Grayscale Bitcoin Trust ETF

Previous wording

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, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The following discussion may contain forward-looking statements based on assumptions we believe to be reasonable. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those set forth under “Part II, Item 1A. Risk Factors” in this Quarterly Report or in “Part I, Item 1A. Risk Factors” and “Forward-Looking Statements” or other sections of our Annual Report.

Current wording

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 Report, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Unless otherwise stated, the terms “we,” “our” and “us” in this Report refer to Grayscale Investments Sponsors, LLC (the “Sponsor”) acting on behalf of 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 Report that address activities, events or developments that will or may occur in the future, including such matters as changes in prices and market conditions (for Bitcoin and the Shares), the operations of the Trust, the plans of 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. These statements are based upon certain assumptions and analyses made by the Sponsor on the basis of its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor’s expectations and predictions is subject to a number of risks and uncertainties, including the special considerations discussed in this Report, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments. Consequently, all the forward-looking statements made in this Report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments the Sponsor anticipates will be realized or, even if substantially realized, will result in the expected consequences to, or have the expected effects on, the Trust’s operations or the value of the Shares issued by the Trust. Moreover, neither the Sponsor nor any other person assumes responsibility for the accuracy or completeness of the forward-looking statements. Neither the Trust nor the Sponsor undertakes an obligation to publicly update or conform to actual results any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Previous wording

The Trust is a passive entity that is managed and administered by the Sponsor and does not have any officers, directors or employees. The Trust holds Bitcoin and, from time to time on a periodic basis, issues Creation Baskets in exchange for deposits of Bitcoin. On January 10, 2024, in connection with the approval of application under Rule 19b-4 of the Securities Exchange Act of 1934 and the effectiveness of the registration statement on Form S-3, the Sponsor authorized the commencement of a redemption program. Shares of the Trust began trading on NYSE Arca on January 11, 2024, following the effectiveness of the Trust’s registration statement on Form S-3. The Trust issues Shares only in one or more blocks of 10,000 Shares (a block of 10,000 Shares is called a “Basket”) to certain Authorized Participants from time to time. Baskets are offered in exchange for Bitcoin. Through its redemption program, the Trust redeems Shares from Authorized Participants on an ongoing basis. As a passive investment vehicle, the Trust’s investment objective is for the value of the Shares (based on Bitcoin per Share) to reflect the value of the Bitcoin held by the Trust, determined by reference to the Index Price, less the Trust’s expenses and other liabilities. While an investment in the Shares is not a direct investment in Bitcoin, the Shares are designed to provide investors with a cost-effective and convenient way to gain investment exposure to Bitcoin. The Trust is not managed like a business corporation or an active investment vehicle. The Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective.

Current wording

The Trust is a passive entity that is managed and administered by the Sponsor and does not have any officers, directors or employees. The Trust holds Bitcoin, a type of digital asset based on an open-source cryptographic protocol, and, from time to time issues blocks of 10,000 common units of fractional undivided beneficial interest in, and ownership of, the Trust (each such unit, a “Share,” and collectively, the “Shares”; each such block, a “Basket”) to certain eligible financial institutions that are registered broker-dealers, have entered into agreements with the Trust and the Sponsor concerning the creation and redemption of Shares, and each own a digital wallet address that is known to the Custodian as belonging to the financial institution or a Liquidity Provider (each, an “Authorized Participant”) in exchange for deposits of Bitcoin. On January 10, 2024, in connection with the approval of application under Rule 19b-4 of the Securities Exchange Act of 1934 and the effectiveness of the registration statement on Form S-3, the Sponsor authorized the commencement of a redemption program. Shares of the Trust began trading on NYSE Arca, Inc. (“NYSE Arca”) on January 11, 2024, following the effectiveness of the Trust’s registration statement on Form S-3. Through its redemption program, the Trust redeems Shares from Authorized Participants on an ongoing basis. As a passive investment vehicle, the Trust’s investment objective is for the value of the Shares (based on Bitcoin per Share) to reflect the value of the Bitcoin held by the Trust, determined by reference to the U.S. dollar value of a Bitcoin derived from the digital asset trading platforms reflected in the CoinDesk Bitcoin Benchmark Rate (the “Index”), calculated at 4:00 p.m., New York time, on each business day (the “Index Price”), less the Trust’s expenses and other liabilities. While an investment in the Shares is not a direct investment in Bitcoin, the Shares are designed to provide investors with a cost-effective and convenient way to gain investment exposure to Bitcoin. The Trust is not managed like a business corporation or an active investment vehicle. The Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective.

