CoinShares Bitcoin ETF Trust

Structure and purpose

• The Trust is a Delaware statutory trust organized to operate as an exchange-traded fund (ETF) providing exposure to bitcoin.
• Listed on Nasdaq, the Trust issues Shares that represent units of beneficial interest. Shares are created and redeemed in Baskets of 5,000 Shares, based on the bitcoin attributable to each Share (net of expenses and liabilities).
• The Trust began operations on January 11, 2024. Its fiscal year ends on December 31.

Investment objective

• Primary objective: reflect the performance of bitcoin as represented by the CME CF Bitcoin Reference Rate – New York Variant (the Index), minus the Trust’s liabilities and expenses.
• The Trust holds bitcoin to achieve this objective and values its Shares daily using the Index.

Sponsor and governance

• Sponsor: CoinShares Co. (Delaware corporation) became co-sponsor on March 15, 2024 and succeeded Valkyrie Digital Assets LLC as sponsor on June 14, 2024.
• The Trust is governed by an Amended and Restated Trust Agreement among the Trustee, the Sponsor, and shareholders, as amended over time.
• Shares are issued and redeemed in Baskets and traded on Nasdaq. There is an unlimited number of Authorized Shares.

Key participants and service providers

• Custodians (hold the Trust’s bitcoin):
  • Coinbase Custody Trust Company, LLC
  • BitGo Trust Company, Inc.
  • Komainu (Jersey) Limited
• Prime Broker: Coinbase Inc. (affiliate of Coinbase)
• Cash custodian: U.S. Bank, N.A. (affiliate of the Transfer Agent/Administrator)
• Bitcoin trading counterparties approved by the Sponsor as of January 31, 2026:
  • BitGo Prime LLC
  • Coinbase Inc.
  • Cumberland DRW LLC
  • JSCT LLC
  • Foris DAX, Inc.
  • Payward Inc. dba Kraken
• Market/distribution support: Paralel Distributors LLC (Marketing Agent)
• Transfer agent/administrator: U.S. Bank Service Company, LLC (via U.S. Bank entities)
• The Trust may engage additional counterparties as needed.

Valuation and index methodology

• Index: CME CF Bitcoin Reference Rate – New York Variant (BRR NY variant) is used to determine the Bitcoin Index Price and the Trust’s Bitcoin Holdings per Share.
• The Index aggregates notional bitcoin trading activity across major spot exchanges and is administered by CF Benchmarks Ltd.
• Calculation timing: the Index is calculated as of 4:00 p.m. ET; the Trust uses the 4:00 p.m. ET Bitcoin Index Price to value bitcoin holdings.
• If the Index is unavailable or deemed unreliable (a Fair Value Event), the Trust may fair value holdings under sponsor-approved policies.
• The Sponsor may change the Index methodology or substitute an alternative pricing methodology with notice to shareholders.

Creation and redemption mechanics

• Baskets: 5,000 Shares per Basket; creation and redemption are cash-only (Cash Creation Order / Cash Redemption Order).
• Authorized Participants (APs) generally must place purchase orders by 2:00 p.m. ET or the close of regular trading on Nasdaq, whichever is earlier.
• APs deposit cash via the Cash Custodian; the Trust uses cash proceeds to acquire bitcoin and deposit it into Vault Accounts at the Custodians.
• Settlement between the Trust and APs occurs via netting of DTC accounts and typically completes by the end of the following business day.
• APs help align market price with Bitcoin Holdings per Share through creation/redemption activity; delays or operational issues can affect arbitrage effectiveness.

Custody and security

• Bitcoin held by the Trust is stored across Vault Accounts at the Custodians. A portion may be held in Trading Accounts with the Prime Broker or Bitcoin Trading Counterparties to facilitate creation/redemption activity or to pay sponsor fees.
• The Trust’s bitcoin is not leased, loaned, or used as collateral for loans or rehypothecated.
• Custodians’ liability is limited under their custody agreements. The Trust faces risks of loss from theft, security breaches, or insolvency of custodians or the Prime Broker.
• The Trust employs blockchain security controls (private keys, multi-signature arrangements, etc.), but risks remain, including potential loss of access to keys or unauthorized transfers.

