Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 02, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Information [Line Items] | ||
Entity Registrant Name | ARK 21Shares Bitcoin ETF | |
Entity Central Index Key | 0001869699 | |
Entity File Number | 001-41910 | |
Entity Tax Identification Number | 87-6497023 | |
Entity Incorporation, State or Country Code | DE | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Contact Personnel [Line Items] | ||
Entity Address, Address Line One | 477 Madison Avenue | |
Entity Address, Address Line Two | 6th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10022 | |
Entity Phone Fax Numbers [Line Items] | ||
City Area Code | (646) | |
Local Phone Number | 370-6016 | |
Entity Listings [Line Items] | ||
Title of 12(b) Security | Shares of Beneficial Interest of ARK 21Shares Bitcoin ETF | |
Trading Symbol | ARKB | |
Security Exchange Name | CboeBZX | |
Entity Common Stock, Shares Outstanding | 48,705,000 |
Statements of Assets and Liabil
Statements of Assets and Liabilities - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | |||
Assets | |||||
Investment in bitcoin, at fair value (cost $ 2,548,333, and $ –, respectively) | $ 2,850,345 | ||||
Cash | [1] | ||||
Bitcoin sold receivable | 2,411 | [2] | |||
Capital shares receivable | 45,211 | ||||
Total assets | 2,897,967 | [1] | |||
Liabilities | |||||
Bitcoin purchased payable | 45,211 | [3] | |||
Capital shares payable | 2,411 | ||||
Sponsor’s fee payable | 770 | ||||
Total liabilities | 48,392 | ||||
Net assets | 2,849,575 | [4] | [1] | ||
Net assets consist of | |||||
Net assets consist of Paid-in-capital | 2,414,179 | [1] | |||
Accumulated earnings (loss) | 435,396 | ||||
Net assets | [5] | $ 2,849,575 | [1] | ||
Shares issued and outstanding, no par value, unlimited amount authorized (in Shares) | 46,050,000 | 2 | |||
Net asset value per share (in Dollars per share) | [6] | $ 61.88 | $ 50 | ||
[1] Amount rounds to less than $1,000. See Note 1 to the Unaudited Notes to Financial Statements. No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. No comparative schedule has been provided as the Trust did not hold any bitcoin as of December 31, 2023. No prior year comparative statement has been provided as this is the first fiscal year of the Trust’s operations. No prior year comparative financial statements have been provided as this is the first fiscal year of the Trust’s operations. |
Statements of Assets and Liab_2
Statements of Assets and Liabilities (Parentheticals) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2023 | Jun. 30, 2024 | |
Statement of Financial Position [Abstract] | ||
Investment in bitcoin, fair value cost | $ 2,548,333 | |
Common stock par value | ||
Common stock Shares authorized | Unlimited | Unlimited |
Schedule of Investment
Schedule of Investment $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 USD ($) | [1] | |
% of Net Assets | 100% | |
Fair Value | $ 2,849,575 | |
Investment in bitcoin | ||
Cost | $ 2,548,333 | |
Quantity of bitcoin | 46,025.7971 | |
% of Net Assets | 100.03% | |
Fair Value | $ 2,850,345 | |
Total investments | ||
Cost | $ 2,548,333 | |
Quantity of bitcoin | 46,025.7971 | |
% of Net Assets | 100.03% | |
Fair Value | $ 2,850,345 | |
Liabilities in excess of other assets | ||
% of Net Assets | (0.03%) | |
Fair Value | $ (770) | |
[1] No comparative schedule has been provided as the Trust did not hold any bitcoin as of December 31, 2023. |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2024 | ||
Expenses | |||
Sponsor’s fee | [1] | $ 1,555 | $ 2,276 |
Total expenses | [1] | 1,555 | 2,276 |
Less waiver and reimbursement | [1] | (93) | |
Net expenses | [1] | 1,555 | 2,183 |
Net investment loss | [1] | (1,555) | (2,183) |
Realized and change in unrealized gain (loss) | |||
Net realized gain on investment in bitcoin sold to pay Sponsor’s fee | [1] | 327 | 327 |
Net realized gain on investment in bitcoin sold for redemptions | [1] | 135,325 | 135,240 |
Net change in unrealized appreciation (depreciation) on investment in bitcoin | [1] | (543,311) | 302,012 |
Net realized and change in unrealized gain (loss) | [1] | (407,659) | 437,579 |
Net increase (decrease) in net assets resulting from operations | [1] | $ (409,214) | $ 435,396 |
[1] No prior year comparative statement has been provided as this is the first fiscal year of the Trust’s operations. |
Statements of Changes in Net As
Statements of Changes in Net Assets - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2024 | |||
Statement of Stockholders' Equity [Abstract] | ||||
Net assets, beginning of period | [1] | $ 3,160,033 | [2] | |
Shares issued and redeemed | ||||
Shares issued (in Shares) | [1],[3] | 13,310,000 | 57,990,000 | |
Shares redeemed (in Shares) | [1],[3] | (11,930,000) | (11,940,000) | |
Net increase in Shares issued (in Shares) | [1],[3] | 1,380,000 | 46,050,000 | |
Contributions for Shares issued | [1],[3] | $ 875,834 | $ 3,191,676 | |
Distributions for Shares redeemed | [1] | (777,078) | (777,497) | |
Net investment loss | [4] | (1,555) | (2,183) | |
Net realized gain on investment in bitcoin sold to pay Sponsor’s fee | [1] | 327 | 327 | |
Net realized gain on investment in bitcoin sold for redemptions | [4] | 135,325 | 135,240 | |
Net change in unrealized appreciation (depreciation) on investment in bitcoin | [4] | (543,311) | 302,012 | |
Net assets, end of period | [1] | $ 2,849,575 | $ 2,849,575 | |
