Bitwise Bitcoin ETF

Previous wording

Bitwise Bitcoin ETF (the “Trust”) is a Delaware statutory trust formed on August 29, 2019.The Trust issues common shares (“Shares”), which represent units of fractional undivided beneficial interest in and ownership of the Trust. The Shares are listed on the NYSE Arca Inc. (the “Exchange”) under the ticker symbol “BITB.” The Trust’s commencement of operations was January 11, 2024.

Current wording

Bitwise Bitcoin ETF (the “Trust”) is a Delaware statutory trust formed on August 29, 2019. The Trust continuously issues common shares (“Shares”), representing units of undivided beneficial ownership of the Trust. The Shares are listed on the NYSE Arca Inc. (the “Exchange”) under the ticker symbol “BITB.” The Trust’s commencement of operations was January 10, 2024. Bitwise Investment Advisers, LLC (the “Sponsor”) serves as the sponsor of the Trust.

Previous wording

The Trust’s investment objective is to seek to provide shareholders of the Trust (“Shareholders”) with exposure to the value of bitcoin held by the Trust that is reflective of the actual bitcoin market in which investors can purchase or sell bitcoin, less the expenses of the Trust’s operations and other liabilities. In seeking to achieve its investment objective, the Trust holds bitcoin and establishes its net asset value (“NAV") by reference to the CME CF Bitcoin Reference Rate - New York Variant (“BRRNY”). The BRRNY was designed to provide a daily, 4:00 p.m. New York time reference rate of the U.S. dollar price of one bitcoin and is calculated by CF Benchmarks Ltd. (the “Benchmark Provider”) based on an aggregation of executed trade flow of several large bitcoin trading platforms (“Constituent Platforms”).

Current wording

The Trust’s investment objective is to seek to provide shareholders of the Trust (“Shareholders”) with exposure to the value of bitcoin held by the Trust that is reflective of the actual bitcoin market in which investors can purchase or sell bitcoin, less the expenses of the Trust’s operations and other liabilities. In seeking to achieve its investment objective, the Trust holds bitcoin and establishes its net asset value (“NAV") by reference to the CME CF Bitcoin Reference Rate - New York Variant (“BRRNY”). The BRRNY was designed to provide a daily, 4:00 p.m. ET reference rate of the U.S. dollar price of one bitcoin and is calculated by CF Benchmarks Ltd. (the “Benchmark Provider”) based on an aggregation of executed trade flow of major bitcoin trading platforms (“Constituent Platforms”).

Previous wording

The Shares may trade at a premium over, or a discount to, the NAV per Share as a result of price volatility, trading volume and closings of the exchanges on which the Sponsor purchases bitcoins on behalf of the Trust due to fraud, failure, security breaches or otherwise, and the fact that supply and demand forces at work in the secondary trading market for Shares are related, but not identical, to the supply and demand forces influencing the market price of bitcoin. As a result of the foregoing, the price of the Shares as quoted on NYSE has varied from the value of the Trust’s NAV per Share since the Shares were approved for quotation on January 11, 2024.

Current wording

The Shares may trade at a premium over, or a discount to, the NAV per-share as a result of price volatility, trading volume and closings of the exchanges on which the Sponsor purchases bitcoins on behalf of the Trust due to fraud, failure, security breaches or otherwise, and the fact that supply and demand forces at work in the secondary trading market for Shares are related, but not identical, to the supply and demand forces influencing the market price of bitcoin. As a result of the foregoing, the price of the Shares as quoted on the Exchange has varied from the value of the Trust’s NAV per-share since the Shares were approved for quotation on January 11, 2024.

Previous wording

From January 11, 2024 to June 30, 2024, the Shares of the Trust traded at an average premium, based on closing prices at 4:00 p.m. ET, and estimated, unaudited, NAV per Share of 0.01%. During that same period, the highest premium was 1.17% on May 20, 2024, and the lowest premium was 0.01% on January 18, 2024. During that same period, the highest discount was 1.79% on May 1, 2024, and the lowest discount was 0.002% on June 25, 2024.

Current wording

From January 11, 2024 to September 30, 2024, the Shares of the Trust traded at an average discount, based on closing prices at 4:00 p.m. ET, and estimated, unaudited, NAV per-share of 0.02%. During that same period, the highest premium was 1.17% on May 20, 2024, and the lowest premium was 0.01% on January 18, 2024. During that same period, the highest discount was 1.79% on May 1, 2024, and the lowest discount was 0.002% on June 25, 2024.

Previous wording

As of June 30, 2024* the Trust held a net closing balance of 37,528.2763 bitcoin with a total market value of $2,264,087,289 based on the BRRNY price of $60,330.17, used to determine the Trust's NAV. The total market value of the Trust's bitcoin held was $2,249,899,349 based on the price of a bitcoin (Lukka Prime Rate) in the principal market (Coinbase) of $59,952.11, used to determine the Trust's Principal Market NAV.

