Invesco Galaxy Bitcoin ETF: Form 10-Q for the period ended Jun 30, 2026

This information should be read in conjunction with the financial statements and notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q (the “Report”). This Report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. The matters discussed throughout this Report that are not historical facts are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative of these terms or other comparable terminology. 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 movements in the digital asset markets, operations of Invesco Galaxy Bitcoin ETF (the “Trust”), plans and references by Invesco Capital Management LLC (the “Sponsor”) 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 the Sponsor has made based on its perception of historical trends, technology developments regarding the use of bitcoin and other digital assets, including the systems used by the Sponsor and Coinbase Custody Trust Company, LLC, the Trust’s bitcoin custodian (the “Bitcoin Custodian”) in their provision of services to the Trust, current conditions and expected future developments, as well as other factors appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor’s expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations discussed in this Report, and the risks described in Part I, Item 1A. “Risk Factors” of the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and in other Securities and Exchange Commission (the “SEC”) filings by the Trust, as well as general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other 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 actual results or developments the Sponsor anticipates will be realized or, even if substantially realized, that they will result in the expected consequences to, or have the expected effects on, the Trust’s operations or the value of its Shares. None of the Trust, the Sponsor, or the Trustee or their respective affiliates is under a duty to update any of the forward-looking statements to conform such statements to actual results or to a change in the Sponsor’s expectations or predictions.

Overview/Introduction

Invesco Galaxy Bitcoin ETF (the “Trust”) is a Delaware statutory trust that was formed on April 5, 2021. The Trust continuously issues common shares representing fractional undivided beneficial interest in and ownership of the Trust (“Shares”). The Trust operates pursuant to its Second Amended and Restated Declaration of Trust and Trust Agreement, dated as of January 5, 2024 (the “Trust Agreement”). The Shares began trading on the Cboe BZX Exchange, Inc. (the “Exchange”) under the ticker symbol “BTCO” on January 11, 2024. The Trust offers Shares only to certain eligible financial institutions (“Authorized Participants”) in one or more blocks of 5,000 Shares (“Creation Baskets”) based on the quantity of bitcoin attributable to each Share of the Trust.

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, 2026, and its results of operations for the three and six months ended June 30, 2026 and 2025. It should be read in conjunction with the unaudited financial statements and related notes thereto contained in this Report.

Investment Objective

The investment objective of the Trust is for the Shares to reflect the performance of the spot price of bitcoin as measured using the Lukka Prime Bitcoin Reference Rate (the “Benchmark”) less the Trust’s expenses and other liabilities.

Determination of Net Asset Value

The Administrator calculates, and the Sponsor publishes, the Trust’s Net Asset Value (“NAV”) once each business day. To calculate the NAV, the Administrator totals the current market value of bitcoin in the Trust and any other assets, and subtracts any liabilities including accrued but unpaid expenses. The Trust’s NAV is an amount denominated in U.S. dollars.

The Administrator also determines the NAV per Share, which equals the NAV of the Trust divided by the number of outstanding Shares. The NAV of the Trust and the NAV per Share are published by the Sponsor on each day that the Exchange is open for regular trading and are posted on the Trust’s website, www.invesco.com/BTCO (http://www.invesco.com/BTCO).

Valuation of Bitcoin

In seeking to achieve its investment objective, the Trust holds bitcoin. The Trust values its Shares each Business Day as of 4:00 p.m. ET. The Trust applies FASB ASC Topic 820, Fair Value Measurement, in the valuation of bitcoin held by the Trust and for financial statement purposes. The value of bitcoin held by the Trust is determined based on the FMV price for bitcoin, reflecting the execution price of bitcoin on its principal market as determined each day by the Benchmark Provider. The FMV price for bitcoin reflects the price that would be received for bitcoin in a current sale, which assumes an orderly transaction between market participants on the measurement date of bitcoin on its “principal market,” generally, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. The Trust determines its principal market (or in the absence of a principal market the most advantageous market) on a periodic basis to determine which market is its principal market for the purpose of calculating fair value for the creation of quarterly and annual financial statements. Issuer-specific events, market trends, bid/asked quotes of brokers and information providers and other data may be reviewed in the course of making a good faith determination of an investment’s fair value. The Benchmark is designed to provide an estimated fair market value price for bitcoin, based on the execution price of bitcoin on its principal market. In this regard, the Benchmark Provider seeks to identify a “principal market” for bitcoin each day by evaluating eligible bitcoin trading platforms across a variety of different criteria, including the trading platforms’ oversight and governance frameworks, microstructure efficiency, trading volume, data transparency and data integrity.

Liquidity and Capital Resources

The Sponsor is not aware of any known trends, demands, commitments, events or uncertainties that will result in, or are reasonably likely to result in, material changes to the Trust’s liquidity and capital resources needs.

