		Form of Custodial Services Agreement incorporated by reference to Exhibit 10.3 of the Registration Statement on Form S-1 filed by the Registrant on October 27, 2023

10.4		Trust Administration and Accounting Agreement incorporated by reference to Exhibit 10.4 of the Registration Statement on Form S-1 filed by the Registrant on December 29, 2023

10.5		Transfer Agency Agreement incorporated by reference to Exhibit 10.5 of the Registration Statement on Form S-1 filed by the Registrant on December 29, 2023

10.6		Form of Index Sub-Licensing Agreement incorporated by reference to Exhibit 10.6 of the Registration Statement on Form S-1 filed by the Registrant on October 27, 2023

10.7		Cash Custody Agreement incorporated by reference to Exhibit 10.7 of the Registration Statement on Form S-1 filed by the Registrant on December 29, 2023

10.8		Subscription Agreement incorporated by reference to Exhibit 10.8 of the Registration Statement on Form S-1 filed by the Registrant on December 29, 2023

10.9		Clearing Agreement incorporated by reference to Exhibit 10.9 of the Registration Statement on Form S-1 filed by the Registrant on January 8, 2024

31.1*		Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification by Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification by Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

97.1*		Executive Officer Incentive-Based Compensation Clawback Policy

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

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*		Cover Page Interactive Data File included as Exhibit 101 (embedded within the Inline XBRL document)

	Page
Report of Independent Registered Public Accounting Firm	F-3

Statement of Assets and Liabilities	F-4

Statement of Operations	F-5

Statement of Changes in Net Assets	F-6

Notes to Financial Statements	F-7

Assets
Cash	$	100,000
Total assets		100,000

Liabilities
Total liabilities		–

Commitments and Contingencies (Note 6)		–
Net Assets	$	100,000

Shares issued and outstanding (no par value, unlimited amount authorized)		2,000

Net Asset Value per Share (Note 2)	$	50.00

Investment Income
Total investment income	$	–

Expenses
Total expenses		–
Net investment income (loss)		–

Net realized gain (loss) and change in unrealized appreciation (depreciation)
Net realized gain (loss) on:
Investments		–
Total realized gain (loss)		–
Net change in unrealized appreciation (depreciation) on:
Investments		–
Total net change in unrealized appreciation (depreciation)		–

Net realized gain (loss) and unrealized appreciation (depreciation)		–

Net increase (decrease) in net assets resulting from operations	$	–

Net Increase (Decrease) in net assets from operations
Net investment income (loss)	$	–
Net realized gain (loss)		–
Change in net unrealized appreciation (depreciation)		–
Net increase (decrease) in net assets resulting from operations		–

Capital Share Transactions
Capital contributions		100,000
Capital withdrawals		–
Total capital share transactions		100,000
Net increase (decrease) in net assets		100,000

Net Assets
Beginning of period		–
End of period	$	100,000

A.	Basis of Preparation and Use Estimates

	The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

	The Trust qualifies as an investment company solely for accounting purposes and not for any other purpose and follows accounting and reporting requirements of Accounting Standards Codification (“ASC”) 946 Financial Services—Investment Companies, but is not registered, and is not required to be registered, as an investment company under the Investment Company Act of 1940, as amended.

B.	Cash

	Cash represents cash deposits held at a major financial institution and is subject to credit risk to the extent its balance exceeds the federally insured limits. As of December 31, 2023, the Trust’s cash balance did not exceed the federal insured limits.

C.	Investment Valuation

	The Trust values its investments in bitcoin and other assets and liabilities at fair value, daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.

	The Trust identifies and determines the bitcoin principal market (or in the absence of a principal market, the most advantageous market) for GAAP purposes consistent with the application of fair value measurement framework in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10 as of 4:00 p.m. Eastern time. Under ASC 820-10, a principal market is the market with the greatest volume and activity level for the asset or liability. The determination of the principal market will be based on the market with the greatest volume and level of activity that can be accessed. The Sponsor on behalf of the Trust will determine in its sole discretion the valuation sources and policies used to prepare the Trust’s financial statements in accordance with GAAP.