Current wording

As of September 30, 2024,* the Trust held a net closing balance of 39,435.5408 bitcoin with a total market value of $2,500,633,274 based on the BRRNY price of $63,410.65, used to determine the Trust's NAV. The total market value of the Trust's bitcoin held was $2,502,767,131 based on the price of bitcoin (Lukka Prime Rate) in the principal market (Coinbase) of $63,464.76, used to determine the Trust's Principal Market NAV.

Previous wording

Net realized and unrealized loss on investment in bitcoin for the three months ended June 30, 2024, was approximately $398,535 which includes a realized gain of $228 on the sale of bitcoins to pay the Sponsor Fee, net realized loss on investment in bitcoin sold for redemptions of $24,202 and net change in unrealized depreciation on investment in bitcoin of approximately $374,561. Net realized and unrealized loss on investment in bitcoin for the period was driven by bitcoin price depreciation from $70,761.62 per bitcoin as of March 31, 2024 to $60,330.17 per bitcoin as of June 30, 2024. Net decrease in net assets resulting from operations was approximately $399,185 for the three months ended June 30, 2024, which consisted of the net realized and unrealized loss on investment in bitcoin of $398,535, plus the Sponsor Fee of $650. Net assets increased to approximately $2,249,658 on June 30, 2024, a 15.51% increase in NAV for the period. The increase in net assets resulted from net capital share transactions of approximately $404,590, and was reduced by the withdrawal of $650 worth of bitcoin to pay the foregoing Sponsor Fee and the aforementioned bitcoin price depreciation.

Current wording

Net realized and unrealized gain on investment in bitcoin for the three months ended September 30, 2024, was approximately $135,282 which includes a realized gain of $359 on the sale of bitcoins to pay the Sponsor Fee, net realized loss on investment in bitcoin sold for redemptions of $49,002 and net change in unrealized appreciation on investment in bitcoin of approximately $183,925. Net realized and unrealized gain on investment in bitcoin for the period was driven by bitcoin price appreciation from $60,330.17 per bitcoin as of June 30, 2024 to $63,410.65 per bitcoin as of September 30, 2024. Net increase in net assets resulting from operations was approximately $134,167 for the three months ended September 30, 2024, which consisted of the net realized and unrealized gain on investment in bitcoin of $135,282, offset by the Sponsor Fee of $1,115. Net assets increased to approximately $2,502,396 on September 30, 2024, a 5.82% increase in NAV for the period. The increase in net assets primarily resulted from the aforementioned bitcoin price appreciation, net capital share transactions of approximately $118,571, and a net increase resulting from operations of $134,167.

Previous wording

10, 2024 (commencement of operations) to $60,330.17 per bitcoin as of June 30, 2024. Net increase in net assets resulting from operations was approximately $225,626 for the six months ended June 30, 2024, which consisted of the net realized and unrealized gain on investment in bitcoin of $226,453, less the Sponsor Fee of $827. Net assets increased to approximately $2,249,658 on June 30, 2024, a 30.68% increase in NAV for the period. The increase in net assets resulted from the aforementioned bitcoin price appreciation, net capital share transactions of approximately $2,024,032, and was reduced by the withdrawal of $827 worth of bitcoin to pay the foregoing Sponsor Fee.

Current wording

Net realized and unrealized gain on investment in bitcoin for the period from January 10, 2024 to September 30, 2024, was approximately $361,735 which includes a realized gain of $593 on the sale of bitcoins to pay the Sponsor Fee, net realized loss on investment in bitcoin sold for redemptions of $73,204 and net change in unrealized appreciation on investment in bitcoin of approximately $434,346. Net realized and unrealized gain on investment in bitcoin for the period was driven by bitcoin price appreciation from $45,852.66 per bitcoin as of January 10, 2024 to $63,410.65 per bitcoin as of September 30, 2024. Net increase in net assets resulting from operations was approximately $359,793 for the period from January 10, 2024 to September 30, 2024, which consisted of the net realized and unrealized gain on investment in bitcoin of $361,735, less the Sponsor Fee of $1,942. Net assets increased to approximately $2,502,396 on September 30, 2024, a 38.28% increase in NAV for the period. The increase in net assets primarily resulted from the aforementioned bitcoin price appreciation, net capital share transactions of approximately $2,142,603, and a net increase resulting from operations of $359,793.

