10-Q: ARK 21Shares Bitcoin ETF Reports Q1 2025 Results: Bitcoin Price Depreciation Impacts Net Assets

ARK 21Shares Bitcoin ETF's Q1 2025 results reveal a decrease in net assets primarily due to bitcoin price depreciation, despite an increase in shares outstanding.

Summary

• ARK 21Shares Bitcoin ETF reported its financial results for the quarter ended March 31, 2025.
• The ETF's net assets decreased from $4,352,288,000 at the end of 2024 to $3,915,458,000 as of March 31, 2025.
• This decrease was primarily driven by a decline in the price of bitcoin.
• The ETF held 47,501.0671 bitcoins as of March 31, 2025, valued at $3,916,212,000.
• The net asset value per share decreased from $93.22 to $82.25 during the quarter.
• The ETF experienced a net decrease in net assets resulting from operations of $587,548,000.
• The Sponsor Fee for the quarter was $2,367,167, net of waivers.
• The ETF had 47,605,000 shares outstanding as of March 31, 2025, compared to 46,690,000 at the end of 2024.
• The ETF is an emerging growth company and intends to take advantage of the extended transition period for complying with new or revised accounting standards.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the decrease in net assets and NAV per share, driven by bitcoin price depreciation. However, the ETF continues to operate and maintain disclosure controls.

Positives

• The ETF continues to operate as a grantor trust for U.S. federal income tax purposes, meaning the trust itself is not subject to U.S. federal income tax.
• The ETF maintains disclosure controls and procedures to ensure accurate financial reporting.
• The ETF had a net increase of 915,000 shares issued during the quarter.

Negatives

• The ETF experienced a significant decrease in net assets due to bitcoin price depreciation.
• The net asset value per share decreased during the quarter.
• The ETF reported a net investment loss of $2.37 million for the quarter.
• The ETF's investment strategy is concentrated in a single asset (bitcoin), maximizing exposure to market risks.

Risks

• The ETF is subject to the risks associated with bitcoin and digital assets, including price volatility.
• The ETF's concentrated investment strategy exposes it to a higher degree of market risk.
• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.

Future Outlook

The report includes forward-looking statements related to future events, market movements, and the Trust's operations, all of which are subject to risks and uncertainties.

Management Comments

• The duly authorized officers of the Sponsor have evaluated the effectiveness of the Trusts disclosure controls and procedures, and have concluded that the disclosure controls and procedures of the Trust were effective as of the end of the period covered by this report.

Industry Context

The performance of the ARK 21Shares Bitcoin ETF is directly tied to the price of bitcoin, making it susceptible to the volatility and trends of the cryptocurrency market.

Comparison to Industry Standards

• The ARK 21Shares Bitcoin ETF competes with other Bitcoin ETFs such as BlackRock's iShares Bitcoin Trust (IBIT), Fidelity's Wise Origin Bitcoin Fund (FBTC), and Grayscale Bitcoin Trust (GBTC).
• The 0.21% sponsor fee is competative with other Bitcoin ETFs.
• The ETF's performance is benchmarked against the CME CF Bitcoin Reference Rate New York Variant, which is a common benchmark for Bitcoin ETFs.

Stakeholder Impact

• Shareholders experienced a decrease in the value of their shares due to bitcoin price depreciation.
• Authorized Participants engaged in creation and redemption activities, impacting the number of shares outstanding.

Key Dates

Keywords

Bitcoin ETF, ARK 21Shares, Cryptocurrency, ETF, Bitcoin, ARKB