BITW 10-Q
Bitwise 10 Crypto Index ETF (BITW)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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Commission File Number:
(Exact name of registrant as specified in its charter)
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(Address, including ZIP code, and telephone number, including area code, of registrant’s primary executive offices)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s):
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Name of each exchange on which registered
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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 (§232.405 of this chapter) 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.
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Smaller reporting company |
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Emerging growth company |
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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 in 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
The registrant had
Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” with respect to the financial condition, results of operations, plans, objectives, future performance and business of Bitwise 10 Crypto Index ETF (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. 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:
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.
Bitwise 10 CRYPTO INDEX ETF
Table of Contents
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.”
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
Bitwise 10 Crypto Index ETF
Statements of Assets and Liabilities
(Amounts in thousands, except Share and per Share amounts)
Assets |
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March 31, 2026 |
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December 31, 2025 |
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(unaudited) |
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Investments in Crypto Assets, at fair value (cost $ |
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$ |
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Receivable for Crypto Assets sold |
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Cash (1) |
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Total Assets |
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Liabilities |
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Payable for redemptions |
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— |
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Management fees payable |
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Payable for Crypto Assets purchased |
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Total Liabilities |
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Net Assets |
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$ |
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Shares issued and outstanding, |
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Principal Market NAV per Share |
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$ |
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$ |
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(1)
The accompanying notes are an integral part of the Financial Statements.
1
Bitwise 10 Crypto Index ETF
Schedules of Investment
(Amounts in thousands, except Units of Crypto Assets and percentages)
March 31, 2026 (unaudited) |
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Cost |
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Fair Value |
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Percentage of Shareholders' Equity |
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Investments in crypto assets, at fair value * |
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Bitcoin |
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$ |
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$ |
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% |
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Ethereum |
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XRP |
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Solana |
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Cardano |
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Chainlink |
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Litecoin |
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Avalanche |
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SUI |
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Polkadot |
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Total investments in crypto assets, at fair value (cost $ |
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$ |
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Other assets in excess of liabilities |
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Net Assets |
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$ |
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% |
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December 31, 2025 |
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Units |
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Cost |
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Fair Value |
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Percentage of Shareholders' Equity |
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Investments in crypto assets, at fair value * |
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Bitcoin |
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$ |
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$ |
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% |
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Ethereum |
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XRP |
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Solana |
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Cardano |
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Chainlink |
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Litecoin |
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Avalanche |
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SUI |
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Polkadot |
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Total investments in crypto assets, at fair value (cost $ |
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$ |
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Other assets in excess of liabilities |
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^ |
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Net Assets |
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$ |
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% |
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^ Less than
* Crypto Assets do not have a singular country or geographic region, therefore country information is omitted.
The accompanying notes are an integral part of the Financial Statements.
2
Bitwise 10 Crypto Index ETF
Statements of Operations
(Amounts in thousands)
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For the three months ended March 31, |
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2026 (unaudited) |
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2025 (unaudited) |
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Income |
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Investment income |
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$ |
— |
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$ |
— |
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Expenses |
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Management fee |
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Total expenses |
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Net Investment loss |
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Net realized and change in unrealized gain (loss) on |
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Net realized gain (loss) from investment in Crypto Assets |
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Net change in unrealized appreciation (depreciation) |
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( |
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( |
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Net realized and change in unrealized appreciation (depreciation) on investments |
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( |
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( |
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Net increase (decrease) in net assets resulting from |
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$ |
( |
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$ |
( |
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The accompanying notes are an integral part of the Financial Statements.
3
Bitwise 10 Crypto Index ETF
Statements of Changes in Net Assets
(Amounts in thousands, except Shares issued and redeemed)
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For the three months ended March 31, |
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2026 (unaudited) |
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2025 (unaudited) |
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Increase in net assets from operations |
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Net investment loss |
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$ |
( |
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$ |
( |
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Net realized gain (loss) from investment in Crypto Assets |
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Net change in unrealized appreciation (depreciation) from Crypto Assets |
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( |
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( |
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Net increase (decrease) in net assets resulting from operations |
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( |
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( |
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Increase (decrease) in net assets from capital share |
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Creations for Shares issued |
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— |
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— |
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Redemptions for Shares redeemed |
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( |
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— |
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Net increase (decrease) in net assets resulting |
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( |
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— |
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Total increase (decrease) in net assets from operations and capital share transactions |
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( |
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( |
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Net Assets |
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Beginning of Period |
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End of Period |
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$ |
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$ |
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Shares issued and redeemed: |
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Shares issued |
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— |
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— |
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Shares redeemed |
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( |
) |
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— |
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Net increase (decrease) in Shares issued and outstanding |
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( |
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— |
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The accompanying notes are an integral part of the Financial Statements.
4
Bitwise 10 Crypto Index ETF
Statements of Cash Flows
(Amounts in thousands)
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For the three months ended March 31, |
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2026 (unaudited) |
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2025 (unaudited) |
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Cash flows from operating activities |
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Net increase (decrease) in net assets resulting from operations |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: |
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Purchases of Crypto Assets |
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( |
) |
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( |
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Proceeds from Crypto Assets sold |
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Net realized (gain) loss from investment in Crypto Assets |
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( |
) |
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Net change in unrealized (appreciation) depreciation on investment in Crypto Assets |
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Changes in operating assets and liabilities: |
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Increase (Decrease) in Management Fee payable |
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) |
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Net cash provided by (used in) operating activities |
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Cash flows from financing activities |
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Creations for Shares issued |
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— |
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— |
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Redemptions for Shares redeemed |
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( |
) |
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— |
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Net cash provided by (used in) financing activities |
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( |
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— |
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Net increase (decrease) in cash |
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( |
) |
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( |
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Cash, beginning of period |
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Cash, end of period |
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$ |
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$ |
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The accompanying notes are an integral part of the Financial Statements.