Fees and expenses

• Sponsor-paid expenses: the Sponsor has agreed to pay a broad set of ongoing expenses (Marketing Fee, Administrator Fee, Custodian Fee, Cash Custodian Fee, Prime Broker Fee, Transfer Agent Fee, Trustee’s fee, licensing fees, Nasdaq-related costs, etc.) with no stated cap. Some expenses may be redesignated as Additional Trust Expenses at the Sponsor’s discretion.
• Extraordinary expenses: certain extraordinary services or events may be paid by the Trust as Additional Trust Expenses, which could reduce the Trust’s bitcoin holdings over time.
• The Sponsor may adjust the Sponsor’s Fee or sponsor-paid expenses if needed; there is no current intent to change fees.

Tax status

• The Sponsor intends to treat the Trust as a grantor trust for U.S. federal income tax purposes. The Trust itself would not pay federal income tax; gains and losses would flow through to beneficial owners.
• A sale of bitcoin by the Trust or delivery of bitcoin to pay sponsor fees would be a taxable event to shareholders.
• There is substantial tax uncertainty surrounding bitcoin (including issues such as hard forks and airdrops). Shareholders should consult tax professionals.

Investment scope and risk profile

• The Trust offers concentrated, single-asset exposure to bitcoin and aims to track bitcoin’s price via the Index, net of expenses.
• The Trust is not actively managed and does not employ hedging or tactical programs to offset volatility.
• Key risks include extreme bitcoin volatility, regulatory developments (including pending legislation and enforcement actions), forks/airdrops, cyber threats, mining and custody risks, liquidity risks at exchanges, and potential market manipulation or fraud in the bitcoin ecosystem.
• The Trust’s value can be materially influenced by changes in regulatory regimes, security incidents, mining economics, energy costs, and broader macro factors affecting bitcoin demand and supply.

Regulatory and fiduciary framework

• The Trust is not registered under the Investment Company Act and is not treated as a commodity pool; it is not regulated in the same way as traditional registered funds.
• U.S. and foreign regulatory developments (SEC, CFTC, FinCEN, NYDFS BitLicensing, and other regimes) may affect the Trust’s operations and the bitcoin market.
• The Trust may be terminated or dissolved if required regulatory registrations are not obtained or if regulatory environments become prohibitive.

Potential conflicts and governance

• Potential conflicts of interest exist between the Sponsor (and its affiliates) and the Trust/shareholders, including related-party arrangements and non-arm’s-length management decisions.
• Affiliates of the Sponsor may hold, trade, or invest in bitcoin, which could influence the Bitcoin Index Price or other outcomes.
• Prime Broker and Custodians have their own conflict-of-interest risks, including dual roles (for example, Coinbase acting as both custodian and broker) and potential incentive misalignment.

Key numerical details

• Bitcoin mined as of January 31, 2026: approximately 19.96 million (global supply around 19.97 million as of that date; total supply capped at 21 million).
• Block reward: 3.125 BTC per block as of April 2024; block rewards halve roughly every four years. The next expected halving is in 2028.
• Authorized Shares: unlimited.
• Basket size: 5,000 Shares per Basket.
• Approved Bitcoin Trading Counterparties as of January 31, 2026: BitGo Prime LLC, Coinbase Inc., Cumberland DRW LLC, JSCT LLC, Foris DAX, Inc., and Payward Inc. dba Kraken.
• Pricing framework: BRR-based pricing with a 4:00 p.m. ET valuation cut-off for NAV calculations.

Important disclosures

• There is no guarantee of an active trading market for Shares.
• The Trust may incur substantial costs from regulatory changes, custody or market failures, or other operational issues.
• The Trust’s performance may diverge from the broader bitcoin market due to pricing deltas, non-concurrent trading hours, or changes in methodology.