10-K: Bitwise Bitcoin ETF Reports 2025 Net Asset Decline Amid Bitcoin Price Dip

Bitwise Bitcoin ETF (BITB) reported a net asset decrease of $394.989 million in 2025, driven by a 6.45% decline in its Principal Market NAV per Share as bitcoin depreciated.

Summary

• The Trust's net assets decreased to approximately $3.367 billion as of December 31, 2025, from $3.762 billion at December 31, 2024.
• The Principal Market NAV per Share decreased by 6.45% for the year ended December 31, 2025, closing at $47.57, compared to $50.85 at December 31, 2024.
• The bitcoin BRRNY price depreciated from $93,730.35 per bitcoin on December 31, 2024, to $87,315.53 per bitcoin on December 31, 2025.
• Net investment loss for 2025 was $8.132 million, up from $3.671 million in 2024, primarily due to the expiration of the Sponsor Fee waiver on July 10, 2024.
• The Trust experienced a net change in unrealized depreciation on investment in bitcoin of $299.207 million in 2025, contrasting with a net change in unrealized appreciation of $1.639 billion in 2024.
• Total Shares outstanding decreased from 73,980,000 at December 31, 2024, to 70,780,000 at December 31, 2025.
• The Trust's investment objective is to provide shareholders with exposure to the value of bitcoin held by the Trust, less operational expenses and liabilities, using the CME CF Bitcoin Reference Rate New York Variant (BRRNY) for NAV calculation.
• The Trust operates under a passive management strategy, meaning the Sponsor does not actively manage bitcoin holdings or employ hedging techniques.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing as slightly negative due to the reported financial decline in net assets and NAV per share for 2025, directly reflecting the depreciation of bitcoin. While regulatory clarity improved for the broader crypto industry, the Trust's direct performance was unfavorable for the reported year.

Positives

• The Trust maintained effective internal control over financial reporting as of December 31, 2025, as affirmed by KPMG LLP.
• The SEC formally dismissed its lawsuit against Coinbase Global (parent company of the Bitcoin Custodian and Prime Execution Agent) in February 2025, reducing regulatory uncertainty for a key service provider.
• The SEC also closed its inquiry into PayPal USD stablecoin in February 2025 without enforcement action, and dismissed claims that BUSD was a security in June 2024, indicating a potential shift towards clearer regulatory frameworks for digital assets.
• The SEC's approval of multiple spot Bitcoin ETFs in January 2024 and spot Ethereum ETFs in July 2024, including Bitwise trusts, signals increasing mainstream acceptance and regulatory clarity for crypto-based investment products.

Negatives

• The Trust experienced a net decrease in net assets of $394.989 million for the year ended December 31, 2025, primarily due to bitcoin price depreciation.
• The Principal Market NAV per Share declined by 6.45% in 2025, reflecting the decrease in the fair value of bitcoin holdings.
• Net investment loss increased to $8.132 million in 2025 from $3.671 million in 2024, largely due to the expiration of the Sponsor Fee waiver.
• The Trust recorded a significant net change in unrealized depreciation on investment in bitcoin of $299.207 million in 2025, a reversal from the appreciation seen in 2024.
• The Trust's reliance on a limited number of Authorized Participants and service providers, particularly Coinbase entities, exposes it to concentration risks and potential operational disruptions.
• Shareholders have limited statutory rights, and the Trust Agreement can be amended without their direct consent, potentially altering fees or rights.