5
Bitwise 10 Crypto Index ETF
Notes to Financial Statements
March 31, 2026 (Unaudited)
1. Organization
Bitwise 10 Crypto Index ETF (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. On December 3, 2025, in conjunction with the Trust's conversion to an Exchange Traded Product (“ETP”), the Trust's name was changed from “Bitwise 10 Crypto Index Fund”. Concurrently, the Sponsor and the Trustee entered into a First Amended and Restated Trust Agreement which became effective when the common shares (“Shares”) of beneficial interest that it issues began trading on the NYSE Arca, Inc. (the “Exchange”), under the trading symbol “BITW” on December 9, 2025. 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.
The Sponsor arranged for the creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering in the U.S. and the listing of Shares on the Exchange. The Sponsor develops a marketing plan for the Trust, prepares marketing materials regarding the Shares, and operates the marketing plan of the Trust on an ongoing basis. The Sponsor also oversees the additional service providers of the Trust and exercises managerial control of the Trust as permitted under the Trust Agreement. The Sponsor has agreed to pay all normal operating expenses of the Trust (except for litigation expenses and other extraordinary expenses) out of the Sponsor’s unitary management fee (the “Sponsor Fee”) and may determine in its sole discretion to assume legal fees and expenses of the Trust in excess of $
The Trust purchases and sells Crypto Assets directly and it creates or redeems its Shares in cash-settled transactions in blocks of
The statements of assets and liabilities and schedule of investment as of March 31, 2026, and the statements of operations, cash flows, and changes in net assets for the three-month periods ended March 31, 2026 and 2025, have been prepared on behalf of the Trust and are unaudited. In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position and results of operations for the three-month periods ended March 31, 2026 and 2025, and for all interim periods presented have been made. In addition, interim period results are not necessarily indicative of results for a full-year period.
6
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements.
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 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") Topic 946, Financial Services—Investment Companies.
Use of Estimates
The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these financial statements. 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 NAV and NAV per Share” 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 ("Investment Valuation - Principal Market Net Asset Value (NAV)" 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 statement 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 three month period ended March 31, 2026 and the year ended December 31, 2025.
Investment Valuation - Principal Market Net Asset Value (“NAV”)
To determine which market is the Trust's principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust's net asset value in accordance with U.S. GAAP ("Principal Market NAV" and "Principal Market NAV per Share"), the Trust follows ASC Topic 820-10, Fair Value Measurement, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for Crypto Assets in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Trust to assume that Crypto Assets are sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.
7
In determining which of the eligible Digital Asset Markets is the Trust's principal market, the Trust reviews these criteria in the following order:
First, the Trust reviews a list of Digital Asset Markets that are U.S. accessible, have historically provided publicly available data, and are exchanges that Bitwise normally transacts on. Specifically, the Trust utilizes a third-party valuation vendor, Lukka, Inc., to identify publicly available, well-established and reputable crypto asset exchanges selected in their sole discretion.
Second, Lukka, Inc. sorts these Digital Asset Markets from high to low by market-based volume and level of activity of Crypto Assets traded on each Digital Asset Market. For the three months ended March 31, 2026, this sort was performed for Digital Asset Markets for the period mid-February through mid-March 2026.
Third, Lukka, Inc. then reviews pricing fluctuations and the degree of variances in price on each Digital Asset Market during the 60 minutes prior to 4:00 pm. EST for Crypto Assets to identify any material notable variances that may impact the volume or price information of a particular Digital Asset Market.
Fourth, Lukka, Inc. then selects a Digital Asset Market as its principal market based on the highest market-based volume level of activity and price stability in comparison to the other Digital Asset Markets on the list.
As of December 31, 2025, Lukka, Inc. included Binance, Bitfinex, Bitflyer, Bitstamp, Bullish, Bybit, Coinbase, Crypto.com, Gate.io, Gemini, HitBTC, Huobi, itBit, Kraken, KuCoin, LMAX, MEXC Global, OKX and Poloniex as its primary Exchange Markets in consideration.
The Trust determines its principal market (or in the absence of a principal market the most advantageous market) annually and conducts a quarterly analysis to determine (i) if there have been recent changes to each Digital Asset Market’s trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Trust has access to, or (iii) if recent changes to each Digital Asset Market's price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Trust's determination of its principal market.
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 three-month period ended March 31, 2026.
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Asset |
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Principal Market Price |
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Principal |
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Bitcoin (BTC) |
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$ |
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Crypto.com |
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Ethereum (ETH) |
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$ |
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Crypto.com |
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XRP (XRP) |
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$ |
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Coinbase |
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Solana (SOL) |
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$ |
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Coinbase |
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Cardano (ADA) |
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$ |
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Coinbase |
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Avalanche (AVAX) |
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$ |
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Coinbase |
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Chainlink (LINK) |
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$ |
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Coinbase |
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Polkadot (DOT) |
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$ |
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Coinbase |
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Sui (SUI) |
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$ |
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Coinbase |
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Litecoin (LTC) |
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$ |
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Coinbase |
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Various inputs are used to determine 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 level of a value determined for an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are 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.