Previous wording

Prior to April 1, 2026, the Trust valued the Bitcoin held by the Trust for operational purposes by reference to the CoinDesk Bitcoin Price Index (XBX). As of April 1, 2026, the Index is the CoinDesk Bitcoin Benchmark Rate which is used to calculate the NAV and NAV per Share. Prior to April 1, 2026, references to the “Index” in the Trust’s filings with the SEC, including this Quarterly Report on Form 10-Q, refer to the CoinDesk Bitcoin Price Index (XBX). From and after April 1, 2026, references to the “Index” in the Trust’s filings with the SEC are to the CoinDesk Bitcoin Benchmark Rate.

Current wording

Prior to April 1, 2026, the Trust valued the Bitcoin held by the Trust for operational purposes by reference to the CoinDesk Bitcoin Price Index (XBX), which constituted the Index. From and after April 1, 2026, the Index is the CoinDesk Bitcoin Benchmark Rate which is used to calculate the Trust’s non-GAAP net asset value (“NAV”) and NAV per Share. NAV is the aggregate value, expressed in U.S. dollars, of the Trust’s assets (other than U.S. dollars or other fiat currency), less its liabilities (which include estimated accrued but unpaid fees and expenses); NAV per Share is NAV divided by the number of Shares outstanding. Prior to April 1, 2026, references to the “Index” in the Trust’s filings with the SEC, including this Report on Form 10-Q, refer to the CoinDesk Bitcoin Price Index (XBX). From and after April 1, 2026, references to the “Index” in the Trust’s filings with the SEC are to the CoinDesk Bitcoin Benchmark Rate.

Previous wording

The Trust considers investment transactions to be the receipt of Bitcoin by the Trust in connection with Share creations and the delivery of Bitcoin by the Trust in connection with Share redemptions or for payment of expenses in Bitcoin. The Trust records its investment transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation or depreciation on investments. Realized gains and losses are calculated using the specific identification method. Realized gains and losses are recognized in connection with transactions including settling obligations for the Sponsor’s Fee in Bitcoin.

Current wording

The Trust considers investment transactions to be the receipt of Bitcoin by the Trust in connection with Share creations and the delivery of Bitcoin by the Trust in connection with Share redemptions or for payment of expenses in Bitcoin. The Trust records its investment transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation or depreciation on investments. Realized gains and losses are calculated using the specific identification method. Realized gains and losses are recognized in connection with transactions including transfers of Bitcoin to satisfy the Trust’s obligation to pay the Sponsor a fee that accrues daily in U.S. dollars at an annual rate of 1.5% of the aggregate value of the Trust’s assets, less its liabilities, as calculated and published by the Sponsor, and is payable in Bitcoin daily in arrears (the “Sponsor’s Fee”).

Previous wording

The Trust only receives Bitcoin in connection with a creation order from the Authorized Participant (or a Liquidity Provider) and does not itself transact on any Digital Asset Markets. Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets. The Authorized Participant(s), or a Liquidity Provider, may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets (referred to as “Trading Platform Markets” in this Quarterly Report), each as defined in the FASB ASC Master Glossary (collectively, “Digital Asset Markets”). In determining which of the eligible Digital Asset Markets is the Trust’s principal market, the Trust reviews these criteria in the following order:

Current wording

The Trust receives Bitcoin only in connection with a creation order from an Authorized Participant or an unaffiliated service provider that facilitates the purchase or sale of Bitcoin in connection with creations or redemptions of Baskets (a “Liquidity Provider”) and does not itself transact on any Digital Asset Markets. Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets. Authorized Participants and Liquidity Providers may transact in Digital Asset Markets.

Previous wording

Financial Highlights for the Three and Six Months Ended June 30, 2026 and 2025

Current wording

Financial Highlights for the Three and Nine Months Ended September 30, 2026 and 2025

Previous wording

Net assets in the above table and subsequent paragraphs are calculated in accordance with U.S. GAAP based on the Digital Asset Market price of Bitcoin on the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date.