Risks

• Extreme volatility of bitcoin trading prices, which could lead to substantial or total loss of Share value.
• Uncertain medium-to-long term value of Shares due to the nascent and rapidly evolving nature of blockchain technologies and digital assets.
• Fluctuations in bitcoin supply influenced by energy consumption, environmental regulations, and mining restrictions, potentially affecting network security and value.
• Significant scaling challenges within the Bitcoin network, which may lead to higher fees or slower transaction settlement times.
• Increased risk of criminal or civil liability for businesses facilitating bitcoin transactions if the Bitcoin network is used for illicit activities.
• Potential adverse effects on Share value from a temporary or permanent fork of the Bitcoin blockchain.
• Shareholders may not receive the benefits of any forks or airdrops, as the Trust explicitly disclaims Incidental Rights and IR Assets.
• The prevailing level of transaction fees may adversely affect the usage and attractiveness of the Bitcoin network.
• Risk of a malicious actor or botnet obtaining control of more than 50% of the Bitcoin network's processing power, manipulating data recording.
• Exposure of digital asset trading platforms to fraud and market manipulation, including wash trading and cyberattacks.
• Irrevocable nature of Bitcoin blockchain-recorded transactions, making incorrect transfers or thefts generally irreversible.
• Loss or destruction of a private key required to access bitcoin, potentially leading to a partial or total loss of the Trust's bitcoin holdings.
• Disruption of the internet affecting Bitcoin network operations and the value of an investment in the Shares.
• Decentralized governance of the Bitcoin network and potential amendments to its protocols and software, which could negatively impact performance.
• Competition from new digital assets, Central Bank Digital Currencies (CBDCs), and emerging payment initiatives from financial institutions.
• Impact of stablecoins (e.g., Tether, USDC), their activities, and regulatory treatment on the price of bitcoin.
• Scheduled creation of newly mined bitcoin and their subsequent sale potentially causing price declines.
• Limited history and methodological risks of the BRRNY, BRR, and CME Bitcoin Real Time Price, leading to potential inaccuracies in bitcoin prices.
• Investing in bitcoin through the Trust is speculative and involves a high degree of risk, including the potential loss of the entire investment.
• Limited history and potential illiquidity in bitcoin markets may exacerbate losses and increase variability between the Trust's NAV and bitcoin's market price.
• Buying and selling activity from Basket purchases and redemptions, along with potential suspension or rejection of orders, may adversely affect liquidity and Share value.
• Shareholders do not have statutory shareholder rights, and amendments to the Trust Agreement or Sponsor Agreement may occur without shareholder consent.
• Heavy reliance on the Sponsor, whose limited staffing, potential discontinuance, and conflicts of interest could adversely impact management and stability.
• Security threats and cyber-attacks could result in halting Trust operations, loss of assets, or damage to reputation.
• Reliance on service providers (Bitcoin Custodian, Cash Custodian, Prime Execution Agent) and their operational failures, conflicts of interest, and regulatory actions.
• Evolving regulatory frameworks for digital assets, potentially impacting bitcoin's classification, compliance requirements, and valuation strategies.
• Regulatory changes rendering bitcoin ownership illegal, forcing involuntary termination and liquidation of the Trust.
• Risk of the Trust or Sponsor being regulated as a money service business or money transmitter, incurring extraordinary expenses and decreased liquidity.
• Compliance with privacy, data protection, and cybersecurity laws, with potential for material negative effects from non-compliance.
• The IRS may disagree with or challenge the Trust's treatment as a grantor trust for U.S. federal income tax purposes.
• Shareholders could incur a tax liability from forks or airdrops without an associated distribution from the Trust.
• Changes in the U.S. federal income tax treatment of bitcoin and transactions involving bitcoin.
• Unsettled state and local tax treatment of bitcoin and transactions.
• International regulatory divergence affecting global acceptance and liquidity of digital assets.
• The Exchange may halt trading in the Shares, adversely impacting an investor's ability to sell.
• Lack of independent advisers representing investors in the Trust.
• Limited legal recourse against the Trust and its service providers, and lack of direct insurance protection for bitcoin losses.
• Risks associated with the use of Trade Credits under the Agent Execution Model, including delayed transactions and potential liquidation of Trust assets.
• Loss of a critical banking relationship for, or the failure of a bank used by, the Prime Execution Agent could impact the Trust's ability to create or redeem Baskets.
• Third parties may infringe upon or assert intellectual property rights, resulting in significant costs and diverted attention.
• Risks related to pandemics, epidemics, and other natural and man-made disasters, potentially impacting holdings and operations.

Future Outlook

The Trust's future performance is inherently tied to the volatile price of bitcoin and the evolving regulatory landscape for digital assets. The Sponsor may, in its sole discretion, change the pricing index used for the Trust's portfolio if investment conditions change or if another index better aligns with the Trust's investment objective, with prior notice to Shareholders. The Sponsor does not anticipate significant changes to the Trust's liquidity needs and expects immaterial cash flow from operations. While the Trust may transition to in-kind creations and redemptions if regulatory approvals are obtained, there is no guarantee of such approvals or their timing. The regulatory environment for digital assets remains uncertain, with ongoing legislative efforts and potential for new laws or interpretations that could impact the Trust's operations, compliance requirements, and the value of its Shares. The Bitcoin network is expected to continue facing scaling challenges, and the block reward for mining bitcoin is scheduled to halve again in mid-2028, which could affect bitcoin's price dynamics. The Trust does not foresee any subsequent events requiring financial statement adjustments or disclosures as of March 2, 2026.