8
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
The cost basis of the investments in Crypto Assets recorded by the Trust for financial reporting purposes are the fair values of the Crypto Assets at the time of transfer. The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.
The following summarizes the Trust’s assets accounted for at fair value at March 31, 2026:
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Assets |
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Investments in crypto assets, at fair value |
|
$ |
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|
$ |
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|
$ |
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|
$ |
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||||
The following summarizes the Trust’s assets accounted for at fair value at December 31, 2025:
|
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Assets |
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Investments in crypto assets, at fair value |
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$ |
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|
$ |
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|
$ |
|
|
$ |
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||||
During the periods ended March 31, 2026 and December 31, 2025, there were
The following represents the changes in quantity of Crypto Assets and the respective fair values for the three-month period ended March 31,2026:
9
|
|
Bitcoin (BTC) |
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|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
— |
|
|
|
— |
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Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2026 |
|
|
|
|
$ |
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||
|
|
|
|
|
|
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||
|
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Ethereum (ETH) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2026 |
|
|
|
|
$ |
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||
|
|
|
|
|
|
|
||
|
|
XRP (XRP) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2026 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Solana (SOL) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2026 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Cardano (ADA) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
|
|
Balance at March 31, 2026 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Chainlink (LINK) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2026 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Avalanche (AVAX) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
10
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2026 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Sui (SUI) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2026 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Litecoin (LTC) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2026 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Polkadot (DOT) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
|
|
Balance at March 31, 2026 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
As of March 31, 2026, Bitcoin represented
Additions during the year primarily represent Crypto Assets purchased due to creations into the Trust and in-kind creations. Dispositions during the year represent Crypto Assets sold as a result of shareholder redemptions from the Trust and in-kind redemptions. In addition, Crypto Assets were sold to pay the Sponsor Fee of the Trust. For the three months ended March 31, 2026, the Trust recognized net realized gains of $
The following represents the changes in quantity of Crypto Assets and the respective fair values for the year ended December 31, 2025:
11
|
|
Bitcoin (BTC) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Ethereum (ETH) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
XRP (XRP) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Solana (SOL) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Cardano (ADA) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Chainlink (LINK) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Avalanche (AVAX) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
12
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Sui (SUI) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Litecoin (LTC) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Polkadot (DOT) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Bitcoin Cash (BCH) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
Uniswap (UNI) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
|
|
|
|
||
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
— |
|
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
|
NEAR Protocol (NEAR) |
|
|||||
|
|
Units |
|
|
Fair Value |
|
||
Balance at January 1, 2025 |
|
|
|
|
$ |
|
||
Purchases |
|
|
— |
|
|
|
— |
|
Sales |
|
|
( |
) |
|
|
( |
) |
Net realized gain (loss) on investment |
|
|
— |
|
|
|
( |
) |
13
Net change in unrealized appreciation (depreciation) on investment |
|
|
— |
|
|
|
|
|
Balance at December 31, 2025 |
|
|
|
|
$ |
|
As of December 31, 2025, Bitcoin represented
Calculation of NAV and NAV Per Share
On each business day, as soon as practicable after 4:00 p.m. ET, the NAV of the Trust is obtained by subtracting all accrued fees and other liabilities of the Trust from the fair value of the Crypto Assets and other assets held by the Trust. The Bank of New York Mellon (the “Administrator”) computes the NAV Per Share by dividing the NAV of the Trust by the number of Shares outstanding on the date the computation is made.
Income Taxes
The Trust is classified as a partnership for U.S. federal income tax purposes. As a result, the Trust itself is not subject to U.S. federal income tax. Instead, the Trust’s income and expenses “flow through” to the Shareholders, and the Administrator reports the Trust’s income, gains, losses, and deductions to the Internal Revenue Service on that basis. The Sponsor has analyzed applicable tax laws and regulations and their application to the Trust, and does not believe that there are any uncertain tax positions that require recognition of a tax liability as of March 31, 2026.
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 March 31, 2026 and December 31, 2025, the Trust has determined that
Organizational and Offering Costs
The costs of the Trust’s organization and the initial offering of the Shares are borne directly by the Sponsor. The Trust is not obligated to reimburse the Sponsor.
3. Related Party Transactions
The Trust pays a Management Fee of
14
The Trust may incur certain extraordinary, non-recurring expenses that are not assumed by the Sponsor, including but not limited to, taxes and governmental charges, any applicable brokerage commissions, financing fees, Crypto Asset network fees and similar transaction fees, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the Shareholders (including, for example, in connection with any fork of a digital-asset network, any Incidental Rights and any IR Asset, any indemnification of the Cash Custodian, Custodian, Prime Execution Agent, Transfer Agent, Administrator or other agents, service providers or counterparties of the Trust, and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters).
4. Creation and Redemption of Shares
When the Trust creates or redeems its Shares, it does so only in Baskets (blocks of
The Transfer Agent will facilitate the settlement of Shares in response to the placement of creation orders and redemption orders from Authorized Participants. The Trust has entered into the Cash Custody Agreement with BNY Mellon under which BNY Mellon acts as custodian of the Trust’s cash and cash equivalents. The Trust only creates or redeems its Shares at NAV.
