10-Q: Bitwise Bitcoin ETF Reports Q1 2025 Results: Bitcoin Price Depreciation Impacts Net Assets

Sentiment:

Quarterly Report 12 May 2025 11:31 AM

Bitwise Bitcoin ETF's Q1 2025 results reveal a decrease in net assets primarily due to bitcoin price depreciation, despite continued operations and share transactions.

Worse than expectedThe net assets decreased from $3,762.039 million to $3,132.666 million.The Principal Market NAV per share decreased from $50.85 to $44.87.The net decrease in net assets resulting from operations was approximately $453,220.

Summary

Bitwise Bitcoin ETF reported its financial results for the quarter ended March 31, 2025.
The ETF's net assets decreased to $3,132.666 million, primarily due to a depreciation in the price of bitcoin.
The Principal Market NAV per share decreased by 11.76% during the quarter.
The Trust held 38,003.7680 bitcoin as of March 31, 2025, valued at $3,133.221 million based on the principal market price.
The Sponsor Fee for the quarter was $1.860 million.
There was a net decrease in net assets resulting from operations of $453.220 million.
The ETF experienced net redemptions of shares during the quarter, with a net decrease in shares outstanding of 4,160,000.
The Trust's investment objective is to provide exposure to the value of bitcoin, less the expenses of the Trust's operations.
The Shares of the Trust traded at an average discount, based on closing prices at 4:00 p.m. ET, and an estimated, unaudited, NAV per-share of 0.04% from January 11, 2024 to March 31, 2025.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the report highlights a decrease in net assets and NAV per share due to bitcoin price depreciation, it also emphasizes the continued operation of the Trust and the effectiveness of its disclosure controls. The termination of the Osprey agreement is a mixed signal, as it involved a settlement payment to the Trust, but also indicates a failed acquisition.

Positives

The Trust continues to operate and provide exposure to bitcoin for investors.
The Sponsor has agreed to pay all normal operating expenses of the Trust (except for litigation expenses and other extraordinary expenses) out of the Sponsor Fee.
The Trust's disclosure controls and procedures were effective in causing material information relating to the Trust to be recorded, processed, summarized and reported by management of the Sponsor on a timely basis and to ensure the quality and timeliness of the Trusts public disclosures with the SEC.

Negatives

The ETF's net assets decreased due to bitcoin price depreciation.
The Principal Market NAV per share decreased by 11.76% during the quarter.
The ETF experienced net redemptions of shares during the quarter.
The Shares of the Trust traded at an average discount, based on closing prices at 4:00 p.m. ET, and an estimated, unaudited, NAV per-share of 0.04% from January 11, 2024 to March 31, 2025.

Risks

The value of the Shares depends on the acceptance of bitcoin and blockchain technologies.
The unregulated nature and lack of transparency surrounding the operations of blockchain technologies and crypto assets may adversely affect the value of bitcoin and the Shares.
The Shares may trade at a price that is at, above or below the Trust's NAV per-share.
Changes in laws or regulations may affect the value of the Shares or restrict the use of bitcoin.
The Trust relies on the security, stability, and performance of its service providers.
General economic, market and business conditions, and political developments could negatively impact the value of the Trust's holdings in bitcoin and significantly disrupt its operations.
Substantially all the Trust's assets are holdings of bitcoin, which creates a concentration risk associated with fluctuations in the price of bitcoin.

Future Outlook

The Trust's future performance is subject to the risks and uncertainties associated with bitcoin and the broader crypto asset market, as well as general economic and market conditions.

Industry Context

The performance of the Bitwise Bitcoin ETF is directly tied to the price of bitcoin, making it susceptible to the volatility and trends of the cryptocurrency market. The ETF operates within a competitive landscape of other bitcoin ETFs and investment vehicles, each vying for investor capital and market share.

Comparison to Industry Standards

The Bitwise Bitcoin ETF operates similarly to other spot bitcoin ETFs, such as those offered by BlackRock (IBIT), Fidelity (FBTC), and Ark Invest (ARKB).
These ETFs all aim to provide investors with exposure to bitcoin without the need to directly hold the cryptocurrency.
Key differentiators among these ETFs include expense ratios, trading volumes, and the specific methodologies used to value bitcoin.
The average discount of 0.04% from January 11, 2024 to March 31, 2025 is within the range of premiums and discounts observed in other similar ETFs.