Management Comments

• "The Trust's investment objective is to seek to provide shareholders of the Trust (Shareholders) with exposure to the value of bitcoin held by the Trust that is reflective of the actual bitcoin market in which investors can purchase or sell bitcoin, less the expenses of the Trust's operations and other liabilities."
• "The Sponsor does not believe that the Trust's ability to arrive at such a determination [to limit Share creation] will have a significant impact on the Shares in the secondary market because it believes that the ability to create Shares would be reinstated shortly after such determination is made, and any entity desiring to create Shares would be able to do so once the ability to create Shares is reinstated."
• "The Sponsor does not anticipate that the need to fair value bitcoin will be a common occurrence."
• "The Sponsor expects that the Trust will have an immaterial amount of cash flow from its operations and that its cash balance will be insignificant at the end of each reporting period."
• "The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs."
• "The Sponsor intends to take the position that the Trust is properly treated as a grantor trust for U.S. federal income tax purposes."

Industry Context

StockSavvy.ai notes that the Bitwise Bitcoin ETF's performance in 2025, marked by a decline in net assets and NAV per share, directly reflects the broader depreciation in bitcoin's market price during that period. This highlights the inherent volatility of the digital asset market, a key characteristic of the industry. The filing also underscores the increasing regulatory scrutiny and evolving landscape for digital assets, with significant developments such as the SEC's dismissal of lawsuits against major crypto entities like Coinbase and Binance, and the approval of spot Bitcoin and Ethereum ETFs. These regulatory shifts, while creating initial uncertainty, are ultimately seen as positive steps towards establishing clearer frameworks, potentially fostering greater institutional adoption and market stability for the crypto industry as a whole. However, the ongoing challenges related to bitcoin mining's energy consumption and network scalability remain pertinent industry concerns.

Comparison to Industry Standards

• The Trust's investment objective to provide exposure to bitcoin, less expenses, is standard for spot Bitcoin ETFs, aligning with products from competitors like BlackRock's iShares Bitcoin Trust (IBIT) or Fidelity Wise Origin Bitcoin Trust (FBTC).
• The use of the CME CF Bitcoin Reference Rate New York Variant (BRRNY) for NAV calculation is a recognized industry benchmark, also utilized by other major Bitcoin ETFs for valuation.
• The Sponsor Fee of 0.20% per annum, with an initial waiver on the first $1 billion of assets, is competitive within the spot Bitcoin ETF market, where fees generally range from 0.19% to 0.30% for major players, often with similar waiver structures to attract initial capital.
• The reliance on Coinbase Custody Trust Company, LLC for bitcoin custody is a common practice among leading spot Bitcoin ETFs, leveraging Coinbase's established security measures and market position as a major digital asset custodian.
• The operational model involving Authorized Participants for creation and redemption of Baskets is standard for exchange-traded products, ensuring arbitrage mechanisms to keep the Share price aligned with NAV, similar to traditional ETFs.
• The disclosure of extensive risk factors, including market volatility, regulatory uncertainty, and operational risks, is consistent with industry best practices for digital asset investment vehicles, reflecting the inherent complexities of the crypto market compared to more traditional asset classes.

Management Changes

Corporate Governance

Legal Proceedings

• No current, past, pending, or, to the Sponsor's knowledge, threatened legal proceedings or administrative actions against the Trust or the Sponsor that could have a material effect on business, financial condition, or operations.
• The SEC formally filed a joint stipulation with Coinbase to dismiss the ongoing civil enforcement action in February 2025, marking a shift in the SEC's enforcement approach.
• The SEC filed a joint stipulation to dismiss, with prejudice, the civil enforcement action against Binance entities and founder Changpeng Zhao on May 29, 2025.
• The SEC closed its inquiry into the PayPal USD stablecoin in February 2025 without enforcement action.
• U.S. District Judge Amy Berman Jackson granted a 60-day stay in the SEC's civil lawsuit against Binance in February 2025 to allow for potential resolution.
• U.S. District Judge Analisa Torres issued a final judgment in the SEC's action against Ripple Labs, Inc. in August 2024, ordering Ripple to pay a civil penalty of $125 million for institutional sales of XRP; the SEC appealed this decision in October 2024 and submitted its brief by January 15, 2025.