The Trust pays the Sponsor a unified fee of 0.25% per annum (the “Sponsor Fee”) as compensation for services performed under the Trust Agreement. The Trust’s only ordinary recurring expense is the Sponsor Fee.

The Sponsor Fee is accrued daily and paid monthly in arrears in U.S. dollars, and is calculated by the Administrator. The Administrator calculates the Sponsor Fee on a daily basis by applying the 0.25% annualized rate to the Trust’s total net assets.

To cover the Sponsor Fee, and extraordinary expenses not assumed by the Sponsor, the Sponsor or its delegate will cause the Trust (or its delegate) to instruct the Execution Agent to convert bitcoin held by the Trust into U.S. dollars. The NAV of the Trust and the number of bitcoins represented by a Share will decline each time the Trust accrues the Sponsor Fee or any Trust expenses not assumed by the Sponsor. The Trust is not responsible for paying any costs associated with the transfer of bitcoin to or from the Trust in connection with paying the Sponsor Fee or in connection with creation and redemption transactions.

Except as noted below, the Sponsor has agreed to pay all of the Trust’s ordinary expenses out of the Sponsor’s unified fee, including, but not limited to, the Trustee’s fees, the fees of BNYM (for its services as the Administrator, Transfer Agent, and Cash Custodian), the fees of the Bitcoin Custodian, the fees of the Execution Agent, Exchange listing fees, SEC registration fees, printing and mailing costs, legal costs and audit fees. The Sponsor also paid the costs of the Trust’s organization.

The Trust may incur certain extraordinary expenses that are not assumed by the Sponsor. These include, but are not limited to, taxes and governmental charges, any applicable brokerage commissions, financing fees, Bitcoin network fees and similar transaction fees, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of Shareholders (including, for example, in connection with any fork of the Bitcoin blockchain), any indemnification of the Sponsor, Cash Custodian, Bitcoin Custodian, Administrator or other agents, service providers or counterparties of the Trust and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters.

The Trust from time to time will be required to sell bitcoin in such quantities as necessary to permit payment of the Sponsor Fee and any Trust expenses and liabilities not assumed by the Sponsor. The Sponsor has engaged the Execution Agent to sell bitcoin on the Trust’s behalf in such circumstances. At the direction of the Trust, the Execution Agent will seek to sell bitcoin at approximately the price at which it is valued by the Trust and in the smallest amounts required to permit such payments as they become due, with the intention of minimizing the Trust’s holdings of assets other than bitcoin. Accordingly, the amount of bitcoin to be sold may vary from time to time depending on the level of the Trust’s expenses and liabilities and the market price of bitcoin.

The Trust has not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Trust’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to Shareholders.

Cash Flows

A primary cash flow activity of the Trust is to raise capital from Authorized Participants through the issuance of Shares. This cash is used to invest in bitcoin.

As of the date of this Report, each of ABN AMRO Clearing Chicago LLC, BNY Mellon Capital Markets, LLC, Citadel Securities LLC, Goldman Sachs & Co., Jane Street Capital LLC, Jefferies LLC, JP Morgan Securities Inc., Macquarie Capital (USA) Inc., Marex Capital Markets Inc., Morgan Stanley & Co. LLC and Virtu Americas LLC has executed a Participant Agreement and are the only Authorized Participants.

Operating Activities

Net cash flow provided by (used in) operating activities was $45.4 million and $224.7 million during the six months ended June 30, 2026 and 2025, respectively. During the six months ended June 30, 2026, $66.3 million was paid to purchase bitcoin and $111.7 million was received from sales of bitcoin for redemptions. During the six months ended June 30, 2025, $89.0 million was paid to purchase bitcoin and $313.8 million was received from sales of bitcoin for redemptions.

Financing Activities

The Trust’s net cash flow provided by (used in) financing activities was $(45.4) million and $(224.7) million during the six months ended June 30, 2026 and 2025, respectively. This included $66.3 million and $89.0 million from Shares purchased by Authorized Participants and $111.7 million and $313.8 million from Shares redeemed by Authorized Participants during the six months ended June 30, 2026 and 2025, respectively.

Results of Operations

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025

The following graph illustrates the percentage changes in (i) the market price of the Shares (as reflected by the line “Market”), (ii) the Trust’s NAV (as reflected by the line “NAV”), and (iii) the closing levels of the Benchmark (as reflected by the line “Lukka Prime Bitcoin Reference Rate (USD)”). There can be no assurance that the price of the Shares or the Trust’s NAV will exceed the Benchmark levels.

No representation is being made that the Benchmark will or is likely to achieve closing levels consistent with or similar to those set forth herein.

