WisdomTree Bitcoin Fund

Previous wording

The Trust is an exchange-traded fund that issues Shares that are traded on the Exchange. The Trust’s investment objective is to gain exposure to the price of bitcoin as represented by the Reference Rate, less expenses and liabilities of the Trust’s operations. In seeking to achieve its investment objective, the Trust holds bitcoin and values its Shares daily based on the Reference Rate, which is based on an aggregation of executed trade flow of major bitcoin platforms.

Current wording

The Trust is an exchange-traded fund that issues Shares that are traded on the Cboe BZX Exchange, Inc. (the “Exchange”). The Trust’s investment objective is to gain exposure to the price of bitcoin as represented by the CME CF Bitcoin Reference Rate – New York Variant (the “Reference Rate”), less expenses and liabilities of the Trust’s operations. In seeking to achieve its investment objective, the Trust holds bitcoin and values its Shares daily based on the Reference Rate, which is based on an aggregation of executed trade flow of major bitcoin platforms. On January 11, 2024, the Shares commenced trading on the Exchange under the ticker symbol “BTCW”.

Previous wording

The following discussion and analysis was prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the Trust’s financial condition as of March 31, 2024, and its results of operations for the period ended March 31, 2024. It should be read in conjunction with the unaudited financial statements and related notes thereto contained in this Quarterly Report.

Current wording

The following discussion and analysis was prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the Trust’s financial condition as of June 30, 2024 and its results of operations for the three and six months ended June 30, 2024. It should be read in conjunction with the unaudited financial statements and related notes thereto contained in this Quarterly Report.

Previous wording

The Trust’s investment in bitcoin is recorded on the financial statements at fair value in accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”). Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for the asset for liability. ASC 820 defines “principal market” as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity. ASC 820 defines “most advantageous market” as the market that maximizes the amount that would be received to sell the asset or minimizes the amount that would be paid to transfer the liability, after taking into account transaction costs and transportation costs. Based on the foregoing, the Trust has determined its principal market for GAAP reporting for its bitcoin investment to be the cryptocurrency exchange platform operated by Coinbase, Inc. and utilizes an exchange-traded price from that principal market as of 11:59:59 p.m. Eastern Time on the financial statement measurement date. The Sponsor will perform other procedures (consistent with GAAP) to value an investment in bitcoin when a market quote is not available.

Current wording

The Trust’s investment in bitcoin is recorded on the financial statements at fair value in accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”). Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for the asset for liability. ASC 820 defines “principal market” as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity. ASC 820 defines “most advantageous market” as the market that maximizes the amount that would be received to sell the asset or minimizes the amount that would be paid to transfer the liability, after taking into account transaction costs and transportation costs. Based on the foregoing, the Trust has determined its principal market for GAAP reporting for its bitcoin investment to be the bitcoin platform operated by Coinbase, Inc. and utilizes an exchange-traded price from that principal market as of 11:59:59 p.m. Eastern Standard Time on the financial statement measurement date. The Sponsor will perform other procedures (consistent with GAAP) to value an investment in bitcoin when a market quote is not available.

Previous wording

Selected Financial Highlights for the period January 11, 2024 through March 31, 2024

Current wording

Selected Financial Highlights for the Three- and Six-Month period ended June 30, 2024

Previous wording

Net realized and unrealized gain on investment in bitcoin for the three months ended March 31, 2024 was $18,463,897 which includes a net change in unrealized appreciation on investment in bitcoin of $17,462,047. Net realized and unrealized gain on investment in bitcoin for the period was driven by bitcoin price appreciation from $46,411.68 per bitcoin as of January 10, 2024 (the end of day price prior to the commencement of operations) to $70,596.99 per bitcoin as of March 31, 2024. Net increase in net assets resulting from operations was $18,463,897 for the three months ended March 31, 2024, which consisted of the net realized and unrealized gain on investment in bitcoin. Net assets increased to $80,984,159 at March 31, 2024, and total return (based on NAV per Share) for the period was 49.98%. The increase in net assets resulted from the aforementioned bitcoin price appreciation and by $62,470,262 of net increase resulting from capital share transactions.