Current wording

Net assets in the above table and subsequent paragraphs are calculated in accordance with U.S. GAAP based on the Digital Asset Market price of Bitcoin onan electronic marketplace where participants may trade, buy and sell Bitcoin based on bid-ask trading (a “Digital Asset Trading Platform”) that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date.

Previous wording

Net realized and unrealized gain on investment in Bitcoin for the three months ended June 30, 2025 was $4,789,536, which includes a realized gain of $58,324 on the transfer of Bitcoin to pay the Sponsor’s Fee, a realized gain of $743,166 on the sale of Bitcoin to meet redemptions, and net change in unrealized appreciation/depreciation on investment in Bitcoin of $3,988,046. Net realized and unrealized gain on investment in Bitcoin for the period was driven by Bitcoin price appreciation from $82,443.85 per Bitcoin as of March 31, 2025, to $107,753.95 per Bitcoin as of June 30, 2025. Net increase in net assets resulting from operations was $4,720,199 for the three months ended June 30, 2025, which consisted of thenet realized and unrealized gain on investment in Bitcoin, less the Sponsor’s Fee of $69,337. Net assets increased to $19,945,117 at June 30, 2025, a 25% increase for thethree-month period. The increase in net assets resulted from the aforementioned Bitcoin price appreciation and the contribution of approximately 1,745 Bitcoin with a value of $165,628 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 704 Bitcoin to pay the foregoing Sponsor’s Fee, and the redemption of approximately 9,384 Bitcoin with a value of $888,832 from the Trust.

Current wording

Net realized and unrealized gain for the three months ended September 30, 2025 was $1,233,506, which includes a realized gain of $66,893 on the transfer of Bitcoin to pay expenses, a realized gain of $890,918 on the sale of Bitcoin to meet redemptions, and net change in unrealized appreciation/depreciation of $275,695. Net realized and unrealized gain for the period was driven by Bitcoin price appreciation from $107,753.95 per Bitcoin as of June 30, 2025, to $114,401.99 per Bitcoin as of September 30, 2025. Net increase in net assets resulting from operations was $1,155,547 for the three months ended September 30, 2025, which consisted of thenet realized and unrealized gain, and the net investment loss of ($77,959). Net assets increased to $20,199,306 at September 30, 2025, a 1% increase for thethree-month period. The increase in net assets resulted from the aforementioned Bitcoin price appreciation and the contribution of approximately 1,187 Bitcoin with a value of $135,529 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 682 Bitcoin to pay the foregoing Sponsor’s Fee, and the redemption of approximately 9,040 Bitcoin with a value of $1,036,887 from the Trust.

Previous wording

Net realized and unrealized loss on investment in Bitcoin for the six months ended June 30, 2026 was ($4,354,009), which includes a realized gain of $64,069 on the transfer of Bitcoin to pay the Sponsor’s Fee, a realized gain of $1,655,616 on the sale of Bitcoin to meet redemptions, and net change in unrealized appreciation/depreciation on investment in Bitcoin of ($6,073,694). Net realized and unrealized loss on investment in Bitcoin for the period was driven by Bitcoin price depreciation from $87,549.41 per Bitcoin as of December 31, 2025, to $58,745.18 per Bitcoin as of June 30, 2026. Net decrease in net assets resulting from operations was ($4,438,686) for the six months ended June 30, 2026, which consisted of the net realized and unrealized loss on investment in Bitcoin, plus the Sponsor’s Fee of $84,677. Net assets decreased to $8,136,546 at June 30, 2026, a 44% decrease for the six-month period. The decrease in net assets resulted from the aforementioned Bitcoin price depreciation, the withdrawal of approximately 1,140 Bitcoin to pay the foregoing Sponsor’s Fee, and the redemption of approximately 29,461 Bitcoin with a value of $2,185,553 from the Trust, partially offset by thecontribution of approximately 3,515 Bitcoin with a value of $263,348 to the Trust in connection with Share creations during the period.