COMPARISON OF MARKET, NAV AND LUKKA PRIME BITCOIN REFERENCE RATE (USD)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025

NEITHER THE PAST PERFORMANCE OF THE TRUST NOR THE PRIOR BENCHMARK LEVELS AND CHANGES, POSITIVE OR NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE TRUST’S FUTURE PERFORMANCE.

NEITHER THE PAST PERFORMANCE OF THE TRUST NOR THE PRIOR BENCHMARK LEVELS AND CHANGES,

POSITIVE OR NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE TRUST’S FUTURE PERFORMANCE.

NEITHER THE PAST PERFORMANCE OF THE TRUST NOR THE PRIOR BENCHMARK LEVELS AND CHANGES,

POSITIVE OR NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE TRUST’S FUTURE PERFORMANCE.

NEITHER THE PAST PERFORMANCE OF THE TRUST NOR THE PRIOR BENCHMARK LEVELS AND CHANGES,

POSITIVE OR NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE TRUST’S FUTURE PERFORMANCE.

FOR THE THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2025

Trust Share Price Performance

For the three months ended June 30, 2026, the Exchange market value of each Share decreased from $67.44 per Share to $58.41 per Share. The Share price low and high for the three months ended June 30, 2026 and related change from the Share price on March 31, 2026 was as follows: Shares traded at a low of $58.41 per Share (-13.39%) on June 30, 2026 and a high of $81.58 per Share (+20.97%) on May 11, 2026. The total return for the Trust on a market value basis was -13.39%.

Bitcoin delivered negative performance during the second quarter of 2026 as a combination of ETF outflows, a more hawkish U.S. interest rate outlook, and shifting investor preferences weighed on digital assets. After showing resilience earlier in the quarter, Bitcoin came under pressure in June as geopolitical uncertainty surrounding U.S.-Iran tensions, tighter financial conditions, and continued strength in the U.S. dollar reduced demand for risk assets. Despite the price decline, institutional adoption continued to advance, with growing interest in tokenization, corporate bitcoin treasury strategies, and digital asset investment products providing support to the longer-term investment case. However, these developments were insufficient to offset near-term market headwinds, resulting in weaker bitcoin prices during the quarter.

For the three months ended June 30, 2025, the Exchange market value of each Share increased from $82.25 per Share to

$107.46 per Share. The Share price low and high for the three months ended June 30, 2025 and related change from the Share price on

March 31, 2025 was as follows: Shares traded at a low of $76.59 per Share (-6.88%) on April 8, 2025 and a high of $111.03 per Share

(+34.99%) on May 22, 2025. The total return for the Trust on a market value basis was +30.65%.

Bitcoin bounced back in the second quarter of 2025, rallying over 30%. The rebound was driven by strong investment

demand with U.S. spot bitcoin exchange-traded products (“ETPs”) seeing strong inflows, a sign of recovering investor confidence.

However, the inflows may have also been due to investors finding substitutes for gold as bitcoin is often described as “digital gold.”

Regulatory progress also supported the rally, with the Digital Asset Market Clarity Act of 2025 (CLARITY Act), Guiding and

Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) and Anti-CBDC Surveillance State Act all making

congressional progress, while Europe continued implementation of the Markets in Crypto Asset Regulation (MiCA) framework. These

regulatory developments offered increased legitimacy for cryptocurrencies like bitcoin and supported bitcoin’s investment case.

Trust Share Net Asset Performance

For the three months ended June 30, 2026, the NAV of each Share decreased from $67.51 per Share to $58.42 per Share. The falling price for bitcoin during the three months ended June 30, 2026 contributed to an overall 13.40% decrease in the level of the Benchmark. The total return for the Trust on a NAV basis was -13.46%.

Net income (loss) for the three months ended June 30, 2026 was $(56.1) million, primarily resulting from net realized gain (loss) of $(44.1) million, net change in unrealized gain (loss) of $(11.7) million and net operating expenses of $0.3 million.

For the three months ended June 30, 2025, the NAV of each Share increased from $82.30 per Share to $107.50 per Share.

The rising price for bitcoin during the three months ended June 30, 2025 contributed to an overall 30.70% increase in the level of the

Benchmark. The total return for the Trust on a NAV basis was +30.62%.

Net income (loss) for the three months ended June 30, 2025 was $126.4 million, primarily resulting from net realized gain (loss)

of $12.3 million, net change in unrealized gain (loss) of $114.4 million and net operating expenses of $0.3 million.

FOR THE SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2025

Trust Share Price Performance

For the six months ended June 30, 2026, the Exchange market value of each Share decreased from $87.20 per Share to $58.41

per Share. The Share price low and high for the six months ended June 30, 2026 and related change from the Share price on

December 31, 2025 was as follows: Shares traded at a low of $58.41 per Share (-33.02%) on June 30, 2026 and a high of $97.37 per Share (+11.66%) on January 14, 2026. The total return for the Trust on a market value basis was -33.02%.