Authorized Participants are the only persons that may place orders to create and redeem Baskets. Authorized Participants must be (1) registered broker-dealers or other securities market participants, such as banks and other financial institutions, that are not required to register as broker-dealers to engage in securities transactions described below, and (2) DTC Participants. To become an Authorized Participant, a person must enter into an Authorized Participant Agreement. The Authorized Participant Agreement provides the procedures for the creation and redemption of Baskets and for the delivery of the cash or Shares required for such creations and redemptions. The Authorized Participant Agreement and the related procedures attached thereto may be amended by the Trust, without the consent of any Shareholder or Authorized Participant. Authorized Participants must pay the Transfer Agent a nonrefundable fee for each order they place to create or redeem one or more Baskets. The transaction fee may be waived, reduced, increased or otherwise changed by the Sponsor in its sole discretion. Authorized Participants who make deposits with the Trust in exchange for Baskets receive no fees, commissions or other form of compensation or inducement of any kind from either the Trust or the Sponsor, and no such person has any obligation or responsibility to the Sponsor or the Trust to effect any sale or resale of Shares.
Each Authorized Participant is required to be registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, and a member in good standing with FINRA, or exempt from being or otherwise not required to be licensed as a broker-dealer or a member of FINRA, and is qualified to act as a broker or dealer in the states or other jurisdictions where the nature of its business so requires. Certain Authorized Participants may also be regulated under federal and state banking laws and regulations. Each Authorized Participant has its own set of rules and procedures, internal controls and information barriers as it determines is appropriate in light of its own regulatory regime.
5. Risks and Uncertainties
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 March 31, 2026 and December 31, 2025, Crypto Assets with a value 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.
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.
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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.
Coinbase Custody Trust Company, LLC 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.
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.
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.
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.
Since Crypto Assets are virtual and transactions in such Crypto Assets reside on distributed networks, governance of the underlying distributed network could be adversely altered should any individual or group obtain
As of the date of these financial statements, the transfer of digital currency assets from one party to another typically relies on an authentication process by an outside party known as a Miner. In exchange for compensation, the Miner 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 are dependent on interactions from these Miners or forgers. In the event that there was 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.
6. Financial Highlights
The following presents the financial highlights for the three months ended March 31, 2026 and 2025.
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Principal Market NAV per share, beginning of period |
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Ratios to average net assets 3,4,5 |
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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 March 31, 2026 and 2025; total returns and portfolio turnover have not been annualized.
7. Segment Reporting
An operating segment is defined in FASB Accounting Standards Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures (“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. Selected members of the of the Sponsor act as the Trust’s CODM. The Trust represents a operating segment, as the CODM monitors the operating results of the Trust as a whole and the Trust’s long-term strategic asset allocation is pre-determined in accordance with the terms of its Trust Agreement, based on a defined investment strategy which is executed by the Sponsor. The financial information in the form of the Trust’s assets, total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations, creations and redemptions), which are used by
8. Indemnifications
In the normal course of business, the Trust enters into contracts and agreements that contain a variety of representations and warranties and which provide general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. The Trust expects the risk of any future obligation under these indemnifications to be remote.
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9. Subsequent Events
The Trust has evaluated subsequent events through May 6, 2026, the date the financial statements were issued, and has determined that there are no subsequent events that require adjustments to or disclosure in the financial statements.
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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.
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 ETF (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 Index as closely as possible with certain exceptions determined by the Sponsor in its sole discretion, as described more fully in the section “Item 1. Business—Business of the Trust.” 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.
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”).
Results of Operations
For the three months ended March 31, 2026 Compared to the three months ended March 31, 2025^
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For the three months ended March 31, |
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Net investment loss |
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(1,547 |
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(7,859 |
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Net realized and unrealized gain (loss) |
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$ |
(238,601 |
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$ |
(247,783 |
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Net increase (decrease) in net assets resulting from operations |
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$ |
(240,148 |
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$ |
(255,642 |
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Net Assets1 |
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$ |
678,236 |
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$ |
1,110,098 |
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1. Net assets in the above table are calculated in accordance with U.S. GAAP based on the principal market price for Crypto Assets that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date.
March 31, 2026
During the three months ended March 31, 2026, the Trust's net assets decreased from $1,029,869 on December 31, 2025 to $678,236 on March 31, 2026. The decrease in the Trust's net assets resulted primarily from dispositions of approximately (1,161) BTC, (7,081)
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ETH, (3,455,017) XRP, (32,185) SOL, (2,091,171) ADA, (40,396) LINK, (4,372) LTC, (24,505) AVAX, (213,162) SUI and (94,028) DOT with a value of ($113,605) in connection with sales to pay the Management Fee, for redemption of Shares, and for rebalancing of Crypto Assets to the Index. Dispositions were partially offset by additions to the Trust of approximately 185,339 XRP and 2,681 SOL, with a value of $505 in connection with Share creations during the period.
Net realized and change in unrealized loss on investment in Crypto Assets for the three months ended March 31, 2026 was $(238,601), which included a realized gain of $69,785 from the sale of Crypto Assets to pay the Management Fee, for redemption of Shares, and for rebalancing to the Index, and a change in unrealized depreciation on investment in Crypto Assets of $(308,386). Net realized and change in unrealized loss on investment in Crypto Assets resulted primarily from price depreciation of the Trust's holdings during the period. Net decrease in net assets resulting from operations for the three months ended March 31, 2026 was $(240,148), which consisted of the net realized and unrealized loss on investment in Crypto Assets, less the Management Fee of $(1,547).