[1] No prior year comparative statement has been provided as this is the first fiscal year of the Trust’s operations. Amount rounds to less than $1,000. See Note 1 to the Unaudited Notes to Financial Statements. No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. No prior year comparative statement has been provided as this is the first fiscal year of the Trust’s operations. |
Organization
Organization | 6 Months Ended |
Jun. 30, 2024 | |
Organization [Abstract] | |
Organization | 1. Organization The ARK 21Shares Bitcoin ETF (the “Trust”) is a Delaware statutory trust, formed on June 22, 2021, pursuant to the Delaware Statutory Trust Act (“DSTA”). The Trust operates pursuant to an Amended and Restated Trust Agreement (the “Trust Agreement”). Delaware Trust Company, a Delaware trust company, is the trustee of the Trust (the “Trustee”). The Trust is managed and controlled by 21Shares US LLC (the “Sponsor”). The Sponsor is a limited liability company formed in the state of Delaware on June 16, 2021, and is a wholly owned subsidiary of Jura Pentium Inc., whose ultimate parent company is 21co Holdings Limited (formerly known as Amun Holdings Limited). Coinbase Custody Trust Company, LLC (“Coinbase Custody”) (the “Custodian”) is the custodian for the Trust and will hold all of the Trust’s bitcoin on the Trust’s behalf. The transfer agent (the “Transfer Agent”) and the administrator for the Trust (the “Administrator”) is Bank of New York Mellon. The Trust is an exchange-traded fund (“ETF”) that issues units of beneficial interest (the “Shares”) representing fractional undivided beneficial interests in its net assets that trade on the Cboe BZX Exchange, Inc. (the “Exchange”). The Shares were listed for trading on the Exchange on January 11, 2024, under the ticker symbol “ARKB”. The Trust’s investment objective is to seek to track the performance of bitcoin, as measured by the performance of the CME CF Bitcoin Reference Rate—New York Variant (the “Index”), adjusted for the Trust’s expenses and other liabilities. CF Benchmarks Ltd. is the administrator for the Index (the “Index Provider”). The Index is designed to reflect the performance of bitcoin in U.S. dollars. In seeking to achieve its investment objective, the Trust holds bitcoin at its Custodian and values its Shares daily based on the Index. ARK Investment Management LLC (the “Sub-Adviser”) is the sub-adviser of the Trust and provides assistance in the marketing of the Shares. The Trust’s Shares are neither interests in nor obligations of the Sponsor, the Sub-Adviser, or the Trustee. The Trust is an “emerging growth company” as that term is used in the Securities Act of 1933, as amended (the “Securities Act”), and, as such, the Trust may elect to comply with certain reduced public company reporting requirements. On December 12, 2023, the Sponsor, in its capacity as Seed Capital Investor, subject to conditions, purchased the initial Seed Creation Baskets comprising 2 Shares at a per-Share price of $50.00, as described in “Seed Capital Investor.” Total proceeds to the Trust from the sale of these Seed Creation Baskets were $100. Delivery of the Seed Creation Baskets was made on December 12, 2023. These Seed Creation Baskets were redeemed for cash on or about January 5, 2024. On January 9, 2024 (the “Seed Capital Purchase Date”), the Seed Capital Investor purchased Seed Creation Baskets comprising 10,000 Shares (the “Initial Seed Creation Baskets”) at a per-share price of $46.88. Total proceeds to the Trust from the sale of the Seed Creation Baskets were $468,806.44. On January 9, 2024, the Trust purchased 10 bitcoins with the proceeds of the Seed Creation Baskets by transacting with a Bitcoin Counterparty to acquire bitcoin on behalf of the Trust in exchange for cash provided by the Sponsor in its capacity as Seed Capital Investor. These Seed Creation Baskets were redeemed for cash on or about January 19, 2024. The statements of assets and liabilities and schedule of investments on June 30, 2024, and the statements of operations and changes in net assets for the three and six months ended June 30, 2024, have been prepared on behalf of the Trust and are unaudited. In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position and results of operations for the three and six months ended June 30, 2024, and for all interim periods presented have been made. In addition, interim period results are not necessarily indicative of results for a full-year period. The fiscal year of the Trust is December 31st. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Accounting The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP” or “GAAP”). The Trust qualifies as an investment company solely for accounting purposes and not for any other purpose and follows the accounting and reporting guidance under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services - Investment Companies, but is not registered, and is not required to be registered, as an investment company under the Investment Company Act of 1940, as amended. 