Bitwise 10 Crypto Index ETF

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.

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.

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.