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Creations and Redemptions of Shares
 2 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Creations and Redemptions of Shares

5. Creations and Redemptions of Shares

At September 30, 2024, there were an unlimited number of Shares authorized by the Trust. The Trust creates and redeems Shares from time to time, but only in one or more Baskets. The creation and redemption of Baskets on behalf of investors are made by the Authorized Participant in exchange for the delivery of Bitcoin to the Trust or the distribution of Bitcoin by the Trust. The amount of Bitcoin required for each Creation Basket or Redemption Basket is determined by dividing (x) the amount of Bitcoin owned by the Trust at 4:00 p.m., New York time, on such trade date of a creation or redemption order, after deducting the amount of Bitcoin representing the U.S. dollar

value of accrued but unpaid fees and expenses of the Trust, by (y) the number of Shares outstanding at such time and multiplying the quotient obtained by 10,000. Each Share represented approximately 0.0001 of one Bitcoin at September 30, 2024.

The cost basis of investments in Bitcoin recorded by the Trust is the fair value of Bitcoin, as determined by the Trust, at 4:00 p.m., New York time, on the date of transfer to the Trust by the Authorized Participant, or Liquidity Provider, based on the Creation Baskets. The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of each Share to investors. The Authorized Participant or Liquidity Provider may realize significant profits buying, selling, creating, and redeeming Shares as a result of changes in the value of Shares or Bitcoin.

On May 28, 2024, NYSE Arca filed an application with the SEC pursuant to Rule 19b-4 under the Exchange Act to list the Shares of the Trust on NYSE Arca. On March 12, 2024, the Sponsor filed with the SEC a registration statement on Form S-1, as amended through July 29, 2024, to register the Shares of the Trust under the Securities Act of 1933. On July 26, 2024, the SEC approved NYSE Arca’s 19b-4 application to list the Shares of the Trust on NYSE Arca as an exchange-traded product and on July 31, 2024, the Sponsor authorized the commencement of a redemption program once the registration statement on Form S-1, as amended, was declared effective.

 

 

 

July 31, 2024 (the commencement of the Trust’s operations) to September 30, 2024

 

Activity in Number of Shares Issued and Redeemed:

 

 

 

Shares issued

 

 

81,590,000

 

Shares issued from Initial Distribution(1)

 

 

303,690,100

 

Shares redeemed

 

 

(4,640,000

)

Net Change in Number of Shares Issued and Redeemed

 

 

380,640,100

 

 

(Amounts in thousands)

 

July 31, 2024 (the commencement of the Trust’s operations) to September 30, 2024

 

Activity in Value of Shares Issued and Redeemed:

 

 

 

Shares issued

 

$

443,672

 

Shares issued from Initial Distribution(1)

 

 

1,756,821

 

Shares redeemed

 

 

(23,283

)

Net Change in Value of Shares Issued and Redeemed

 

$

2,177,210

 

 

(1)
Represents the impact of the Initial Distribution of 26,935.83753443 Bitcoin, with a value of approximately $1,756.8 million from Grayscale Bitcoin Trust (BTC), completed on July 31, 2024, as discussed in Note 4.

 

Bitcoin receivable represents the value of Bitcoin covered by contractually binding orders for the creation of Shares where the Bitcoin has not yet been transferred to the Trust’s account. Generally, ownership of the Bitcoin is transferred within no more than two business days of the trade date.

 

(Amounts in thousands)

 

As of September 30, 2024

 

Bitcoin receivable

 

$

-

 

 

Bitcoin payable represents the value of Bitcoin covered by contractually binding orders for the redemption of Shares where the Bitcoin has not yet been transferred out of the Trust’s account. Generally, ownership of the Bitcoin is transferred within no more than two business days of the trade date.

 

(Amounts in thousands)

 

As of September 30, 2024

 

Bitcoin payable

 

$

-