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 preparation of the financial statements in conformity with US GAAP requires the Trust to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from such estimates as additional information becomes available or actual amounts may become determinable. Should actual results differ from those previously recognized, the recorded estimates will be revised accordingly with the impact reflected in the operating results of the Trust in the reporting period in which they become known. Cash Cash includes non-interest bearing, non-restricted cash maintained with one financial institution that does not exceed U.S. federally insured limits. Investment Valuation US GAAP defines fair value as the price the Trust would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Trust’s policy is to value investments held at fair value. The Trust identifies and determines the bitcoin principal market (or in the absence of a principal market, the most advantageous market) for GAAP purposes consistent with the application of the fair value measurement framework in FASB ASC 820. A principal market is the market with the greatest volume and activity level for the asset or liability. The determination of the principal market will be based on the market with the greatest volume and level of activity that can be accessed. The Trust obtains relevant volume and level of activity information and based on initial analysis will select an exchange market as the Trust’s principal market. The net asset value (“NAV”) and NAV per Share will be calculated using the fair value of bitcoin based on the price provided by this exchange market, as of 4:00 p.m. ET on the measurement date for GAAP purposes. The Trust will update its principal market analysis periodically and as needed to the extent that events have occurred, or activities have changed in a manner that could change the Trust’s determination of the principal market. Various inputs are used in determining the fair value of assets and liabilities. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and Level 3: Unobservable inputs, including the Trust’s assumptions used in determining the fair value of investments, where there is little or no market activity for the asset or liability at the measurement date. Amount at Fair Value Measurement Using (Amounts in thousands) Fair Value Level 1 Level 2 Level 3 June 30, 2024 Assets Investment in bitcoin $ 2,850,345 $ 2,850,345 $ – $ – * No comparative schedule has been provided as the Trust did not hold any bitcoin as of December 31, 2023. The cost basis of the investment in bitcoin recorded by the Trust for financial reporting purposes is the fair value of bitcoin at the time of transfer. The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors. Investment Transactions The Trust considers investment transactions to be the receipt of bitcoin for Share creations and the delivery of bitcoin for Share redemptions or for payment of expenses in bitcoin. The Trust records its investments 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. Calculation of Net Asset Value (NAV) and NAV per Share On each day other than a Saturday or Sunday, or a day on which Cboe BZX Exchange is closed for regular trading (a “Business Day”), as soon as practicable after 4:00 p.m. (Eastern Time), the net asset value of the Trust is obtained by subtracting all accrued fees, expenses and other liabilities of the Trust from the fair value of the bitcoin and other assets held by the Trust. The Trustee computes the net asset value per Share by dividing the net asset value of the Trust by the number of Shares outstanding on the date the computation is made. Federal Income Taxes The Sponsor and the Trustee will treat the Trust as a “grantor trust” for U.S. federal income tax purposes. Although not free from doubt due to the lack of directly governing authority, if the Trust operates as expected, the Trust should be classified as a “grantor trust” for U.S. federal income tax purposes and the Trust itself should not be subject to U.S. federal income tax. Each beneficial owner of Shares will be treated as directly owning its pro rata Share of the Trust’s assets and a pro rata portion of the Trust’s income, gain, losses and deductions will “flow through” to each beneficial owner of Shares. If the Trust sells bitcoin (for example, to pay fees or expenses), such a sale is a taxable event to Shareholders. Upon a Shareholder’s sale of its Shares, the Shareholder will be treated as having sold the pro rata share of the bitcoin held in the Trust at the time of the sale and may recognize gain or loss on such sale. The Sponsor has reviewed the tax positions as of June 30, 2024, and has determined that no provision for income tax is required in the Trust’s financial statements. Recently Issued Accounting Pronouncement In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. ASU 2023-08 is effective for annual and interim reporting periods beginning after December 15, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued. The Trust adopted this new guidance with no material impact on its financial statements and disclosures as the Trust uses fair value as its method of accounting for bitcoin in accordance with its classification as an investment company for accounting purposes. |
Fair Value of Bitcoin
Fair Value of Bitcoin | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value of Bitcoin [Abstract] | |
Fair Value of Bitcoin | 3. Fair Value of Bitcoin The following represents the changes in quantity of bitcoin and the respective fair value on June 30, 2024 *: (Amounts in thousands, except Quantity of bitcoin) Quantity of bitcoin Fair Value Beginning balance as of January 1, 2024 – $ – Bitcoin purchased 57,979.9144 3,191,635 Bitcoin sold (11,933.3010 ) (778,869 ) Net realized gain on investment in bitcoin sold to pay Sponsor’s fee (20.8163 ) 327 Net realized gain on investment in bitcoin sold for redemptions – 135,240 Change in unrealized appreciation on investment in bitcoin – 302,012 Ending balance as of June 30, 2024* 46,025.7971 $ 2,850,345 * No prior year comparative period presented as this is the first fiscal year of the Trust’s operations. |