Current wording

Net realized and unrealized loss for the nine months ended September 30, 2026 was ($1,088,503), which includes a realized gain of $90,154 on the transfer of Bitcoin to pay expenses, a realized gain of $2,238,164 on the sale of Bitcoin to meet redemptions, and net change in unrealized appreciation/depreciation of ($3,416,821). Net realized and unrealized loss for the period was driven by Bitcoin price depreciation from $87,549.41 per Bitcoin as of December 31, 2025, to $83,550.15 per Bitcoin as of September 30, 2026. Net decrease in net assets resulting from operations was ($1,208,503) for the nine months ended September 30, 2026, which consisted of the net realized and unrealized loss, and the net investment loss of ($120,000). Net assets decreased to $10,609,862 at September 30, 2026, a 27% decrease for the nine-month period. The decrease in net assets resulted from the aforementioned Bitcoin price depreciation, the withdrawal of approximately 1,638 Bitcoin to pay the foregoing Sponsor’s Fee, and the redemption of approximately 41,046 Bitcoin with a value of $2,982,639 from the Trust, partially offset by thecontribution of approximately 4,080 Bitcoin with a value of $303,567 to the Trust in connection with Share creations during the period.

Previous wording

Net realized and unrealized gain on investment in Bitcoin for the six months ended June 30, 2025 was $2,658,964, which includes a realized gain of $116,205 on the transfer of Bitcoin to pay the Sponsor’s Fee, a realized gain of $1,773,097 on the sale of Bitcoin to meet redemptions, and net change in unrealized appreciation/depreciation on investment in Bitcoin of $769,662. Net realized and unrealized gain on investment in Bitcoin for the period was driven by Bitcoin price appreciation from $93,390.22 per Bitcoin as of December 31, 2024, to $107,753.95 per Bitcoin as of June 30, 2025. Net increase in net assets resulting from operations was $2,520,688 for the six months ended June 30, 2025, which consisted of thenet realized and unrealized gain on investment in Bitcoin, less the Sponsor’s Fee of $138,276. Net assets increased to $19,945,117 at June 30, 2025, a 4% increase for the six-month period. The increase in net assets resulted from the aforementioned Bitcoin price appreciation and the contribution of approximately 3,710 Bitcoin with a value of $358,198 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 1,441 Bitcoin to pay the foregoing Sponsor’s Fee, and the redemption of approximately 22,569 Bitcoin with a value of $2,116,013 from the Trust.

Current wording

Net realized and unrealized gain for the nine months ended September 30, 2025 was $3,892,470, which includes a realized gain of $183,098 on the transfer of Bitcoin to pay expenses, a realized gain of $2,664,015 on the sale of Bitcoin to meet redemptions, and net change in unrealized appreciation/depreciation of $1,045,357. Net realized and unrealized gain for the period was driven by Bitcoin price appreciation from $93,390.22 per Bitcoin as of December 31, 2024, to $114,401.99 per Bitcoin as of September 30, 2025. Net increase in net assets resulting from operations was $3,676,235 for the nine months ended September 30, 2025, which consisted of thenet realized and unrealized gain, and the net investment loss of ($216,235). Net assets increased to $20,199,306 at September 30, 2025, a 5% increase for the nine-month period. The increase in net assets resulted from the aforementioned Bitcoin price appreciation and the contribution of approximately 4,897 Bitcoin with a value of $493,727 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 2,123 Bitcoin to pay the foregoing Sponsor’s Fee, and the redemption of approximately 31,609 Bitcoin with a value of $3,152,900 from the Trust.

Previous wording

The Trust only receives and holds cash in order to facilitate creations and redemptions pursuant to Cash Orders, and has not otherwise had or maintained a cash balance at any time since inception. When selling Bitcoin in the Digital Asset Market to pay Additional Trust Expenses on behalf of the Trust, the Sponsor endeavors to sell the exact amount of Bitcoin needed to pay expenses in order to minimize the Trust’s holdings of assets other than Bitcoin. In addition, upon the consummation or deemed failure of a Cash Order to create or redeem Baskets, the Trust will promptly return any excess cash it continues to hold with respect to such Cash Order to the applicable counterparty. As a consequence, the Sponsor expects that the Trust will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period. Furthermore, the Trust is not a party to any off-balance sheet arrangements.