March 31, 2025
By comparison, during the three months ended March 31, 2025, the Trust's net assets decreased from $1,365,740 on December 31, 2024 to $1,110,098 on March 31, 2025. The decrease in the Trust's net assets resulted primarily from dispositions of approximately (144) BTC, (638) ETH, (173,121) XRP, (1,302) SOL, (15,915) ADA, (810) LINK, (1,571) AVAX, (71,048) SUI, (5,143) DOT, (10,612) BCH, (320,997) UNI and (680,675) NEAR with a value of ($28,376) in connection with sales to pay the Management Fee, for redemption of Shares, and for rebalancing of Crypto Assets to the Index. Dispositions were partially offset by additions to the Trust of approximately 502 ETH, 512,558 XRP, 3,603 SOL, 276,520 ADA, 1,717,309 SUI, 40,873 LTC and 320,997 UNI, with a value of $20,059 in connection with Share creations during the period.
During the three months ended March 31, 2025, net realized and change in unrealized loss on investment in Crypto Assets was $(247,783), which included a realized gain of $8,866 from the sale of Crypto Assets to pay the Management Fee, for redemption of Shares, and for rebalancing to the Index, and a change in unrealized depreciation on investment in Crypto Assets of $(256,649). Net realized and change in unrealized loss on investment in Crypto Assets resulted primarily from price depreciation of the Trust's holdings during the period. Net decrease in net assets resulting from operations for the three months ended March 31, 2025 was $(255,642), which consisted of the net realized and unrealized loss on investment in Crypto Assets, less the Management Fee of $(7,859).
^ Amounts displayed are in the ‘000s, except for per-Share/coin references.
Management Fee
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”) equal to 0.75% per annum of the NAV of the Trust Estate. The “Trust Estate” means (i) all the Portfolio Crypto Assets and securities owned by or on behalf of the Trust, (ii) all other property and investments of any and all kinds held by the Trust, (iii) all proceeds from the sale of Portfolio Crypto Assets, securities, and any other property or investments held by the Trust pending use of such cash for payment of Trust Expenses or distribution to the Shareholders, and (iv) any rights of the Trust pursuant to any agreements, other than the Trust Agreement, to which the Trust is a party. Except during periods during which all or a portion of the Management Fee is being waived, the Management Fee will accrue daily and will be payable in cash or in Crypto Assets monthly. The Administrator calculates the Management Fee on a daily basis by applying a 0.75% annualized rate to the Trust Estate pursuant to the Trust’s valuation procedures. The amount of cash or Crypto Assets payable in respect of each daily accrual shall be determined by reference to the Trust’s valuation procedures.
The NAV of the Trust is reduced each day by the amount of the Management Fee calculated each day. On or about the last day of each month, either 1) an amount of Crypto Assets is transferred from the Custodial Account to the Sponsor’s account equal to the sum of all daily Management Fees accrued for the month in U.S. dollars divided by the 4:00 p.m. ET valuation of the Trust Estate on the last day of the month or 2) the sum of the daily Management Fee accrual for the month will be paid to the Sponsor in cash. The Sponsor is responsible for paying any fees or costs associated with the transfer of Crypto Assets or cash to the Sponsor. The Sponsor, from time to time, may temporarily waive all or a portion of the Management Fee in its sole discretion. To the extent not already disclosed in the prospectus, the Sponsor may notify Shareholders of its intent to commence, or cease, waiving the Management Fee on the Trust’s website, in a prospectus supplement, through a current report on Form 8-K and/or in the Trust’s annual or quarterly reports.
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 listing of the Shares on NYSE Arca, 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
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firms) that assist in trade execution for accessing Crypto Asset liquidity are charged to the Trust (and are not assumed by the Sponsor) 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’ Statement 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 indemnification and extraordinary costs of the Administrator and Auditor, costs of any litigation or investigation involving Trust activities, any financial distress, restructuring, and indemnification expenses.
The Sponsor, from time to time, may temporarily waive all or a portion of the Management Fee in its sole discretion. To the extent not already disclosed in the prospectus, the Sponsor may notify Shareholders of its intent to commence, or cease, waiving the Management Fee on the Trust’s website, in a prospectus supplement, through a current report on Form 8-K, and/or in the Trust’s annual or quarterly reports.
In addition, the Sponsor may, in its sole discretion, agree to rebate all or a portion of the Management Fee attributable to Shares held by certain institutional investors or entities. Any such rebate will be subject to negotiation and written agreement between the Sponsor and the investor/entity on a case-by-case basis. The Sponsor is under no obligation to provide any rebates of the Management Fee. Neither the Trust nor the Trustee will be a party to any Management Fee rebate arrangements negotiated by the Sponsor.
The Administrator and/or the Sponsor will direct the Custodian to transfer Portfolio Crypto Assets from the Custodial Account to pay the Management Fee and any other Trust expenses not assumed by the Sponsor. The costs of such transfers will be the responsibility of the Custodian. To pay the Management Fee and expenses not assumed by the Sponsor that are denominated in U.S. dollars, the Sponsor, on behalf of the Trust, may sell the Trust’s Portfolio Crypto Assets as necessary to pay such expenses. Such sales will be undertaken pursuant to the Trust-Directed Trade Model unless no Trading Counterparty is willing or able to effectuate the trade. Transfer fees with respect to this on-chain transfer of Portfolio Crypto Assets will be paid by the Custodian. The cash proceeds of the sale will be sent to the Sponsor, which will use such proceeds to pay the expenses. Any remaining cash will be distributed back to the Cash Custodian. To the extent that the Trust must utilize the Agent Execution Model to undertake Portfolio Crypto Assets sales to pay for expenses not assumed by the Sponsor, the Prime Execution Agent, acting in an agency capacity, would conduct the sale on behalf of the Trust with third parties through its Coinbase Prime service pursuant to the Prime Execution Agreement. Transfers of Portfolio Crypto Assets from the Custodial Account to the Trust’s Trading Balance in connection with such sales are “on-chain” transactions represented on the respective Crypto Asset’s blockchain. Each delivery or sale of Portfolio Crypto Assets by the Trust to pay the Management Fee or other Trust expenses will be a taxable event to Shareholders. See “United States Federal Income Tax Consequences.”