Expenses
Expenses | 3 Months Ended |
Mar. 31, 2024 | |
Expenses [Abstract] | |
Expenses | 4. Expenses The Trust pays the unitary Sponsor Fee of 0.21% of the Trust’s bitcoin holdings. The Sponsor Fee is paid by the Trust to the Sponsor as compensation for services performed under the Trust Agreement. The Sponsor agreed to waive the entire Sponsor Fee for (i) a six-month period which commenced on January 11, 2024 (the day the Trust's Shares were initially listed on the Exchange), or (ii) the first $1 billion of Trust assets, whichever came first. The Trust assets exceeded $1 billion prior to the end of the six month period, at which time the waiver period ended. The Sponsor has agreed to pay all operating expenses (except for litigation expenses and other extraordinary expenses) out of the Sponsor Fee. Operating expenses assumed by the Sponsor include (i) fees to the Sub-Adviser; (ii) the Marketing Fee, (iii) fees to the administrator, if any, (iv) fees to the bitcoin Custodian, (v) fees to the Transfer Agent, (vi) fees to the Trustee, (vii) the fees and expenses related to any future listing, trading or quotation of the Shares on any listing exchange or quotation system (including legal, marketing and audit fees and expenses), (viii) ordinary course legal fees and expenses but not litigation-related expenses, (ix) audit fees, (x) regulatory fees, including, if applicable, any fees relating to the registration of the Shares under the 1933 Act or Exchange Act, (xi) printing and mailing costs; (xii) costs of maintaining the Trust’s website and (xiii) applicable license fees (each, a “Sponsor-paid Expense,” and together, the “Sponsor-paid Expenses”), provided that any expense that qualifies as an Additional Trust Expense (as defined below) will be deemed to be an Additional Trust Expense and not a Sponsor-paid Expense. The Sponsor will not, however, assume certain extraordinary, non-recurring expenses that are not Sponsor-paid Expenses, including, but not limited to, taxes and governmental charges, 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, any indemnification of the bitcoin Custodian, Administrator or other agents, service providers or counter-parties of the Trust, the fees and expenses related to the listing, and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters (collectively, “Additional Trust Expenses”). Of the Sponsor-paid Expenses, ordinary course legal fees and expenses shall be subject to a cap of $100,000 per annum. In the Sponsor’s sole discretion, all or any portion of a Sponsor-paid Expense may be re-designated as an Additional Trust Expense. To the extent that the Sponsor does not voluntarily assume expenses, they will be the responsibility of the Trust. The Sponsor also pays the costs of the Trust’s organization and offering. The Trust is not obligated to repay any such costs related to the Trust’s organization and offering paid by the Sponsor. |
Creation and Redemption of Shar
Creation and Redemption of Shares | 6 Months Ended |
Jun. 30, 2024 | |
Creation and Redemption of Shares [Abstract] | |
Creation and Redemption of Shares | 5. Creation and Redemption of Shares The Trust creates and redeems Shares on a continuous basis but only in Creation Units consisting of 5,000 Shares or multiples thereof. Only Authorized Participants, which are registered broker-dealers who have entered into written agreements with the Sponsor and the Administrator, can place orders. The Trust engages in bitcoin transactions for converting cash into bitcoin (in association with purchase orders) and bitcoin into cash (in association with redemption orders). The Trust conducts its bitcoin purchase and sale transactions by, in its sole discretion, choosing to trade directly with third parties (each, a “bitcoin Trading Counterparty”), who are not registered broker-dealers pursuant to written agreements between such bitcoin Trading Counterparties and the Trust, or choosing to trade through the Prime Broker acting in an agency capacity with third parties through its Coinbase Prime service pursuant to the Prime Broker Agreement. A bitcoin Trading Counterparty may be an affiliate of an Authorized Participant. The Authorized Participants deliver only cash to create Shares and receive only cash when redeeming Shares. Further, Authorized Participants will not directly or indirectly purchase, hold, deliver, or receive bitcoin as part of the creation or redemption process or otherwise direct the Trust or a third-party with respect to purchasing, holding, delivering, or receiving bitcoin as part of the creation or redemption process. The Trust creates Shares by receiving bitcoin from a third-party that is not the Authorized Participant and the Trust—not the Authorized Participant—is responsible for selecting the third-party to deliver the bitcoin. Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the delivery of the bitcoin to the Trust or acting at the direction of the Authorized Participant with respect to the delivery of the bitcoin to the Trust. The Trust redeems Shares by delivering bitcoin to a third-party that is not the Authorized Participant and the Trust—not the Authorized Participant—is responsible for selecting the third-party to receive the bitcoin. Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the receipt of the bitcoin from the Trust or acting at the direction of the Authorized Participant with respect to the receipt of the bitcoin from the Trust. The third-party is unaffiliated with the Trust and the Sponsor. Three Months Six Months Activity in Capital Transactions Issued and Redeemed: Shares issued 13,310,000 57,990,000 Shares redeemed (11,930,000 ) (11,940,000 ) Net Change in Capital Transactions Issued and Redeemed 1,380,000 46,050,000 (Amounts in thousands) Three Months Six Months Activity in Capital Transactions Issued and Redeemed: Shares issued 875,834 3,191,676 Shares redeemed (777,078 ) (777,497 ) Net Change in Capital Transactions Issued and Redeemed 98,756 2,414,179 * No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. Bitcoin purchased payable represents the quantity of bitcoin purchased for the creation of Shares where the bitcoin has not yet settled. Generally, bitcoin is transferred within two business days of the trade date. June 30, (Amounts in thousands) 2024* Bitcoin purchased payable $ 45,211 * No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. Bitcoin sold receivable represents the quantity of bitcoin sold for the redemption of Shares where the bitcoin has not yet been settled. Generally, bitcoin is transferred within two business days of the trade date. June 30, (Amounts in thousands) 2024* Bitcoin sold receivable $ 2,411 * No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2024 | |
Related Parties [Abstract] | |
Related Parties | 6. Related Parties The Sponsor is a related party to the Trust. The Trust’s operations are supported by its Sponsor, who is in turn supported by its parent company and affiliated companies and external service providers. As of June 30, 2024, the Sponsor owned zero Shares of the Trust. The Sponsor arranged for the creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering in the United States and the listing of Shares on the Exchange. |
Financial Highlights
Financial Highlights | 6 Months Ended |
Jun. 30, 2024 | |
Financial Highlights [Abstract] | |
Financial Highlights | 7. Financial Highlights* Per Share Performance (for a Share outstanding throughout the periods presented) For the For the (Unaudited) (Unaudited) Net asset value per Share, beginning of period $ 70.74 $ 50.00 Net investment loss on investment in bitcoin (1) (0.03 ) (0.06 ) Net realized and change in unrealized gain (loss) on investment in bitcoin (8.83 ) 11.94 Net change in net assets from operations (8.86 ) 11.88 Net asset value per Share, end of period $ 61.88 $ 61.88 Total return, at net asset value (2) (12.52 )% 23.76 % Ratio to average net assets (3) Net investment loss (0.21 )% (0.19 )% Gross expenses 0.21 % 0.20 % Net expenses 0.21 % 0.19 % * No prior year comparative financial statements have been provided as this is the first fiscal year of the Trust’s operations. 1 Calculated using average Shares outstanding. 2 Total return is calculated based on the change in value during the period and is not annualized. An individual shareholder’s total return and ratio may vary from the above total returns and ratios based on the timing of contributions to and withdrawals from the Trust. 3 Annualized. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingent Liabilities [Abstract] | |
Commitments and Contingent Liabilities | 8. Commitments and Contingent Liabilities In the normal course of business, the Trust may enter into contracts that contain a variety of general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust which have not yet occurred and cannot be predicted with any certainty. However, the Sponsor believes the risk of loss under these arrangements to be remote. |
Indemnification
Indemnification | 6 Months Ended |
Jun. 30, 2024 | |
Indemnification [Abstract] | |
Indemnification | 9. Indemnification The Sponsor will not be liable to the Trust, the Trustee or any Shareholder for any action taken or for refraining from taking any action in good faith, or for errors in judgment or for depreciation or loss incurred by reason of the sale of any bitcoin or other assets of the Trust. However, the preceding liability exclusion will not protect the Sponsor against any liability resulting from its own gross negligence, bad faith, or willful misconduct. The Sponsor and each of its shareholders, members, directors, officers, employees, affiliates, and subsidiaries will be indemnified by the Trust and held harmless against any losses, liabilities or expenses incurred in the performance of its duties under the Declaration of Trust without gross negligence, bad faith, or willful misconduct. The Sponsor may rely in good faith on any paper, order, notice, list, affidavit, receipt, evaluation, opinion, endorsement, assignment, draft, or any other document of any kind prima facie properly executed and submitted to it by the Trustee, the Trustee’s counsel or by any other person for any matters arising under the Declaration of Trust. The Sponsor shall in no event be deemed to have assumed or incurred any liability, duty, or obligation to any Shareholder or to the Trustee other than as expressly provided for in the Declaration of Trust. Such indemnity includes payment from the Trust of the costs and expenses incurred in defending against any indemnified claim or liability under the Declaration of Trust. The Trustee will not be liable or accountable to the Trust or any other person or under any agreement to which the Trust or any series of the Trust is a party, except for the Trustee’s breach of its obligations pursuant to the Declaration of Trust or its own willful misconduct, bad faith or gross negligence. The Trustee and each of the Trustee’s officers, affiliates, directors, employees, and agents will be indemnified by the Trust from and against any losses, claims, taxes, damages, reasonable expenses, and liabilities incurred with respect to the creation, operation or termination of the Trust, the execution, delivery or performance of the Declaration of Trust or the transactions contemplated thereby; provided that the indemnified party acted without willful misconduct, bad faith or gross negligence. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events The Trust has evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements were issued and has determined that there are no material events that would require disclosure in the financial statements. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2024 | ||
