| Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis
of Presentation The
financial statements are expressed in US dollars and have been prepared in accordance with generally accepted accounting principles in
the United States (“GAAP”). The Trust qualifies as an investment company for accounting purposes pursuant to the accounting
and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
Topic 946, Financial Services – Investment Companies. The Trust is not registered with U.S. Securities and Exchange Commission
(“SEC”) under the Investment Company Act of 1940. The results for the three months and nine months ended September 30, 2023
and 2022 are not necessarily indicative of the results for the entire year or any subsequent interim period. These financial statements
should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2022. Reclassifications Certain
prior period amounts have been reclassified in order to conform with the current period presentation. These reclassifications have no
impact on the Trust’s previously reported net investment loss. Use
of Estimates GAAP
requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes.
The most significant estimate in the financial statements is the fair value of investments in Bitcoin. Actual results could differ from
those estimates and these differences could be material. Cash Cash
is received by the Trust from investors and converted into Bitcoin for investment. At times, bank deposits may be in excess of federally
insured limits. In accordance with ASC 230 “Statement of Cash Flows,” the Trust qualifies for an exemption from the requirement
to provide a statement of cash flows and has elected not to provide a statement of cash flows. Subscriptions
and Redemptions of Units Proceeds
received by the Trust from the issuance and sale of Units consist of Bitcoin deposits and forked or airdropped cryptocurrency coins from
the Bitcoin Network, or their respective U.S. dollar cash equivalents. Such Bitcoins (or cash equivalent) will only be (1) owned by the
Trust and held by the Custodian (or, if cash, used by the Sponsor to purchase Bitcoins to be held by the Custodian), (2) disbursed (or
converted to U.S. dollars, if necessary) to pay the Trust’s expenses, (3) distributed to Accredited Investors (subject to obtaining
regulatory approval from the SEC described below) in connection with the redemption of Units, (4) distributed (or converted to U.S. dollars,
prior to distribution) to Unitholders as dividends, and (5) liquidated in the event that the Trust terminates or as otherwise required
by law or regulation. The
Trust conducts its transactions in Bitcoin, including receiving Bitcoin for the creation of Units and delivering Bitcoin for the redemption
of Units (if a redemption program were to be established) and for the payment of the Management Fee. During
June 2020, the Trust began a continuous offering of up to $ 5,000,000 154,183 5,000,000 On
November 12, 2020, the Trust began an offering of an unlimited number of Units pursuant to Rule 506(c) under the Securities Act (“November
2020 Offering”). 4,206,224 On
January 14, 2021, the Financial Industry Regulatory Authority (“FINRA”) determined that the Trust’s Units met the criteria
for trading on the over-the-counter market (“OTC Market”). On February 16, 2021, the Trust’s Units began trading in
the OTC Market, operated by OTC Markets Group, Inc., under the ticker symbol “OBTC.” On March 3, 2021, the Trust’s
Units began trading in the OTCQX tier of the OTC Market, under the ticker symbol “OBTC.” Effective
November 1, 2021, the Trust suspended the November 2020 Offering under Rule 506(c) under the Securities Act. As
of September 30, 2023, there were 8,340,536 107,478 8,233,058 The
Trust is currently not redeeming Units. On January 13, 2023, the Sponsor communicated to the Trust’s Unitholders that it is considering
a redemption program for investors in the Trust and that such redemption program would likely involve limited periodic redemptions of
Units, although the Trust had not ruled out the possibility of an open-ended redemption program. Investment
Transactions and Revenue Recognition The
Trust identifies Bitcoin as an “other investment” in accordance with ASC 946. The Trust records its investment transactions
on a trade date basis and changes in fair value are reflected as the net change in unrealized appreciation or depreciation on investments.
Realized gains and losses are calculated using a first in, first out method. Realized gains and losses are recognized in connection with
transactions including settling obligations for the Management Fee and other expenses in Bitcoin. Management
Fee The
Trust is expected to pay the remuneration due to the Sponsor (the “Management Fee” or “Sponsor Fee”). The Management
Fee is charged by the Sponsor to the Trust at an annual rate of 0.49% of the daily Net Asset Value of the Trust and accrues daily in
Bitcoin. The Management Fee is payable at the Sponsor’s sole discretion, in Bitcoin or in U.S. Dollars for the Bitcoin Market Price
(as defined herein) in effect for such Bitcoin at the time of payment. Trust
Expenses In
accordance with the Trust Agreement, the Sponsor bears the routine operational, administrative and other ordinary administrative operating
expenses of the Trust (the “Assumed Expenses”) other than audit fees, index license fees, aggregate legal fees in excess
of $ 50,000 Fair
Value Measurements The
Trust’s investment in Bitcoin is stated at fair value in accordance with ASC 820-10 “Fair Value Measurements,” which
outlines the application of fair value accounting. Fair value is defined as the price that would be received to sell an asset or paid
to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement
date. ASC 820-10 requires the Trust to assume that Bitcoin is sold in its principal market to market participants or, in the absence
of a principal market, the most advantageous market. Principal market is the market with the greatest volume and level of activity for
Bitcoin, and the most advantageous market is defined 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. The principal market
is generally selected based on the most liquid and reliable exchange (including consideration of the ability for the Trust to access
the specific market, either directly or through an intermediary, at the end of each period). GAAP
utilizes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the
use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market
participants would use in pricing the asset or liability based on market data obtained from sources independent of the Trust. Unobservable
inputs reflect the Trust’s assumptions about the inputs market participants would use in pricing the asset or liability developed
based on the best information available in the circumstances. The
fair value hierarchy is categorized into three levels based on the inputs as follows: Level
1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability
to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, these valuations
do not entail a significant degree of judgment. Level
2 – Valuations based on quoted prices in markets that are not active or for which significant inputs are observable, either directly
or indirectly. Level
3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The
availability of valuation techniques and observable inputs can vary by investment. To the extent that valuations are based on sources
that are less observable or unobservable in the market, the determination of fair value requires more judgment. Fair value estimates
do not necessarily represent the amounts that may be ultimately realized by the Trust. Definition
of Net Asset Value The
net asset value (“NAV”) of the Trust is used by the Trust in its day-to-day operations to measure the net value of the Trust’s
assets. The NAV is calculated on each business day and is equal to the aggregate value of the Trust’s assets less its liabilities
(which include accrued but unpaid fees and expenses, both estimated and finally determined), based on the Bitcoin Market Price. In calculating
the value of the Bitcoin held by the Trust on any business day, the Trust will use the market price as of 4:00 p.m. New York time. The
Trust will also calculate the NAV per Unit of the Trust daily, which equals the NAV of the Trust divided by the number of outstanding
Units (the “NAV per Unit”). The Trust considers 4:00 p.m. New York time as a cut off for the end of day reporting. |