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 a 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 Form 10-K filed with the SEC on March 2, 2026, 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
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Crypto Assets for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 and the year ended December 31, 2025.
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 by 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 the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these financial statements. 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 NAV and NAV per Share” 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 ("Investment Valuation - Principal Market Net Asset Value (NAV)" 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. The time used is 4:00 pm ET which corresponds to 20:00 UTC during Daylight Savings Time and 21:00 UTC during non-Daylight Savings Time. The Sponsor’s Valuation Policy provides a listing of preferred exchanges. While some Crypto Assets are valued based on prices reported in the public markets, other Crypto Assets may be more thinly-traded or subject to irregular trading activity. Determinations on the value of certain Crypto Assets, and how to value such assets as to which limited prices or quotations are available, are based on the Sponsor’s recommendations or instructions.
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 statement 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 three month period ended March 31, 2026 and the year ended December 31, 2025.
Investment Valuation - Principal Market Net Asset Value (“NAV”)
To determine which market is the Trust's principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust's net asset value in accordance with U.S. GAAP ("Principal Market NAV" and "Principal Market NAV
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per Share"), the Trust follows ASC Topic 820-10, Fair Value Measurement, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for Crypto Assets in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Trust to assume that Crypto Assets are sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.
In determining which of the eligible Digital Asset Markets is the Trust's principal market, the Trust reviews these criteria in the following order:
First, the Trust reviews a list of Digital Asset Markets that are U.S. accessible, have historically provided publicly available data, and are exchanges that Bitwise normally transacts on. Specifically, the Trust utilizes a third-party valuation vendor, Lukka, Inc., to identify publicly available, well-established and reputable crypto asset exchanges selected in their sole discretion.
Second, Lukka, Inc. sorts these Digital Asset Markets from high to low by market-based volume and level of activity of Crypto Assets traded on each Digital Asset Market. For the three months ended March 31, 2026, this sort was performed for Digital Asset Markets for the period mid-February through mid-March 2026.
Third, Lukka, Inc. then reviews pricing fluctuations and the degree of variances in price on each Digital Asset Market during the 60 minutes prior to 4:00 pm. EST for Crypto Assets to identify any material notable variances that may impact the volume or price information of a particular Digital Asset Market.
Fourth, Lukka, Inc. then selects a Digital Asset Market as its principal market based on the highest market-based volume level of activity and price stability in comparison to the other Digital Asset Markets on the list.
As of December 31, 2025, Lukka, Inc. included Binance, Bitfinex, Bitflyer, Bitstamp, Bullish, Bybit, Coinbase, Crypto.com, Gate.io, Gemini, HitBTC, Huobi, itBit, Kraken, KuCoin, LMAX, MEXC Global, OKX and Poloniex as its primary Exchange Markets in consideration.
The Trust determines its principal market (or in the absence of a principal market the most advantageous market) annually and conducts a quarterly analysis to determine (i) if there have been recent changes to each Digital Asset Market’s trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Trust has access to, or (iii) if recent changes to each Digital Asset Market's price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Trust's determination of its principal market.
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 three-month period ended March 31, 2026.
|
||||||
Asset |
|
Principal Market Price |
|
|
Principal |
|
Bitcoin (BTC) |
|
$ |
67,805.29 |
|
|
Crypto.com |
Ethereum (ETH) |
|
$ |
2,095.22 |
|
|
Crypto.com |
XRP (XRP) |
|
$ |
1.34 |
|
|
Coinbase |
Solana (SOL) |
|
$ |
82.60 |
|
|
Coinbase |
Cardano (ADA) |
|
$ |
0.24 |
|
|
Coinbase |
Avalanche (AVAX) |
|
$ |
8.89 |
|
|
Coinbase |
Chainlink (LINK) |
|
$ |
8.77 |
|
|
Coinbase |
Polkadot (DOT) |
|
$ |
1.27 |
|
|
Coinbase |
Sui (SUI) |
|
$ |
0.88 |
|
|
Coinbase |
Litecoin (LTC) |
|
$ |
54.01 |
|
|
Coinbase |
Various inputs are used to determine 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 level of a value determined for an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are as follows:
23
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 cost basis of the investments in Crypto Assets recorded by the Trust for financial reporting purposes are the fair values of the Crypto Assets at the time of transfer. The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.
The following summarizes the Trust’s assets accounted for at fair value at March 31, 2026:
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments in crypto assets, at fair value |
|
$ |
678,167 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
678,167 |
|
The following summarizes the Trust’s assets accounted for at fair value at December 31, 2025:
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments in crypto assets, at fair value |
|
$ |
1,029,868 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,029,868 |
|
During the periods ended March 31, 2026 and December 31, 2025, there were no significant transfers into or out of any levels of the fair value hierarchy.
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 Crypto Asset. 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.