Related Party Transactions

The Trust pays a Sponsor Fee of 0.20% per annum of the Trust's bitcoin holdings to Bitwise Investment Advisers, LLC.
The Sponsor has agreed to pay all normal operating expenses of the Trust (except for litigation expenses and other extraordinary expenses) out of the Sponsor Fee.

Stakeholder Impact

Shareholders experienced a decrease in the value of their shares due to bitcoin price depreciation.
Authorized Participants experienced redemptions of shares during the quarter.
The Sponsor continues to receive fees for managing the Trust.

Key Dates

Date	Description
August 29, 2019	Bitwise Bitcoin ETF organized under Delaware law.
November 9, 2023	BAM purchased 4 Shares at a per-share price of $ 50.00 for $ 200 in a transaction exempt from registration under Section 4(a)(2) of the 1933 Act (the Seed Shares).
January 5, 2024	Bitwise Investment Manager, LLC (BIM), an affiliate of the Sponsor, purchased 10,010 Shares of the Trust at a per-share price of $ 50.00 for $ 500,500.
January 10, 2024	Commencement of operations; BAM redeemed the entirety of its 4 initial Seed Shares for $ 200 and BIM redeemed the entirety of its 10,010 Shares for $ 500,500; Trust formally revised its NAV per share from $ 50.00 per share to $ 25.00 per share; BIM purchased the initial 100,000 Shares of the Trust (the Seed Baskets) for $ 2,500,000, at $ 25.00 per share.
January 11, 2024	Shares of the Trust were listed on the Exchange; BIM sold all of its 100,000 Shares of the Trust for cash.
January 11, 2024	Six-month period commencing on January 11, 2024, the day the Shares were initially listed on the Exchange, the Sponsor waived the entire Sponsor Fee on the first $ 1 billion of Trust assets through July 10, 2024.
July 11, 2024	Sponsor Fee has been accruing daily, since July 11, 2024, and is payable in bitcoin monthly in arrears.
August 26, 2024	The Trust, the Sponsor, Osprey Bitcoin Trust (the Osprey Trust) and Osprey Funds, LLC, the sponsor of the Osprey Trust (Osprey), entered into that certain Asset Purchase and Contribution Agreement (the APA).
August 30, 2024	As previously disclosed in the Trusts Current Report on Form 8-K filed with the SEC on August 30, 2024, the Trust, the Sponsor, Osprey Bitcoin Trust (the Osprey Trust) and Osprey Funds, LLC, the sponsor of the Osprey Trust (Osprey), entered into that certain Asset Purchase and Contribution Agreement (the APA) on August 26, 2024.
December 31, 2024	End of the fiscal year.
February 10, 2025	The APA was terminated following the payment by Osprey Trust and Osprey to the Trust and the Sponsor of an undisclosed settlement amount set forth in a separate settlement agreement by and among Osprey Trust, Osprey, the Trust, and the Sponsor.
February 14, 2025	As previously disclosed in the Trusts Current Report on Form 8-K filed with the SEC on February 14, 2025, on February 10, 2025, the APA was terminated following the payment by Osprey Trust and Osprey to the Trust and the Sponsor of an undisclosed settlement amount set forth in a separate settlement agreement by and among Osprey Trust, Osprey, the Trust, and the Sponsor.
March 18, 2025	Trust's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 18, 2025.
March 28, 2025	Amendment No. 1 to Annual Report on Form 10-K/A filed with the SEC on March 28, 2025.
March 31, 2025	End of the reporting period for this 10-Q filing.
May 9, 2025	The registrant had 70,860,000 outstanding shares as of May 9, 2025.
May 12, 2025	Date of the filing of this 10-Q report.

Keywords

Bitwise Bitcoin ETF, Bitcoin, ETF, Net Assets, Sponsor Fee, Redemptions, NAV, Crypto, Shares

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