10-Q: CoinShares Bitcoin ETF Q1 2026 Performance Update

CoinShares Bitcoin ETF reports a significant decrease in net assets and NAV per share for Q1 2026, primarily driven by a decline in Bitcoin's value.

Summary

• The CoinShares Bitcoin ETF (BRRR) reported a decrease in net assets from $505,380,907 on December 31, 2025, to $429,730,949 on March 31, 2026.
• Net Asset Value (NAV) per Share declined by 22.2% from $24.74 to $19.24 over the same period.
• The primary driver for this decrease was a 22.2% depreciation in the value of Bitcoin, which fell from $87,650 to $68,198.
• Total expenses for the three months ended March 31, 2026, were $288,981, a decrease from $460,553 in the prior year period.
• The Trust experienced net creations of 1,910,000 Shares, valued at $45,039,796, while redemptions amounted to 10,810,000 Shares, valued at -$269,116,967 in the prior year period.
• As of March 31, 2026, affiliates of the Sponsor owned 18,140,000 Shares of the Trust.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the substantial decrease in the ETF's net asset value and per-share NAV, driven by Bitcoin's price depreciation and significant unrealized losses.

Positives

• Sponsor fees decreased to $288,981 for Q1 2026 from $460,553 in Q1 2025, indicating improved cost management or lower Bitcoin holdings.
• Despite the overall decline, there were net creations of Shares totaling $45,039,796 during the quarter, suggesting continued investor interest in acquiring exposure to Bitcoin through the ETF.
• The Trust's disclosure controls and procedures were deemed effective as of the end of the reporting period.

Negatives

• The Net Asset Value (NAV) per Share decreased by 22.2% from $24.74 to $19.24 during the quarter.
• The total return at NAV was -22.23% for the three months ended March 31, 2026.
• The total return at market value was -22.64% for the same period.
• The net income (loss) for the three months ended March 31, 2026, was a significant loss of $(120,689,754).
• The fair value of the Trust's Bitcoin holdings decreased from $505,489,906 to $429,823,599.

Risks

• The open-source and decentralized nature of Bitcoin Network development reduces certainty in protocol upgrades and fixes, potentially impacting performance.
• Scaling challenges in the Bitcoin Network could limit transaction throughput and increase blockchain bloat, negatively affecting value.
• Potential flaws in Bitcoin's cryptography or advancements in computing power (e.g., quantum computing) could compromise security and lead to theft of the Trust's Bitcoin.
• Mathematical or technological advances, particularly in quantum computing, could undermine the Bitcoin Network's consensus mechanism and security.
• The research published by Google Quantum AI on March 31, 2026, indicates that breaking Bitcoin's underlying cryptography may require significantly fewer quantum computing resources than previously estimated, accelerating the potential threat.
• The lack of a central authority to reverse or recover stolen funds in the event of a quantum attack makes such events potentially irreversible.
• The Bitcoin Network's reliance on proof-of-work mining could be disrupted by quantum-driven attacks on its consensus mechanism.
• There is no guarantee that quantum-proof security upgrades will be implemented across the Bitcoin Network in a timely manner or at all.
• Individual users and custodians would need to migrate their wallets to benefit from any security upgrades, leaving unmigrated wallets vulnerable.

Future Outlook

The filing does not contain specific forward-looking guidance on future financial performance. However, it highlights ongoing risks related to Bitcoin's price volatility, network security, and potential technological advancements like quantum computing, which could materially impact future results.

Management Comments

• The Sponsor believes the risk of loss under indemnification arrangements to be remote.
• The Principal Executive Officer and Chief Financial Officer concluded that the Trusts disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report.
• The Sponsor has evaluated all subsequent events through the issuance of the financial statements and has noted no events requiring adjustment or additional disclosure.

Industry Context

StockSavvy.ai notes that the performance of the CoinShares Bitcoin ETF is directly tied to the price movements of Bitcoin. The significant decline in NAV per share reflects the broader market volatility experienced by cryptocurrencies during the quarter. The discussion around quantum computing risks highlights a growing concern within the digital asset space regarding long-term security.

Comparison to Industry Standards

• The filing does not provide direct comparisons to other Bitcoin ETFs or traditional financial benchmarks. The performance is measured against the CME CF Bitcoin Reference Rate - New York Variant.
• The total return at NAV of -22.23% for Q1 2026 is a significant underperformance compared to the previous year's Q1 return of -11.12%, indicating a challenging market environment for Bitcoin during the reported period.
• The Sponsor fee of 0.25% is a standard management fee for passively managed Bitcoin ETFs, aligning with industry norms.

Legal Proceedings

• None disclosed.

Related Party Transactions

• Sponsor fees are paid to CoinShares Co., the sponsor of the Trust. For the three months ended March 31, 2026, Sponsor Fees incurred were $288,981, down from $460,553 in the prior year period.
• As of March 31, 2026, affiliates of the Sponsor owned 18,140,000 Shares of the Trust.

Stakeholder Impact

• Shareholders experienced a significant decrease in the value of their investment due to Bitcoin's price decline and the resulting drop in the ETF's NAV.
• The Sponsor and its affiliates, who hold a substantial number of shares, are also impacted by the decrease in the Trust's net asset value.
• Service providers such as the Trustee, Administrator, Custodians, and Marketing Agent continue to provide services, with their fees generally assumed by the Sponsor.

Next Steps

• The Sponsor will continue to monitor the value of Bitcoin and the Trusts net assets.
• The Trust will continue to operate under its investment objective to reflect the performance of Bitcoin, less liabilities and expenses.
• The Sponsor will continue to evaluate and disclose risks, including those related to quantum computing and Bitcoin network security.

Key Dates

Recommendation

The filing reflects a significant decline in the ETF's value due to Bitcoin's price drop, which is a known risk for this asset class. While the performance is negative for the quarter, the underlying asset's volatility is inherent. For investors who understand and accept Bitcoin's risk profile, holding the position may be appropriate, awaiting potential market recovery. New investment decisions should consider the current market sentiment and the identified risks, particularly those related to quantum computing.

Keywords

CoinShares Bitcoin ETF, BRRR, Bitcoin, ETF, Quarterly Report, SEC Filing, Form 10-Q, Digital Assets, Cryptocurrency, Net Asset Value, Market Risk, Quantum Computing