Current wording

Net realized and unrealized gain on investment in bitcoin for the six months ended June 30, 2024 was $8,415,937 (-$10,047,960 for the three months ended June 30, 2024) which, for the six months ended June 30, 2024, includes a net change in unrealized appreciation on investment in bitcoin of $7,245,671 (-$10,216,376 for the three months ended June 30, 2024). Decrease in net realized and unrealized gain on investment in bitcoin for the three-month period ended June 30, 2024 was driven by bitcoin price depreciation from $70,596.99 per bitcoin as of March 31, 2024 to $63,369.30 per bitcoin as of June 30, 2024. Increase in net realized and unrealized gain on investment in bitcoin for the six-month period ended June 30, 2024 was driven by bitcoin price appreciation from $46,411.68 per bitcoin as of January 10, 2024 (the end of day price prior to the commencement of operations) to $63,369.30 per bitcoin as of June 30, 2024. Net decrease in net assets resulting from operations was -$10,047,960 for the three months ended June 30, 2024 which consisted of net realized gains of $168,416 which was offset by a -$10,216,376 net decrease in unrealized appreciation on investment in bitcoin. Net increase in net assets resulting from operations was $8,415,937 for the six months ended June 30, 2024 which consisted of net realized gains of $1,170,266 and a $7,245,671 net increase in unrealized appreciation on investment in bitcoin. Net assets increased to $81,776,494 at June 30, 2024 and total return (based on NAV per Share) for the six-month period was 34.62% (-10.24% for the three months ended June 30, 2024). For the three months ended June 30, 2024, the $792,335 net increase in net assets resulted from the aforementioned bitcoin price depreciation which was offset by $10,840,295 of net increase resulting from capital share transactions. For the six months ended June 30, 2024, the $81,726,494 net increase in net assets resulted from the aforementioned bitcoin price appreciation and by $73,310,557 of net increase resulting from capital share transactions.

Previous wording

The methodology of the Reference Rate used to value bitcoin for purposes of calculating NAV per Share may not be deemed consistent with GAAP. To the extent the methodology used to calculate the Reference Rate is deemed not to be consistent with GAAP, the Trust will utilize an alternative GAAP-consistent pricing source for purposes of the Trust’s periodic financial statements, as further discussed below.

Current wording

The methodology of the Reference Rate used to value bitcoin for purposes of calculating NAV per Share may not be deemed consistent with GAAP and may be different from the value of bitcoin used in the Trust’s GAAP financial statements. To the extent the methodology used to calculate the Reference Rate is deemed not to be consistent with GAAP, the Trust will utilize an alternative GAAP-consistent pricing source for purposes of the Trust’s periodic financial statements, as further discussed below.

Previous wording

The Trust Administrator calculates the NAV of the Trust once each Exchange trading day. The NAV for a normal trading day will be released after 4:00 p.m. EST. Trading during the core trading session on the Exchange typically closes at 4:00 p.m. EST. However, NAVs are not officially struck until later in the day (often by 5:30 p.m. EST and almost always by 8:00 p.m. EST).

Current wording

The Trust Administrator calculates the NAV of the Trust once each Exchange trading day. The NAV for a normal trading day will be released after 4:00 p.m. Eastern Standard Time. Trading during the core trading session on the Exchange typically closes at 4:00 p.m. Eastern Standard Time. However, NAVs are not officially struck until later in the day (often by 5:30 p.m. Eastern Standard Time and almost always by 8:00 p.m. Eastern Standard Time).

Previous wording

As of March 28, 2024, the Trust had a net closing balance of 1,147.085551 bitcoins with a value of $81,169,632 based on the Reference Rate Price of $70,761.62, which is calculated pursuant to non-GAAP methodology. As of March 31, 2024, the total market value of the Trust’s bitcoin was $80,980,787, based on the price of a bitcoin in the principal market of$70,596.99. For the three months ended March 31, 2024, the Trust determined that Coinbase was its principal market.