Previous wording

The Sponsor waived the Sponsor Fee on the first $1 billion of Trust assets through July 10, 2024, and has been accruing at an annual rate of 0.20% of the Trust’s net assets since then. As a result, the only ordinary expense of the Trust is expected to be the Sponsor Fee. In exchange for the Sponsor Fee, the Sponsor has agreed to assume and pay the normal operating expenses of the Trust, which include the Trustee’s monthly fee and out-of-pocket expenses, the fees of the Trust’s regular service providers (Cash Custodian, Bitcoin Custodian, Prime Execution Agent, Marketing Agent, Transfer Agent and Administrator), Exchange listing fees, tax reporting fees, SEC registration fees, printing and mailing costs, audit fees and up to $500,000 per annum in ordinary legal fees and expenses. The Sponsor may determine in its sole discretion to assume legal fees and expenses of the Trust in excess of the $500,000 per annum. The Sponsor also agreed to pay the costs of the Trust’s organization.

Current wording

The Trust agreed to pay the unitary Sponsor Fee of 0.20% per annum of the Trust’s bitcoin holdings. The Sponsor contractually waived the Sponsor Fee on the first $1 billion of Trust assets through July 10, 2024, and has been accruing at an annual rate of 0.20% of the Trust’s net assets since then. As a result, the only ordinary expense of the Trust is expected to be the Sponsor Fee. In exchange for the Sponsor Fee, the Sponsor has agreed to assume and pay the normal operating expenses of the Trust, which include the Trustee’s monthly fee and out-of-pocket expenses, the fees of the Trust’s regular service providers (Cash Custodian, Bitcoin Custodian, Prime Execution Agent, Marketing Agent, Transfer Agent and Administrator), exchange listing fees, tax reporting fees, SEC registration fees, printing and mailing costs, audit fees and up to $500,000 per annum in ordinary legal fees and expenses. The Sponsor may determine in its sole discretion to assume legal fees and expenses of the Trust in excess of $500,000 per annum. The Sponsor also agreed to pay the costs of the Trust’s organization.

Previous wording

The Trust does not hold a cash balance except in connection with the creation and redemption of Baskets or to pay expenses not assumed by the Sponsor. To pay for 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 bitcoin as necessary to pay such expenses. 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. The Sponsor expects that the Trust will have an immaterial amount of cash flow from its operations and that its cash balance will be insignificant at the end of each reporting period. The Trust’s only sources of cash are proceeds from the sale of Baskets and bitcoin. The Trust will not borrow to meet liquidity needs.

Current wording

The Trust does not hold a cash balance except in connection with the creation and redemption of Baskets (blocks of 10,000 Shares) or to pay expenses not assumed by the Sponsor. To pay for 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 bitcoin as necessary to pay such expenses. The cash proceeds of the sale will be sent to the Sponsor to pay the expenses. Any remaining cash will be distributed back to the Cash Custodian. The Sponsor expects that the Trust will have an immaterial amount of cash flow from its operations and that its cash balance will be insignificant at the end of each reporting period. The Trust’s only sources of cash are proceeds from the sale of Baskets and bitcoin. The Trust will not borrow to meet liquidity needs.

Previous wording

No material changes have occurred during the six months ended June 30, 2024.

Current wording

No material changes have occurred during the period ended September 30, 2024.

Previous wording

The Trust’s periodic financial statements are prepared in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 820, “Fair Value Measurements and Disclosures” (“ASC Topic 820”) and utilize an exchange-traded price from the Trust’s principal market for bitcoin on the Trust’s financial statement measurement date. The Sponsor determines in its sole discretion the valuation sources and policies used to prepare the Trust’s financial statements in accordance with U.S. GAAP. The Trust intends to engage a third-party vendor to obtain a price from a principal market for bitcoin, which will be either the market the Trust normally transacts in for bitcoin or, if the Trust does not normally transact in any market or such market suffers an operational interruption and is unavailable, determined and designated by such third-party vendor daily based on its consideration of several exchange characteristics, including oversight, and the volume and frequency of trades. Under U.S. GAAP, such a price is expected to be deemed a Level 1 input in accordance with the ASC Topic 820 because it is expected to be a quoted price in active markets for identical assets or liabilities.

Current wording

The Trust’s periodic financial statements are prepared in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 820, “Fair Value Measurements and Disclosures” (“ASC Topic 820”) and utilize an exchange-traded price from the Trust’s principal market for bitcoin on the Trust’s financial statement measurement date. The Sponsor determines in its sole discretion the valuation sources and policies used to prepare the Trust’s financial statements in accordance with U.S. GAAP. The Trust has engaged a third-party vendor to obtain a price from a principal market for bitcoin, which will be either the market the Trust normally transacts in for bitcoin or, if the Trust does not normally transact in any market or such market suffers an operational interruption and is unavailable, determined and designated by such third-party vendor daily based on its consideration of several exchange characteristics, including oversight, and the volume and frequency of trades. Under U.S. GAAP, such a price is expected to be deemed a Level 1 input in accordance with the ASC Topic 820 because it is expected to be a quoted price in active markets for identical assets or liabilities.