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 specific identification cost method. Any change in net unrealized gain or loss is reported in the statement 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 such new Crypto Assets to the private wallets or exchange accounts that support the new Crypto Asset and that hold existing related Crypto Assets. Unlike Hard Forks, 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 records receipt of airdropped Crypto Assets when received if there is value to the Trust in doing so. Crypto Assets received from Airdrops have no cost basis and the Trust recognizes unrealized gains equal to the fair value of the new Crypto Asset received. During the period from January 1, 2023 to December 31, 2023, the Trust was eligible for a Flare (FLR) airdrop. The Airdrop was based on the Trust’s XRP holding in its custody vault as of December 12, 2020. The Trust elected to participate in the Airdrop on April 17, 2023. Other income resulting from the Airdrop was booked into the ETF's assets. At the time of the Airdrop, the result was a positive NAV increase of 0.013%, less than $0.00 NAV increase and $68,436 net asset increase to the Trust. On April 18, 2023, the Trust sold the FLR and raised USD resulting in a minor loss to the Trust. The USD was used to purchase other assets in the Trust’s portfolio, since FLR was not part
24
of the Index of the Trust. The impact of this Airdrop can be seen within the Statement of Operations under Other income and Net realized gain (loss) from Crypto Assets.
Income Taxes
The Trust is classified as a partnership for U.S. federal income tax purposes. As a result, the Trust itself is not subject to U.S. federal income tax. Instead, the Trust’s income and expenses “flow through” to the Shareholders, and the Administrator reports the Trust’s income, gains, losses, and deductions to the Internal Revenue Service on that basis. The Sponsor has analyzed applicable tax laws and regulations and their application to the Trust, and does not believe that there are any uncertain tax positions that require recognition of a tax liability as of March 31, 2026.
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 March 31, 2026 and December 31, 2025, 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 March 31, 2026, all tax years since inception remain open for examination. There were no examinations in progress at period end.
Risks and Uncertainties
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 March 31, 2026 and December 31, 2025, Crypto Assets with a value of approximately $0 and $0, respectively, resided on exchanges. At March 31, 2026, the Trust had a $900,188 receivable from Crypto Assets sold and a payable of $389,279 from Crypto Assets purchased. At December 31, 2025 the Trust had approximately $6,041 in cash in the Trust bank accounts. At December 31, 2025, the Trust had an $18,910,054 receivable from Crypto Assets sold and a payable of $639,400 from Crypto Assets purchased. At December 31, 2025 the Trust had approximately $14,700 in cash in the Trust bank accounts.
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.
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.
Coinbase Custody Trust Company, LLC 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.
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.
25
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.
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.
Since Crypto Assets are virtual and transactions in such Crypto Assets 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.
As of the date of these financial statements, the transfer of digital currency assets from one party to another typically relies on an authentication process by an outside party known as a Miner. In exchange for compensation, the Miner 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 are dependent on interactions from these Miners or forgers. In the event that there was 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.
Off-Balance Sheet Arrangements and Contractual Obligations
As of March 31, 2026, the Trust has not used, nor does it expect to use in the future, special purpose entities to facilitate off-balance sheet financing arrangements and has no loan guarantee arrangements or off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions related to certain risks service providers undertake in performing services which are in the best interests of the Trust. While the Trust’s exposure under such indemnification provisions cannot be estimated, these general business indemnifications are not expected to have a material impact on the Trust’s financial position.
Management Fee payments made to the Sponsor are calculated as a fixed percentage of the Trust’s NAV. As such, the Sponsor cannot anticipate the payment amounts that will be required under these arrangements for future periods as NAVs are not known until a future date.
No material changes have occurred during the three months ended March 31, 2026.
26
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The Trust Agreement does not authorize the Trustee to borrow for 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.
Conclusion Regarding the Effectiveness of 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 was no change in the Trust’s internal controls over financial reporting that occurred during the Trust’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, these internal controls.
27
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, 2025, filed with the SEC on March 2, 2026, as amended by Amendment No. 1 to Annual Report on Form 10-K/A filed with the SEC on March 11, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Period |
|
Total Shares Redeemed |
|
|
Average Price Per Share |
|
||
January 1, 2026 – January 31, 2026 |
|
|
630,000.00 |
|
|
$ |
62.74 |
|
February 1, 2026 – February 28, 2026 |
|
|
1,320,000.00 |
|
|
$ |
44.00 |
|
March 1, 2026 – March 31, 2026 |
|
|
300,000 |
|
|
$ |
46.29 |
|
28
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.
|
|
Exhibit Number
|
Exhibit Description
|
|
|
3.1 |
|
|
|
3.2 |
|
|
|
10.1 |
|
|
|
31.1* |
|
|
|
31.2* |
|
|
|
32.1* |
|
|
|
32.2* |
|
|
|
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 |
|
|
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 ETF 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.
29
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:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
51% Attacks: Occur when an attacker controls a majority of the computing power (for PoW Blockchains) or staked Crypto Assets (for PoS Blockchains) necessary to validate transactions on a Blockchain, giving the attacker a majority of the validation power on the network. Miners or Validators on Blockchains who successfully obtain this validation power may block other users’ transactions or make it appear as though they still have Crypto Assets that have been spent, which is known as a “double-spend attack,” or otherwise change the order of transactions. A 51% attack may also allow an attacker to use its monopoly over new blocks to “censor” other user transactions by actively preventing them from being written sustainably to the Blockchain.
Administrator: BNY Mellon.
Agent Execution Model: The model whereby the Prime Execution Agent, acting in an agency capacity, conducts Crypto Asset purchases and sales on behalf of the Trust with third parties through its Coinbase prime service pursuant to the Prime Execution Agreement.
Airdrops: 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.
Auditor: KPMG LLP.
Authorized Participant: One that purchases or redeems Baskets from or to the Trust.
Basket: A block of 10,000 Shares used by the Trust to issue or redeem Shares.