Pay vs Performance Disclosure | |||
Net Income (Loss) | [1] | $ (409,214) | $ 435,396 |
[1] No prior year comparative statement has been provided as this is the first fiscal year of the Trust’s operations. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule 10b5-1 Arrangement Modified | false |
Non-Rule 10b5-1 Arrangement Modified | false |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Significant Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP” or “GAAP”). The Trust qualifies as an investment company solely for accounting purposes and not for any other purpose and follows the accounting and reporting guidance under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services - Investment Companies, but is not registered, and is not required to be registered, as an investment company under the Investment Company Act of 1940, as amended. 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 preparation of the financial statements in conformity with US GAAP requires the Trust to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from such estimates as additional information becomes available or actual amounts may become determinable. Should actual results differ from those previously recognized, the recorded estimates will be revised accordingly with the impact reflected in the operating results of the Trust in the reporting period in which they become known. |
Cash | Cash Cash includes non-interest bearing, non-restricted cash maintained with one financial institution that does not exceed U.S. federally insured limits. |
Investment Valuation | Investment Valuation US GAAP defines fair value as the price the Trust would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Trust’s policy is to value investments held at fair value. The Trust identifies and determines the bitcoin principal market (or in the absence of a principal market, the most advantageous market) for GAAP purposes consistent with the application of the fair value measurement framework in FASB ASC 820. A principal market is the market with the greatest volume and activity level for the asset or liability. The determination of the principal market will be based on the market with the greatest volume and level of activity that can be accessed. The Trust obtains relevant volume and level of activity information and based on initial analysis will select an exchange market as the Trust’s principal market. The net asset value (“NAV”) and NAV per Share will be calculated using the fair value of bitcoin based on the price provided by this exchange market, as of 4:00 p.m. ET on the measurement date for GAAP purposes. The Trust will update its principal market analysis periodically and as needed to the extent that events have occurred, or activities have changed in a manner that could change the Trust’s determination of the principal market. Various inputs are used in determining the fair value of assets and liabilities. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and Level 3: Unobservable inputs, including the Trust’s assumptions used in determining the fair value of investments, where there is little or no market activity for the asset or liability at the measurement date. Amount at Fair Value Measurement Using (Amounts in thousands) Fair Value Level 1 Level 2 Level 3 June 30, 2024 Assets Investment in bitcoin $ 2,850,345 $ 2,850,345 $ – $ – * No comparative schedule has been provided as the Trust did not hold any bitcoin as of December 31, 2023. The cost basis of the investment in bitcoin recorded by the Trust for financial reporting purposes is the fair value of bitcoin at the time of transfer. The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors. |
Investment Transactions | Investment Transactions The Trust considers investment transactions to be the receipt of bitcoin for Share creations and the delivery of bitcoin for Share redemptions or for payment of expenses in bitcoin. The Trust records its investments 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. |
Calculation of Net Asset Value (NAV) and NAV per Share | Calculation of Net Asset Value (NAV) and NAV per Share On each day other than a Saturday or Sunday, or a day on which Cboe BZX Exchange is closed for regular trading (a “Business Day”), as soon as practicable after 4:00 p.m. (Eastern Time), the net asset value of the Trust is obtained by subtracting all accrued fees, expenses and other liabilities of the Trust from the fair value of the bitcoin and other assets held by the Trust. The Trustee computes the net asset value per Share by dividing the net asset value of the Trust by the number of Shares outstanding on the date the computation is made. |
