10-Q: Bitwise Bitcoin ETF Reports Q3 2024 Results, Net Assets Reach $2.5 Billion

Bitwise Bitcoin ETF (BITB) reports its financial results for the quarter ended September 30, 2024, showcasing significant asset growth and operational performance since its launch in January 2024.

Summary

• Bitwise Bitcoin ETF (BITB) reported its financial results for the quarter ended September 30, 2024.
• The Trust's net assets reached approximately $2.5 billion as of September 30, 2024.
• The Trust commenced operations on January 10, 2024, and the shares were listed on NYSE Arca on January 11, 2024.
• The Trust's investment objective is to provide exposure to the value of bitcoin, less the expenses of the Trust's operations.
• For the three months ended September 30, 2024, the net increase in net assets resulting from operations was approximately $134.2 million.
• This increase was primarily driven by a net realized and unrealized gain on investment in bitcoin of $135.3 million, offset by the Sponsor Fee of $1.1 million.
• For the period from January 10, 2024, to September 30, 2024, the net increase in net assets resulting from operations was approximately $359.8 million.
• This increase was primarily driven by a net realized and unrealized gain on investment in bitcoin of $361.7 million, less the Sponsor Fee of $1.9 million.
• The Trust held 39,435.5408 bitcoin with a total market value of $2,500,633,274 based on the BRRNY price of $63,410.65 as of September 30, 2024.
• The Trust is an emerging growth company and may elect to comply with certain reduced reporting requirements.
• The Trust is pursuing an Asset Purchase Agreement with Osprey Bitcoin Trust, expected to close in the fourth quarter of 2024.

Sentiment

Score: 7

Explanation: The document presents a positive outlook with significant asset growth and operational performance, but also acknowledges the inherent risks associated with bitcoin investments.

Positives

• Significant growth in net assets since the Trust's inception in January 2024.
• Positive net increase in net assets resulting from operations for both the three-month period and the period since inception.
• The Sponsor's fee waiver benefited the Trust in its early stages.
• The planned acquisition of Osprey Bitcoin Trust's assets could further increase the Trust's assets under management.

Negatives

• The Trust is subject to concentration risk as substantially all of its assets are holdings of bitcoin.
• The trading prices of bitcoin have experienced extreme volatility, which could adversely affect the value of the Shares.
• The Shares may trade at a premium or discount to the NAV per share.

Risks

• The Trust is subject to risks associated with the volatility of bitcoin prices.
• Regulatory changes or interpretations could adversely affect the value of the Shares.
• The Trust relies on the security, stability, and performance of its service providers.
• General economic, market, and business conditions could negatively impact the value of the Trust's holdings.
• The Trust's ability to consummate the Asset Purchase with Osprey Bitcoin Trust is subject to certain conditions.

Future Outlook

The Trust and the Sponsor expect the Asset Purchase with Osprey Bitcoin Trust to close in the fourth quarter of 2024.

Industry Context

The report reflects the growing interest and investment in bitcoin ETFs as a means for investors to gain exposure to the cryptocurrency market.

Comparison to Industry Standards

• The Bitwise Bitcoin ETF is competing with other Bitcoin ETFs such as Grayscale Bitcoin Trust (GBTC), Fidelity Wise Origin Bitcoin Fund (FBTC), and iShares Bitcoin Trust (IBIT).
• The 0.20% sponsor fee is among the lowest in the industry.
• The ETF's performance is directly tied to the price of Bitcoin, similar to other Bitcoin ETFs.

Related Party Transactions

• The Trust pays the Sponsor Fee to Bitwise Investment Advisers, LLC, an affiliate of Bitwise Asset Management, Inc.

Stakeholder Impact

• Shareholders are exposed to the value of bitcoin through the Trust's shares.
• Authorized Participants facilitate the creation and redemption of shares.
• Service providers, such as the Bitcoin Custodian and Administrator, play a critical role in the Trust's operations.

Next Steps

• Consummation of the Asset Purchase with Osprey Bitcoin Trust in the fourth quarter of 2024.
• Continued monitoring of bitcoin market conditions and regulatory developments.
• Ongoing management of the Trust's operations and expenses.

Key Dates

Keywords

Bitcoin, ETF, Bitwise, Crypto, Investment, Assets, NAV, Shares, Trust, Sponsor