United States securities and exchange commission logo
January 5, 2024
Jeremy Schwartz
Chief Executive Officer
WisdomTree Bitcoin Trust
c/o WisdomTree Digital Commodity Services, LLC
250 West 34th Street, 3rd Floor
New York, New York 10119
Re: WisdomTree Bitcoin
Trust
Amendment No. 5 to
Registration Statement on Form S-1
Filed December 29,
2023
File No. 333-254134
Dear Jeremy Schwartz:
We have reviewed your amended registration statement and have the
following
comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies to your
facts and circumstances
or do not believe an amendment is appropriate, please tell us why in
your response.
After reviewing any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Unless we note otherwise,
any references to prior comments are to comments in our December 27,
2023 letter.
Amendment No. 5 to Registration Statement on Form S-1
General
1. We note that you are
registering an indeterminate number of securities in accordance with
Rules 456(d) and
457(u). Please update your EDGAR header tags accordingly.
2. We note that your
registration statement includes a number of blanks or bracketed
information, including,
for example, the initial Authorized Participant and the amount of
the Sponsor Fee. Please
revise to include this information in your next amendment.
Cover Page
3. We note the disclosure
on the cover page regarding the Seed Capital Investor and the
initial Authorized
Participant. Please revise to clearly identify the purchaser(s) of the
Jeremy Schwartz
WisdomTree Bitcoin Trust
January 5, 2024
Page 2
initial baskets, including the Seed Capital Investor and the initial
Authorized Participant,
and identify each such purchaser as a statutory underwriter.
4. We note your cover page disclosure that "[s]ubject to the Exchange
receiving the
necessary regulatory approval to permit the Trust to create and redeem
Shares in-kind for
bitcoin (the 'In-Kind Regulatory Approval') these transactions may
also take place in
exchange for bitcoin." We have the following comments:
Please revise to clarify here that the timing of In-Kind
Regulatory Approval is
unknown and that there is no guarantee that the Exchange will
receive In-Kind
Regulatory Approval.
Please revise your prospectus disclosure to clarify how you will
inform Shareholders
if the Exchange receives In-Kind Regulatory Approval and if the
Sponsor chooses to
allow in-kind creations and redemptions.
Please confirm your understanding, consistent with the undertaking
required by Item
512(a)(1)(iii) of Regulation S-K, that you will file a
post-effective amendment to
include any material information with respect to the plan of
distribution not
previously disclosed in the registration statement or any
material change to such
information.
Bitcoin, Bitcoin Market, Bitcoin Exchanges and Regulation of Bitcoin
Bitcoin Protocol, page 51
5. Please revise this section, the risk factor on page 45, and throughout
the prospectus to
clarify, if true, that with respect to any fork, airdrop or similar
event, the Sponsor will
cause the Trust to irrevocably abandon the Incidental Rights or IR
Virtual Currency and in
the event the Trust seeks to change this position, an application
would need to be filed
with the SEC by your listing exchange seeking approval to amend its
listing rules. Please
also revise to clarify, if true, that the only crypto asset to be held
by the Trust will be
bitcoin.
Calculation of NAV, page 59
6. Refer to your responses to comment 7 in our September 29, 2023 letter
and related
subsequent comments. We note your revised disclosure that the Trust will
only allow cash
redemptions, and observe that this change may have an impact on your
fair value
accounting policy, including principal market determination under ASC
Topic 820. Please
confirm your understanding that our decision not to issue additional
comments should not
be interpreted to mean that we either agree or disagree with your
responses and your
FirstName LastNameJeremy Schwartz
current fair value accounting policy. Please also confirm your
understanding that we may
Comapany NameWisdomTree
comment further on thisBitcoin Trust
matter in future filing reviews once the Trust
is operational.
January 5, 2024 Page 2
FirstName LastName
Jeremy Schwartz
FirstName LastNameJeremy
WisdomTree Bitcoin Trust Schwartz
Comapany
January NameWisdomTree Bitcoin Trust
5, 2024
January
Page 3 5, 2024 Page 3
FirstName LastName
Custody of the Trust's Assets and Certain Other Operational Matters, page 65
7. We note your response to prior comment 10 and re-issue. We were unable
to locate your
revised disclosure. Please revise to disclose how and when the Bitcoin
Custodian is
directed to transfer the bitcoin from the Cold Vault Balance to the
Hot Vault Balance or
from the Hot Vault Balance to the Cold Vault Balance in connection
with (i) receipt and
delivery of bitcoin from and to third parties, (ii) selling bitcoin to
pay the Trust's expenses
and liabilities, and (iii) paying the Sponsor Fee.
Prime Execution Agent, page 67
8. We note your response to prior comment 8 and re-issue in part. Please
revise to disclose
how the Prime Execution Agent will be compensated.
Trade Credit Lender, page 68
9. Please reconcile your disclosure here that "[t]o secure the repayment
of Trade Credits, the
Trust has granted a first-priority lien to the Trade Credit Lender
over the assets in its
Trading Balance and Vault Balance," and on page 37 that "[i]f the
Trust fails to repay the
Trade Credits to the Trade Credit Lender on time and in full, the
Trade Credit Lender can
take control of the Trust s assets and liquidate them to repay the
Trade Credit debt owed
by the Trust to the Trade Credit Lender," with your representations
throughout the
registration statement that neither the Trust, the Sponsor, nor any
other entity is permitted
to lend, pledge, hypothecate or rehypothecate any of the Trust s
bitcoin.
10. Please revise to quantify or otherwise describe the maximum amount of
Trade Credit that
the Trade Financing Agreement permits to be outstanding at any one
time. Please also
disclose whether the intention is to generally fund the Trading
Balance at the Prime
Execution Agent with sufficient cash or bitcoin or whether it
regularly expects to utilize
the Trade Financing Agreement. In addition, to the extent the
execution price of the
bitcoin acquired exceeds the cash deposit amount, disclose who bears
the responsibility
for this difference. Further, for creation and redemption
transactions, please revise to
clarify whether or not the interest payable on Trade Credits utilized
under the Trade
Financing Agreement are included in the execution price and therefore
the responsibility
of the Authorized Participants. If they are the responsibility of the
Trust, please revise
your risk factor disclosure accordingly to explain the impact such
interest payments will
have on the net assets of the Trust over time.
Plan of Distribution, page 69
11. We refer you to comment 38 of our letter dated December 6, 2023.
Please identify by
name all of the Authorized Participants with which you have an
agreement at the time of
effectiveness of the registration statement.
Jeremy Schwartz
FirstName LastNameJeremy
WisdomTree Bitcoin Trust Schwartz
Comapany
January NameWisdomTree Bitcoin Trust
5, 2024
January
Page 4 5, 2024 Page 4
FirstName LastName
Creation and Redemption of Shares, page 70
12. We note your response to prior comment 13 and re-issue in part. Please
revise to disclose
how the amount of cash required for a creation order is calculated.
13. We note your disclosure that the Trust will purchase bitcoin in
connection with
creation orders and that the Prime Execution Agent will sell bitcoin
for cash in connection
with redemption orders. Please revise your disclosure to specifically
identify the party or
parties that will buy and sell bitcoin for the Trust and identify the
Prime Execution Agent.
Please contact Kate Tillan at 202-551-3604 or Michelle Miller at
202-551-3368 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Lulu Cheng at 202-551-3811 or Sandra Hunter Berkheimer at 202-551-3758
with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Crypto
Assets
cc: Todd Zerega