Federal Income Taxes | Federal Income Taxes The Sponsor and the Trustee will treat the Trust as a “grantor trust” for U.S. federal income tax purposes. Although not free from doubt due to the lack of directly governing authority, if the Trust operates as expected, the Trust should be classified as a “grantor trust” for U.S. federal income tax purposes and the Trust itself should not be subject to U.S. federal income tax. Each beneficial owner of Shares will be treated as directly owning its pro rata Share of the Trust’s assets and a pro rata portion of the Trust’s income, gain, losses and deductions will “flow through” to each beneficial owner of Shares. If the Trust sells bitcoin (for example, to pay fees or expenses), such a sale is a taxable event to Shareholders. Upon a Shareholder’s sale of its Shares, the Shareholder will be treated as having sold the pro rata share of the bitcoin held in the Trust at the time of the sale and may recognize gain or loss on such sale. The Sponsor has reviewed the tax positions as of June 30, 2024, and has determined that no provision for income tax is required in the Trust’s financial statements. |
Recently Issued Accounting Pronouncement | Recently Issued Accounting Pronouncement In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. ASU 2023-08 is effective for annual and interim reporting periods beginning after December 15, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued. The Trust adopted this new guidance with no material impact on its financial statements and disclosures as the Trust uses fair value as its method of accounting for bitcoin in accordance with its classification as an investment company for accounting purposes. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Significant Accounting Policies [Abstract] | |
Schedule of Unobservable Inputs Trust’s Assumptions Fair Value of Investments | Level 3: Unobservable inputs, including the Trust’s assumptions used in determining the fair value of investments, where there is little or no market activity for the asset or liability at the measurement date. Amount at Fair Value Measurement Using (Amounts in thousands) Fair Value Level 1 Level 2 Level 3 June 30, 2024 Assets Investment in bitcoin $ 2,850,345 $ 2,850,345 $ – $ – |
Fair Value of Bitcoin (Tables)
Fair Value of Bitcoin (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value of Bitcoin [Abstract] | |
Schedule of Changes in Quantity of Bitcoin | The following represents the changes in quantity of bitcoin and the respective fair value on June 30, 2024 *: (Amounts in thousands, except Quantity of bitcoin) Quantity of bitcoin Fair Value Beginning balance as of January 1, 2024 – $ – Bitcoin purchased 57,979.9144 3,191,635 Bitcoin sold (11,933.3010 ) (778,869 ) Net realized gain on investment in bitcoin sold to pay Sponsor’s fee (20.8163 ) 327 Net realized gain on investment in bitcoin sold for redemptions – 135,240 Change in unrealized appreciation on investment in bitcoin – 302,012 Ending balance as of June 30, 2024* 46,025.7971 $ 2,850,345 * No prior year comparative period presented as this is the first fiscal year of the Trust’s operations. |
Creation and Redemption of Sh_2
Creation and Redemption of Shares (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Creation and Redemption of Shares [Abstract] | |
Schedule of Activity in Number of Shares Issued and Redeemed | The third-party is unaffiliated with the Trust and the Sponsor. Three Months Six Months Activity in Capital Transactions Issued and Redeemed: Shares issued 13,310,000 57,990,000 Shares redeemed (11,930,000 ) (11,940,000 ) Net Change in Capital Transactions Issued and Redeemed 1,380,000 46,050,000 (Amounts in thousands) Three Months Six Months Activity in Capital Transactions Issued and Redeemed: Shares issued 875,834 3,191,676 Shares redeemed (777,078 ) (777,497 ) Net Change in Capital Transactions Issued and Redeemed 98,756 2,414,179 * No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. |
Schedule of Bitcoin Purchased Payable | Bitcoin purchased payable represents the quantity of bitcoin purchased for the creation of Shares where the bitcoin has not yet settled. Generally, bitcoin is transferred within two business days of the trade date. June 30, (Amounts in thousands) 2024* Bitcoin purchased payable $ 45,211 * No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. |
Schedule of Bitcoin Sold Receivable | Bitcoin sold receivable represents the quantity of bitcoin sold for the redemption of Shares where the bitcoin has not yet been settled. Generally, bitcoin is transferred within two business days of the trade date. June 30, (Amounts in thousands) 2024* Bitcoin sold receivable $ 2,411 * No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. |
Financial Highlights (Tables)
Financial Highlights (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Financial Highlights [Abstract] | |
Schedule of Financial Highlights Per Share Performance | Per Share Performance (for a Share outstanding throughout the periods presented) For the For the (Unaudited) (Unaudited) Net asset value per Share, beginning of period $ 70.74 $ 50.00 Net investment loss on investment in bitcoin (1) (0.03 ) (0.06 ) Net realized and change in unrealized gain (loss) on investment in bitcoin (8.83 ) 11.94 Net change in net assets from operations (8.86 ) 11.88 Net asset value per Share, end of period $ 61.88 $ 61.88 Total return, at net asset value (2) (12.52 )% 23.76 % Ratio to average net assets (3) Net investment loss (0.21 )% (0.19 )% Gross expenses 0.21 % 0.20 % Net expenses 0.21 % 0.19 % * No prior year comparative financial statements have been provided as this is the first fiscal year of the Trust’s operations. 1 Calculated using average Shares outstanding. 2 Total return is calculated based on the change in value during the period and is not annualized. An individual shareholder’s total return and ratio may vary from the above total returns and ratios based on the timing of contributions to and withdrawals from the Trust. 3 Annualized. |
