# Bitwise Bitcoin ETF: Form 10-Q for the period ended Mar 31, 2024

- Company: [Bitwise Bitcoin ETF](/companies/bitb.md) (CIK 1763415)
- Form: 10-Q
- Filed: 2024-05-13
- Accepted by EDGAR: May 13, 2024, 15:58 ET
- Period: 2024-03-31
- Accession: 0000950170-24-058601
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1763415/000095017024058601/bitb-20240331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1763415/000095017024058601/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Income tax | 3 months, 2024-01-01 to 2024-03-31 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-01-10 to 2024-03-31 | $624.8m | us-gaap:NetIncomeLoss |
| Operating cash flow | 3 months, 2024-01-10 to 2024-03-31 | −$1.62bn | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Share repurchases | 3 months, 2024-01-10 to 2024-03-31 | $2.2m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-03-31 | $0 | us-gaap:Cash |
| Total assets | at 2024-03-31 | $2.31bn | us-gaap:Assets |
| Total liabilities | at 2024-03-31 | $67.4m | us-gaap:Liabilities |

## Management's discussion and analysis

As filed, 8,615 characters.

*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.*

### Trust Overview

The business and operations of the Trust are described above under Part I, Item I under the heading “Business”, which is incorporated into this Item by reference.

The Shares may also 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 Portfolio Crypto Assets on behalf of the Trust due to fraud, failure, security breaches or otherwise. As a result of the foregoing, the price of the Shares as quoted on NYSE has varied from the value of the Trust’s Portfolio Crypto Assets Per Share since the Shares were approved for quotation on January 11, 2024.

The following charts show the percentage of Premium/(Discount) of the Shares as quoted on NYSE and the Trust’s NAV and a comparison of the NAV of the Trust vs the market price as quoted on NYSE.

From January 11, 2024 to March 31, 2024, the Shares of BITB traded at an average premium, based on closing prices at 4:00 pm ET, and estimated, unaudited, NAV Per Share of 0.01%. During that same period, the highest premium was 0.87% on March 1, 2024, and the lowest premium was 0.01% on January 18, 2024. During that same period, the highest discount was 0.84% on March 15, 2024, and the lowest discount was 0.01% on February 29, 2024.

The following chart shows the price of bitcoin for the period January 1, 2023 through March 31, 2024, as quoted by CF Benchmarks, using the CME CF Bitcoin Reference Rate - New York Variant (BRRNY).

### Results of Operations

As of March 31, 2024\* the Trust held a net closing balance of 31,682.4133 bitcoin with a total market value of $2,241,898,895 based on the CME CF Bitcoin Reference Rate - New York Variant ("BRRNY") price of $70,761.62, used to determine the Trust's NAV. The total market value of the Trust's bitcoin held was $2,244,412,895 based on the price of a bitcoin in the principal market (Lukka Prime Rate) of $70,840.97, used to determine the Trust's Principal Market NAV.

\* No comparative period presented as the Trust commenced operations on January 10, 2024.

#### For the Three Months Ended March 31, 2024\*^

Net realized and unrealized gain on investment in bitcoin for the three months ended March 31, 2024, was approximately $624,988 which includes a realized gain of $6 on the sale of bitcoins to pay the Sponsor’s Fee and net change in unrealized appreciation on investment in bitcoin of approximately $624,982. 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 (commencement of operations) to $70,761.62 per bitcoin as of March 31, 2024. Net increase in net assets resulting from operations was approximately $624,811 for the three months ended March 31, 2024, which consisted of the net realized and unrealized gain on investment in bitcoin, less the Sponsor’s Fee of $177. Net assets increased to approximately $2,244,253 on March 31, 2024, a 54.48% increase in NAV for the period. The increase in net assets resulted from the aforementioned bitcoin price appreciation, net capital transactions of approximately $1,619,442, and was reduced by the withdrawal of $177 worth of bitcoin to pay the foregoing Sponsor’s Fee.

\* No comparative period presented as the Trust commenced operations on January 10, 2024.

^ Amounts displayed are in the '000s, except for per share/coin references

### Liquidity and Capital Resources

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.

In exchange for the Sponsor Fee, the Sponsor has agreed to assume and pay the normal operating expenses of the Trust. The Sponsor contractually waived the Sponsor Fee until July 11, 2024, and will of accrue at an annual rate of 0.20% of the Trust’s net assets beginning thereafter. As a result, the only ordinary expense of the Trust is expected to be the Sponsor 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. See Part I, Item I under the heading “Business – Fees and Expenses” for an additional discussion of the Trust’s fees and expenses.

### Off-Balance Sheet Arrangements and Contractual Obligations

As of December 31, 2023, 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 have 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 a Trust’s financial position.

Sponsor 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.

### Critical Accounting Policies

#### Principal Market and Fair Value Determination

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.

#### Investment Company Considerations

The Trust is an investment company for U.S. GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services – Investment Companies. The Trust uses fair value as its method of accounting for bitcoin in accordance with its classification as an investment company for accounting purposes. The Trust is not a registered investment company under the Investment Company Act of 1940. U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and these differences could be material.

## Controls and procedures

As filed, 1,705 characters.

### 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 Officer of the Sponsor to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of the Principal Executive Officer and the Principal Financial Officer of the Sponsor, the Sponsor conducted an evaluation of the Trusts 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 Officer of the Sponsor concluded that, as of March 31, 2024, the Trust’s disclosure controls and procedures were effective.

### Management’s Annual Report on Internal Control over Financial Reporting

This Quarterly Report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the company's registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly formed public companies.

### Changes in Internal Control over Financial Reporting

There were no changes in the Trust’s internal control over financial reporting that occurred during the period ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Trust’s internal control over financial reporting.

Filed May 13, 2024.
Source: SEC EDGAR, the filing index for accession 0000950170-24-058601. Last ingested by Listed: Oct 24, 2026, 15:15 ET. No prices; not investment advice.