Current wording

As of June 28, 2024 (the last business day), the Trust had a net closing balance of 1,290.474994 bitcoins with a value of $77,854,572 based on the Reference Rate Price of $60,330.17, which is calculated pursuant to non-GAAP methodology. As of June 30, 2024, the total market value of the Trust’s bitcoin was $81,776,494, based on the price of a bitcoin in the principal market of $63,369.30. For the three- and six-month period ended June 30, 2024, the Trust determined that Coinbase was its principal market.

Previous wording

The Trust will pay the Sponsor a unified fee of 0.25% per annum of the Trust’s average daily NAV (the “Sponsor Fee”) as compensation for services performed under the Trust Agreement. The Trust’s only ordinary recurring expense is the Sponsor Fee. For the 6-month period commencing on January 11, 2024, the day the Trust’s Shares are initially listed onthe Exchange, the Sponsor will waive the entire Sponsor Fee on the first $1 billion of Trust assets.

Current wording

The Trust will pay the Sponsor a unified fee of 0.25% per annum of the Trust’s average daily NAV (the “Sponsor Fee”) as compensation for services performed under the Trust Agreement. The Trust’s only ordinary recurring expense is the Sponsor Fee. For the 6-month period commencing on January 11, 2024, the day the Trust’s Shares are initially listed onthe Exchange, the Sponsor waived the entire Sponsor Fee on the first $1.0 billion of Trust assets. Subsequent to June 30, 2024, after the close of business on July 11, 2024, the waiver expired and was not renewed.

Previous wording

Except for periods during which all or a portion of the Sponsor Fee is being waived, the Sponsor Fee will accrue and be payable in U.S. dollars. The Trust’s only ordinary recurring expense is expected to be the Sponsor Fee. In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume the marketing and the following administrative expenses of the Trust: the fees of the Trustee, the Trust Administrator, Fund Accountant, Transfer Agent, the Marketing Agent, the Cash Custodians’ Fee, Exchange listing fees, SEC registration fees, printing and mailing costs, tax reporting fees, audit fees, license fees and ordinary legal fees and expenses. The Sponsor will also pay the costs of the Trust’s organization and the initial sale of the Shares. There is no cap on the amount of these Sponsor paid expenses.

Current wording

Except for periods during which all or a portion of the Sponsor Fee is being waived, the Sponsor Fee will accrue and be payable in U.S. dollars. The Trust’s only ordinary recurring expense is expected to be the Sponsor Fee. In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume the marketing and the following administrative expenses of the Trust: the fees of the Trustee, the Trust Administrator, Fund Accountant, Transfer Agent, the Marketing Agent, the Bitcoin Custodian, the Cash Custodians’ Fee, Exchange listing fees, SEC registration fees, printing and mailing costs, tax reporting fees, audit fees, license fees and ordinary legal fees and expenses. The Sponsor will also pay the costs of the Trust’s organization and the initial sale of the Shares. There is no cap on the amount of these Sponsor paid expenses.

Previous wording

Because the Trust does not have any income, it will need to sell bitcoin to cover the Sponsor’s Fee and expenses not assumed by the Sponsor, if any. The Trust may also be subject to other liabilities (for example, as a result of litigation) that have also not been assumed by the Sponsor. The only source of funds to cover those liabilities will be sales of bitcoin held by the Trust. Even if there are no expenses other than those assumed by the Sponsor, and there are no other liabilities of the Trust, the Trust will still need to sell bitcoin to pay the Sponsors Fee. The result of these sales is a decrease in the amount of bitcoin represented by each Share.

Current wording

Because the Trust does not have any income, it will need to sell bitcoin to cover the Sponsor’s Fee and expenses not assumed by the Sponsor, if any. The Trust may also be subject to other liabilities (for example, as a result of litigation) that have also not been assumed by the Sponsor. The only source of funds to cover those liabilities will be sales of bitcoin held by the Trust. Even if there are no expenses other than those assumed by the Sponsor, and there are no other liabilities of the Trust, the Trust will still need to sell bitcoin to pay the Sponsor’s Fee.