Organization (Details)
Organization (Details) - USD ($) | Jan. 09, 2024 | Dec. 12, 2023 |
Organization [Abstract] | ||
Purchased shares | 10,000 | 2 |
Per share price | $ 46.88 | $ 50 |
Total proceeds | $ 468,806,440 | $ 100,000 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - Schedule of Unobservable Inputs Trust’s Assumptions Fair Value of Investments - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Investment in bitcoin | $ 2,850,345 | |
Level 1 [Member] | ||
Assets | ||
Investment in bitcoin | 2,850,345 | |
Level 2 [Member] | ||
Assets | ||
Investment in bitcoin | ||
Level 3 [Member] | ||
Assets | ||
Investment in bitcoin |
Fair Value of Bitcoin (Details)
Fair Value of Bitcoin (Details) - Schedule of Changes in Quantity of Bitcoin0 $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 USD ($) | ||
Schedule of Changes in Quantity of Bitcoin [Abstract] | ||
Quantity of bitcoin, Beginning balance | ||
Fair Value, Beginning balance | ||
Quantity of bitcoin, Bitcoin purchased | 57,979.9144 | |
Fair Value, Bitcoin purchased | $ 3,191,635 | |
Quantity of bitcoin, Bitcoin sold | (11,933.301) | |
Fair Value, Bitcoin sold | $ (778,869) | |
Quantity of bitcoin, Net realized gain on investment in bitcoin sold to pay Sponsor’s fee | (20.8163) | |
Fair Value, Net realized gain on investment in bitcoin sold to pay Sponsor’s fee | $ 327 | |
Quantity of bitcoin, Net realized gain on investment in bitcoin sold for redemptions | ||
Fair Value, Net realized gain on investment in bitcoin sold for redemptions | $ 135,240 | |
Quantity of bitcoin, Change in unrealized appreciation on investment in bitcoin | ||
Fair Value, Change in unrealized appreciation on investment in bitcoin | $ 302,012 | |
Quantity of bitcoin, Ending balance | 46,025.7971 | [1] |
Fair Value, Ending balance | $ 2,850,345 | [1] |
[1]No prior year comparative period presented as this is the first fiscal year of the Trust’s operations. |
Expenses (Details)
Expenses (Details) | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Expenses [Line Items] | |
Percentage of sponsor fee | 0.21% |
Trust assets | $ 1,000,000,000 |
Legal fees and expenses | 100,000 |
Sponsor [Member] | |
Expenses [Line Items] | |
Trust assets | $ 1,000,000,000 |
Creation and Redemption of Sh_3
Creation and Redemption of Shares (Details) | Jun. 30, 2024 shares |
Creation and Redemption of Shares [Abstract] | |
Creation units | 5,000 |
Creation and Redemption of Sh_4
Creation and Redemption of Shares (Details) - Schedule of Activity in Number of Shares Issued and Redeemed - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2024 | ||
Activity in Capital Transactions Issued and Redeemed: | |||
Shares issued | [1],[2] | 13,310,000 | 57,990,000 |
Shares redeemed | [1],[2] | (11,930,000) | (11,940,000) |
Net Change in Capital Transactions Issued and Redeemed | [1],[2] | 1,380,000 | 46,050,000 |
Activity in Capital Transactions Issued and Redeemed: | |||
Shares issued | [1],[2] | $ 875,834 | $ 3,191,676 |
Shares redeemed | [1] | (777,078) | (777,497) |
Net Change in Capital Transactions Issued and Redeemed | [1] | $ 98,756 | $ 2,414,179 |
[1] No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. No prior year comparative statement has been provided as this is the first fiscal year of the Trust’s operations. |
Creation and Redemption of Sh_5
Creation and Redemption of Shares (Details) - Schedule of Bitcoin Purchased Payable - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | |
Schedule of Bitcoin Purchased Payable [Abstract] | |||
Bitcoin purchased payable | $ 45,211 | [1] | |
[1] No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. |
Creation and Redemption of Sh_6
Creation and Redemption of Shares (Details) - Schedule of Bitcoin Sold Receivable - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | |
Schedule of Bitcoin Sold Receivable [Abstract] | |||
Bitcoin sold receivable | $ 2,411 | [1] | |
[1] No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations. |
Related Parties (Details)
Related Parties (Details) | Jun. 30, 2024 shares |
Sponsor [Member] | |
Related Parties [Line Items] | |
Shares of the Trust, held by related parties | 0 |
Financial Highlights (Details)
Financial Highlights (Details) - Schedule of Financial Highlights Per Share Performance - $ / shares | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2024 | ||
Financial Highlights [Abstract] | |||
Net asset value per Share, beginning of period | [1] | $ 70.74 | $ 50 |
Total return, at net asset value | [1],[2] | (12.52%) | 23.76% |
Ratio to average net assets(3) | |||
Net investment loss | [1],[3] | (0.21%) | (0.19%) |
Gross expenses | [1],[3] | 0.21% | 0.20% |
Net expenses | [1],[3] | 0.21% | 0.19% |
Net investment loss on investment in bitcoin | [1],[4] | $ (0.03) | $ (0.06) |
Net realized and unrealized gain (loss) on investment in bitcoin | [1] | (8.83) | 11.94 |
Net change in net assets from operations | [1] | (8.86) | 11.88 |
Net asset value per Share, end of period | [1] | $ 61.88 | $ 61.88 |
[1] No prior year comparative financial statements have been provided as this is the first fiscal year of the Trust’s operations. Annualized. Calculated using average Shares outstanding. |