Current wording

The Trust only receives and holds cash in order to facilitate creation or redemption orders effected through cash transactions (“Cash Orders”) and has not otherwise had or maintained a cash balance at any time since inception. When selling Bitcoin in the Digital Asset Market on behalf of the Trust to pay expenses incurred by the Trust in addition to the Sponsor’s Fee that the Sponsor is not obligated to assume, the Sponsor endeavors to sell the exact amount of Bitcoin needed to pay expenses in order to minimize the Trust’s holdings of assets other than Bitcoin. In addition, upon the consummation or deemed failure of a Cash Order to create or redeem Baskets, the Trust will promptly return any excess cash it continues to hold with respect to such Cash Order to the applicable counterparty. As a consequence, the Sponsor expects that the Trust will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period. Furthermore, the Trust is not a party to any off-balance sheet arrangements.

Previous wording

In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the periods covered by this Quarterly Report was the Sponsor’s 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.

Current wording

In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the periods covered by this Report was the Sponsor’s 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.

Previous wording

The Trust’s NAV and NAV per Share are derived from the Index Price as represented by the Index as of 4:00 p.m., New York time, on the valuation date. The Trust’s NAV per Share is calculated using a non-GAAP methodology where the price is derived from multiple Digital Asset Trading Platforms. The Digital Asset Trading Platforms included in the Index (the “Constituent Trading Platforms”) as of June 30, 2026 were Binance, Bitstamp by Robinhood, Bullish, Bybit, Crypto.com, Gate, Gemini, HashKey, Kraken, LMAX Digital, OKX, and OSL. The Digital Asset Trading Platforms included in the Index as of June 30, 2025 were Coinbase, Bitstamp by Robinhood, Kraken, LMAX Digital, Crypto.com, Bitfinex and Bullish. See “Item 1. Business—Overview of the Bitcoin Industry and Market—Bitcoin Value—The Index and the Index Price” in our Annual Report for a description of the Index and the Index Price.

Current wording

The Trust’s NAV and NAV per Share are derived from the Index Price as represented by the Index as of 4:00 p.m., New York time, on the valuation date. The Trust’s NAV per Share is calculated using a non-GAAP methodology where the price is derived from multiple Digital Asset Trading Platforms. The Digital Asset Trading Platforms included in the Index (the “Constituent Trading Platforms”) as of September 30, 2026 were Binance, Bitstamp by Robinhood, Bullish, Bybit, Crypto.com, Gate, Gemini, HashKey, Kraken, LMAX Digital, OKX, and OSL. The Digital Asset Trading Platforms included in the Index as of September 30, 2025 were Bitfinex, Bitstamp by Robinhood, Bullish, Coinbase, Crypto.com, Kraken, and LMAX Digital. See “Item 1. Business—Overview of the Bitcoin Industry and Market—Bitcoin Value—The Index and the Index Price” in our Annual Report for a description of the Index and the Index Price.

Previous wording

The Trust’s performance prior to January 11, 2024 is based on market-determined prices on OTC Markets and on the Trust’s performance without an ongoing share creation and redemption program. Prior to January 11, 2024, the Trust’s Shares traded at both premiums and discounts to the value of the Trust’s assets, less its expenses and other liabilities, which at times were substantial, in part due to the lack of an ongoing redemption program. Effective as of January 11, 2024, the Trust established an ongoing share creation and redemption program and the Shares of the Trust were listed to NYSE Arca. Hence, the Trust’s performance for periods prior to January 11, 2024 is not directly comparable to, and should not be used to make conclusions in conjunction with, the Trust’s performance for periods subsequent to January 11, 2024.

Current wording

The Trust’s performance prior to January 11, 2024 is based on market-determined prices on the applicable marketplace operated by OTC Markets Group Inc. (“OTC Markets”) and on the Trust’s performance without an ongoing share creation and redemption program. Prior to January 11, 2024, the Trust’s Shares traded at both premiums and discounts to the value of the Trust’s assets, less its expenses and other liabilities, which at times were substantial, in part due to the lack of an ongoing redemption program. Effective as of January 11, 2024, the Trust established an ongoing share creation and redemption program and the Shares of the Trust were listed to