Bitcoin generated negative performance during the first half of 2026 as digital asset markets navigated a prolonged period of volatility and declining investor risk appetite. During the first quarter, uncertainty surrounding monetary policy, regulation, and the macroeconomic outlook weighed on sentiment and contributed to the plunge in bitcoin prices, especially in January. Market conditions remained challenging in the second quarter as investors continued to favor more defensive assets amid heightened geopolitical and economic uncertainty. While bitcoin benefited from ongoing progress in institutional adoption, including continued development of digital asset investment products and broader integration of blockchain-based financial infrastructure, these structural advances were overshadowed by weaker market demand and persistent pressure across the broader cryptocurrency ecosystem. As a result, bitcoin prices declined over the period, leading to negative year-to-date performance for the Trust.

For the six months ended June 30, 2025, the Exchange market value of each Share increased from $93.22 per Share to $107.46

per Share. The Share price low and high for the six months ended June 30, 2025 and related change from the Share price on

December 31, 2024 was as follows: Shares traded at a low of $76.59 per Share (-17.84%) on April 8, 2025 and a high of $111.03 per

Share (+19.11%) on May 22, 2025. The total return for the Trust on a market value basis was +15.27%.

Bitcoin had a volatile first half of 2025, posting losses in the first quarter as economic concerns eroded investor

confidence, triggering a downturn in U.S. stock markets. This led to sharp outflows from spot bitcoin ETPs, the largest since the

launch in January 2024. The Bybit hack also added pressure on digital assets, though bitcoin held up better than Ethereum. Despite

this, regulatory progress including a pro-crypto executive order and crypto-friendly appointments at key regulatory agencies provided

support. In the second quarter, bitcoin rebounded nearly 30%, driven by a strong rebound in ETP inflows as global investor risk

appetite improved with most U.S. tariffs stalled and emerging trade deal headlines provided optimism. Congressional progress for

three key digital assets bills (CLARITY Act, GENIUS Act, Anti-CBDC Surveillance State Act) also provided a boost for the asset

class overall.

Trust Share Net Asset Performance

For the six months ended June 30, 2026, the NAV of each Share decreased from $87.22 per Share to $58.42 per Share. The falling price for bitcoin during the six months ended June 30, 2026 contributed to an overall 32.93% decrease in the level of the Benchmark. The total return for the Trust on a NAV basis was -33.02%.

Net income (loss) for the six months ended June 30, 2026 was $(183.1) million, primarily resulting from net realized gain (loss) of $(51.9) million, net change in unrealized gain (loss) of $(130.6) million and net operating expenses of $0.6 million.

For the six months ended June 30, 2025, the NAV of each Share increased from $93.28 per Share to $107.50 per Share. The rising price for bitcoin during the six months ended June 30, 2025 contributed to an overall 15.38% increase in the level of the Benchmark. The total return for the Trust on a NAV basis was +15.24%.

Net income (loss) for the six months ended June 30, 2025 was $53.0 million, primarily resulting from net realized gain (loss) of

$73.3 million, net change in unrealized gain (loss) of $(19.5) million and net operating expenses of $0.7 million.

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Sponsor to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period covered by this report. A description of the valuation of bitcoin, a critical accounting policy that the Trust believes is important to understanding its results of operations and financial position, is provided in the section entitled “Valuation of Bitcoin,” above. In addition, please refer to Note 2 to the financial statements of the Trust for further discussion of the Trust’s accounting policies and Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 2, 2026.

There were no material estimates, which involve a significant level of estimation uncertainty and had or are reasonably likely to have had a material impact on the Trust's financial condition, used in the preparation of these financial statements.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of the management of the Sponsor, including Brian Hartigan, its Principal Executive Officer, and Kelli Gallegos, its Principal Financial and Accounting Officer, Investment Pools, the Trust carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report, and, based upon that evaluation, Brian Hartigan, the Principal Executive Officer of the Sponsor, and Kelli Gallegos, the Principal Financial and Accounting Officer, Investment Pools, of the Sponsor, concluded that the Trust's disclosure controls and procedures were effective to provide reasonable assurance that information the Trust is required to disclose in the reports that it files or submits with the Securities and Exchange Commission (the “SEC”) under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and to provide reasonable assurance that information required to be disclosed by the Trust in the reports that it files or submits under the Exchange Act is accumulated and communicated to management of the Sponsor, including its Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) that occurred during the Trust’s quarter ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.

There are no material changes from the risk factors previously disclosed in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 2, 2026.