Basket Amount: The quantity of Crypto Assets attributable to each Share of the Trust (net of accrued but unpaid expenses and liabilities) multiplied by the number of Shares comprising a Basket (10,000).
Bitcoin (or BTC): 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: The public transaction ledger of a Crypto Asset’s network on which transactions are recorded.
BNY Mellon: The Bank of New York Mellon, a national association bank in New York.
Business Day: Any day other than a day when the Exchange or the New York Stock Exchange is closed for regular trading.
Cash Custodian: BNY Mellon.
Code: Internal Revenue Code of 1986, as amended.
Crypto Assets: A Crypto Asset designed to work as a store of 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: 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: A dealer market, a brokered market, principal to principal market or exchange market on which Crypto Assets are bought, sold, and traded.
30
Custodial Account: A segregated custody account to store private keys, which allow for the transfer of ownership or control of the Trust’s Portfolio Crypto Assets, on the Trust’s behalf. Under the Custodian Agreement, the Custodian controls and secures the Trust’s Custodial Account.
Custodian: Coinbase Custody Trust Company, LLC. On behalf of the Trust, the Custodian holds the Portfolio Crypto Assets.
DSTA: Delaware Statutory Trust Act.
Emissions: 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.
Ethereum (or ETH): A type of Crypto Asset based on an open-source cryptographic protocol existing on the Ethereum network, comprising one type of the Crypto Assets underlying the Trust's Shares. The native Crypto Asset for the Ethereum network is ether.
ETP: Exchange-traded product.
Exchange: NYSE Arca, Inc.
Extraordinary Expenses: Expenses outside of the Trust’s normal business operations which include, but are not limited to, any non-customary costs and expenses including indemnification and extraordinary costs of the Administrator and Auditor, costs of any litigation or investigation involving Trust activities, financial distress and restructuring and indemnification expenses.
FASB: Financial Accounting Standards Board.
FDIC: Federal Deposit Insurance Corporation.
FINRA: Financial Industry Regulatory Authority.
Forked Asset: The crypto asset resulting from a “hard fork”, as determined by the Sponsor in its discretion as set forth in the Trust Agreement.
GAAP: U.S. generally accepted accounting principles.
Hard Fork: A backward-incompatible change to a blockchain protocol such that nodes running the prior version of the software will reject blocks produced under the new rules.
Index: The Bitwise 10 Large Cap Crypto Index, the benchmark index for the Trust.
Index Provider: 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.
IRS: U.S. Internal Revenue Service.
Management Fee: Equal to 0.75% per annum of the net asset value.
Marketing Agent: Foreside Fund Services, LLC.
Miners: 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: 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: Net asset value.
NAV of the Trust: Net asset value of the Trust, which is a Non-GAAP metric and is determined each business day by valuing the Trust’s Crypto Assets using the CME CF Cryptocurrency Reference Rates, less the Trust’s accrued but unpaid expenses.
Portfolio Crypto Assets: The group of selected Crypto Assets that are held by the Trust.
31
PoS: Proof of stake and is a structure wherein entities can provide network verification services for the Blockchain network and, in turn, receive rewards in the form of Crypto Assets. PoS systems require entities to lock up and put at risk (aka, “stake”) a certain amount of the Crypto Asset associated with the relevant Blockchain in order to process transactions. These staked assets are lost if a network verifier processes a transaction in a way that is fraudulent or violates the rules of the underlying Blockchain. PoS is a structure that, among other things, seeks to avoid the heavy energy consumption that PoW systems typically require.
PoW: Proof of work and is a structure in which Miners provide a Mining service for the Blockchain network and receive payment. PoW was the first mining structure and involves computers competing to solve complicated cryptographic puzzles that require a substantial amount of energy as a way of securing the network and processing transactions.
Prime Execution Agent: Coinbase, Inc.
Prime Execution Agreement: The agreement between Coinbase, Inc. and the Trust that sets forth the terms and conditions pursuant to which Coinbase, Inc., and its affiliates, agree to open and maintain a prime broker account and provide services relating to trade execution.
SEC (or Commission): The U.S. Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended.
Shareholders: Holders of common units of fractional undivided beneficial interest of the Trust.
Sponsor: Bitwise Investment Advisers, LLC.
Staking: The act of committing capital in the form of the PoS Blockchain’s native Crypto Asset to participate in verifying and adding transactions to the Blockchain digital ledger, and in securing the network in exchange for a Crypto Asset as a reward.
Trading Counterparty: The trading counterparties that have been approved by the Sponsor.
Transfer Agent: BNY Mellon.
Trust: The Bitwise 10 Crypto Index ETF.
Trustee: The Delaware Trust Company.
Trust Agreement: The Amended and Restated Declaration of Trust and Trust Agreement of Bitwise 10 Crypto Index ETF, entered into by the Sponsor and the Trustee.
UCC: Uniform Commercial Code.
U.S.: The United States of America.
Validators: Stakeholders that help process transactions and ensure that the distributed ledgers that make up a PoS Blockchain network stay consistent with one another.
32
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 ETF (BITW) |
||
|
|
|
By: |
/s/ Paul Fusaro |
|
|
Name: |
Paul Fusaro |
|
Title: |
Chief Operating Officer (Principal Executive Officer)* |
|
|
|
By: |
/s/ James Bebrin III |
|
|
Name: |
James Bebrin III |
|
Title: |
Vice President (Principal Financial Officer and Principal Accounting Officer)* |
Date: May 6, 2026
* 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.
33