10-Q: Bitwise Chainlink ETF Reports Net Asset Decline Amidst Market Volatility

The Bitwise Chainlink ETF (CLNK) reported a significant decrease in its Net Asset Value (NAV) per share for the quarter ended June 30, 2026, primarily driven by unrealized losses on its Chainlink holdings.

Summary

• The Bitwise Chainlink ETF (CLNK) experienced a substantial decline in its Net Asset Value (NAV) per share during the quarter ended June 30, 2026.
• The Trust's net assets increased from $15,481,264 to $19,912,357, largely due to share creations totaling $8,989,917.
• However, the Trust incurred a net realized and unrealized loss of $4,543,574 on its Chainlink investment during the three-month period.
• The NAV per share decreased from $15.96 at the beginning of the period to $13.10 at the end of the period.
• The total return at NAV for the three months was -17.92%.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative score due to significant unrealized losses and a substantial decrease in NAV per share, despite the increase in net assets from capital share transactions.

Positives

• Net assets increased from $15,481,264 to $19,912,357 due to significant share creations totaling $8,989,917.
• The Sponsor waived the entire Sponsor Fee on the first $500 million of Trust assets through April 13, 2026, reducing immediate expenses.
• The Trust's disclosure controls and procedures were deemed effective by management.
• The Trust is structured to provide investors with exposure to Chainlink without the direct risks of acquiring and holding the digital asset.

Negatives

• The Trust experienced a net realized and unrealized loss of $4,543,574 on its Chainlink investment for the three months ended June 30, 2026.
• The NAV per share decreased significantly from $15.96 to $13.10 during the quarter.
• The total return at NAV for the three months was a negative 17.92%.
• The Trust's investment in Chainlink is subject to extreme volatility, with a substantial unrealized depreciation of $4,544,577 reported.

Risks

• Substantial holdings of Chainlink create a concentration risk, making the Trust vulnerable to fluctuations in Chainlink's price.
• Extreme volatility in Chainlink's trading price could lead to a material adverse effect on the value of the Shares, potentially resulting in a total loss.
• Factors adversely impacting Chainlink's value include changes in global supply/demand, market sentiment towards crypto assets, unregulated crypto exchanges, adoption as a medium of exchange, and network forks.
• The Trust's custodian for Chainlink, Coinbase Custody Trust Company, LLC, is subject to change at the Sponsor's discretion.
• Temporary differences in Chainlink held by the custodian may occur due to pending settlements.

Future Outlook

The Trust's primary investment objective is to provide exposure to the value of Chainlink, less expenses. The Trust intends to conduct staking as a secondary investment objective in the future, utilizing staking agents to operate node infrastructure.

Management Comments

• The Sponsor has agreed to pay all operating expenses (except for litigation expenses and other extraordinary expenses) out of the Sponsor's unified management fee.
• The Sponsor believes that the design of the Trust will enable certain investors to more effectively and efficiently implement strategic and tactical asset allocation strategies that use Chainlink by investing in the Shares rather than purchasing, holding and trading Chainlink directly.
• Management believes that the Trust's disclosure controls and procedures were effective as of June 30, 2026.

Industry Context

StockSavvy.ai notes that the performance of the Bitwise Chainlink ETF is directly tied to the volatile digital asset market, specifically Chainlink. The significant unrealized losses reflect the broader market's performance in digital assets during the period, which has seen considerable price fluctuations.

Comparison to Industry Standards

• The Trust's expense ratio for gross expenses is 0.34%, and for net expenses is 0.30% for the three months ended June 30, 2026. This is in line with other specialized crypto-focused ETFs, though higher than traditional broad-market ETFs.
• The total return of -17.92% for the quarter is a significant underperformance compared to traditional asset classes but may be within the expected volatility range for a single-asset cryptocurrency ETF during a downturn.

Legal Proceedings

• None reported.

Related Party Transactions

• The Sponsor, Bitwise Investment Advisers, LLC, acts as the Sponsor for the Trust and is a wholly-owned subsidiary of Bitwise Asset Management, Inc. (BAM).
• BIM, an affiliate of the Sponsor, purchased the initial 100,000 Shares of the Trust.
• The Sponsor receives a Sponsor Fee of 0.34% per annum of the Trust's Chainlink holdings, payable monthly in Chainlink.
• The Sponsor agreed to waive the entire Sponsor Fee on the first $500 million of Trust assets from January 14, 2026, through April 13, 2026.
• The Sponsor assumes normal operating expenses of the Trust, including trustee fees, service provider fees, exchange listing fees, and tax reporting fees, up to $500,000 per annum in ordinary legal fees.

Stakeholder Impact

• Shareholders have experienced a significant decrease in the value of their investment due to Chainlink price depreciation.
• The Sponsor continues to manage the Trust's operations and assumes certain operating expenses.
• Authorized Participants facilitate the creation and redemption of Shares, impacting market liquidity.

Next Steps

• The Trust will continue to seek to provide exposure to the value of Chainlink, less expenses.
• The Trust intends to conduct staking as a secondary investment objective in the future.
• The Sponsor will continue to oversee service providers and exercise managerial control.

Key Dates

Recommendation

The ETF's performance is heavily tied to Chainlink's price, which has experienced significant volatility and unrealized losses. While net assets increased due to creations, the decline in NAV per share and negative total return suggest caution. The potential for future staking revenue is a long-term consideration, but current market conditions and asset depreciation warrant a hold.

Keywords

Chainlink ETF, CLNK, Digital Asset, Cryptocurrency, Exchange Traded Product, NAV, Sponsor Fee, Coinbase Custody