	Various inputs are used in determining the fair value of assets and liabilities. Inputs may be based on independent market data (observable inputs) or they may be internally developed (unobservable inputs). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The three levels of the fair value hierarchy are as follows:

	Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

	Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be

	active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and

	Level 3 – Unobservable inputs where there are little or no market activity for the asset or liability, including the Trust’s assumptions used in determining the fair value of investments.

D.	Bitcoin

	Bitcoin transactions are accounted for on trade date. Realized gains and losses on sale of bitcoin are determined based on the average cost method. Proceeds received by the Trust from the issuance of creation baskets consist of bitcoin. Such deposits are held by the custodian on behalf of the Trust until (i) delivered out in connection with redemptions of creation baskets or (ii) sold by the Sponsor, which may be facilitated by the custodian, to pay fees due to the Sponsor and Trust expenses and liabilities not assumed by the Sponsor.

	For accounting purposes only, the Trust is an investment company and, therefore, will apply the specialized accounting and reporting guidance ASC Topic 946. Under ASC Topic 946, the average cost method is an accepted method to determine realized gains and losses on the sale of bitcoin.

	At December 31, 2023, all Trust assets were held in U.S. Cash, there was no Bitcoin held.

E.	Calculation of Net Asset Value

	On each business day, at 4:00 p.m. EST, the net asset value of the Trust is obtained by subtracting all accrued fees, expenses and other liabilities of the Trust from the fair value of total assets held by the Trust. The administrator computes the net asset value per Share by dividing the net asset value of the Trust by the number of Shares outstanding on the date the computation is made.

F.	Federal Income Taxes

	The Trust is treated as a grantor trust for federal income tax purposes and, therefore, no provision for federal income taxes is required. Any interest, expenses, gains and losses are passed through to the holders of Shares of the Trust. The Sponsor has reviewed the tax positions as of December 31, 2023, and has determined that no provision for income tax is required in the Trust’s financial statements.

	Shares			Amount
Shares issued		2,000	(a)	$	100,000
Shares redeemed		—			—
Net increase		2,000		$	100,000

By:	VanEck Digital Assets, LLC, as Sponsor of the Trust (registrant)

By:	/s/ Jonathan R. Simon
	Name: Jonathan R. Simon
	Title: Senior Vice President, General Counsel and Secretary
Date:	March 28, 2024

Signature	Title	Date

	Jan F. van Eck
/s/ Jan F. van Eck	President and Chief Executive Officer	March 28, 2024
	(Principal Executive Officer)

	John J. Crimmins
/s/ John J. Crimmins	Vice President, Chief Financial	March 28, 2024
	Officer and Treasurer
	(Principal Financial Officer and
	Principal Accounting Officer)

Date: March 28, 2024

	/s/ Jan F. van Eck
	Jan F. van Eck*
	President and Chief Executive Officer
	(Principal Executive Officer)

Date: March 28, 2024

	/s/ John J. Crimmins
	John J. Crimmins*
	Vice President, Chief Financial Officer and Treasurer
	(Principal Financial Officer and Principal Accounting Officer)

		Rule 10D-1 and any other applicable law, regulation, rule or interpretation promulgated or issued in connection with the Recovery Policy.

	11.3	Except to the extent prohibited by applicable law or the Listing Standards, the Administrator may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Administrator at any time. Without limiting the generality of the foregoing, the Administrator may delegate to one or more officers of the Trust the authority to act on behalf of the Administrator with respect to any matter, right, obligation, or election which is the responsibility of, or which is allocated to, the Administrator herein, and which may be so delegated as a matter of law and in compliance with the Listing Standards

/s/ Jan F. van Eck

Jan F. van Eck
President and Chief Executive Officer
(Principal Executive Officer)

/s/ John J. Crimmins

John J. Crimmins
Vice President, Chief Financial Officer and Treasurer