Related Party Transactions

• The Trust pays a unitary Sponsor Fee of 0.20% per annum of its bitcoin holdings to Bitwise Investment Advisers, LLC (the Sponsor).
• The Sponsor contractually waived the entire Sponsor Fee on the first $1 billion of Trust assets through July 10, 2024.
• Bitwise Asset Management, Inc. (BAM), the parent company of the Sponsor, and Bitwise Investment Manager, LLC (BIM), an affiliate of the Sponsor, were involved in seed capital transactions for the Trust's initial shares.
• The Sponsor and its affiliates, including their officers, directors, and employees, may trade in bitcoin, bitcoin futures, and related derivatives for their own accounts and for other clients, potentially creating conflicts of interest.
• Coinbase Custody Trust Company, LLC (Bitcoin Custodian), Coinbase, Inc. (Prime Execution Agent), and Coinbase Credit, Inc. (Trade Credit Lender) are affiliates of Coinbase Global, Inc., a key service provider to the Trust.
• An affiliate of the Sponsor acts as investment manager to the Circle Reserve Fund, which is used by the issuer of USDC stablecoins, and also holds a minority equity interest in the issuer of USDC.

Stakeholder Impact

• Shareholders: Directly impacted by the Trust's performance, which is tied to bitcoin's price. The 2025 depreciation in bitcoin led to a decrease in NAV per Share and overall net assets, resulting in negative returns for the year. Limited statutory rights mean shareholders rely on the Sponsor's good faith in conflict resolution.
• Sponsor (Bitwise Investment Advisers, LLC): Receives a Sponsor Fee (0.20% per annum of bitcoin holdings), which increased in 2025 due to the expiration of a fee waiver. Bears the responsibility for the Trust's day-to-day administration and normal operating expenses.
• Service Providers (e.g., Coinbase Custody, BNY Mellon): Provide critical operational services to the Trust, receiving fees for their roles. Their stability and performance are crucial for the Trust's operations and asset security. Regulatory actions against these providers, even if resolved, can create uncertainty.
• Regulatory Authorities (SEC, CFTC, FinCEN): The evolving regulatory landscape, including new legislation and enforcement actions, directly impacts the compliance requirements and operational environment for the Trust and the broader digital asset industry. Recent dismissals of lawsuits against major crypto firms may signal a more structured regulatory approach.
• Bitcoin Network Participants (Miners, Developers): The Trust's operations are indirectly affected by the health and development of the Bitcoin network, including scaling challenges, transaction fees, and potential forks. Environmental concerns and regulatory pressures on mining could impact network security and bitcoin's value.

Next Steps

• The Sponsor may, in its sole discretion, cause the Trust to price its portfolio based upon an index, benchmark or standard other than the BRRNY at any time, with prior notice to the Shareholders.
• The Trust would need to seek and obtain certain regulatory approvals, including an amendment to its registration statement and Exchange listing rules, to claim any digital assets resulting from a fork or airdrop (other than bitcoin).
• The Trust would need to seek certain regulatory approvals, including an amendment to the Exchange's listing rules and an amendment to the Trust's Registration Statement, to transition to creating and redeeming Shares in exchange for bitcoin (in-kind transactions).
• The Presidents Working Group on Digital Asset Markets is tasked with proposing a federal regulatory framework for digital assets within 180 days of January 23, 2025.
• The Bitcoin network's block reward is estimated to halve again in mid-2028.

Key Dates

Recommendation

The Bitwise Bitcoin ETF is a passive investment vehicle designed to track the price of bitcoin. The 2025 financial results reflect a decline in bitcoin's value during that period, leading to a negative return for the Trust. However, the filing also highlights positive developments in the regulatory landscape for digital assets, such as the dismissal of major SEC lawsuits against key industry players and the approval of spot Bitcoin ETFs, which could foster long-term stability and adoption. Given the Trust's direct correlation to bitcoin's price and the absence of active management, the recommendation is to 'hold' for investors who maintain a long-term conviction in bitcoin's value proposition, while acknowledging the inherent volatility and regulatory risks of the asset class. The filing does not present new information that would fundamentally alter the investment thesis for or against bitcoin itself, but rather provides a retrospective on its performance and operational context.

Keywords

Bitcoin ETF, BITB, Bitwise Bitcoin ETF, SEC filing, 10-K, Bitcoin, Cryptocurrency, Digital Assets, Exchange Traded Product, NAV, BRRNY, Coinbase Custody, Prime Broker Agreement, Regulatory Risk, Market Volatility, Financial Performance, Investment Trust