10-Q: CoinShares Valkyrie Bitcoin Fund Reports Net Asset Value of $17.54 per Share for Q2 2024

CoinShares Valkyrie Bitcoin Fund's Q2 2024 report reveals a net asset value of $17.54 per share, reflecting changes in bitcoin value and share activity.

Summary

• CoinShares Valkyrie Bitcoin Fund reported its financial results for the quarter ended June 30, 2024.
• The fund's net assets decreased from $543,197,988 on March 31, 2024, to $518,313,439 on June 30, 2024.
• The number of outstanding shares increased from 27,075,000 to 29,545,000 during the quarter.
• This increase was due to the creation of 4,960,000 shares and the redemption of 2,490,000 shares.
• The value of bitcoin depreciated by 12.5% during the quarter, from $70,764 to $61,910.
• The net asset value per share decreased by 12.6% from $20.06 to $17.54.
• The fund experienced a net loss from operations of $69,741,963 for the quarter.
• This loss was primarily due to a decrease in unrealized gain on bitcoin investment of $82,428,503, partially offset by realized gains of $12,977,021 and sponsor fees of $290,481.
• The Sponsor Fee accrues at an annual rate of 0.25% of the Trust’s Bitcoin Holdings.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the decrease in net asset value and the net loss reported for the quarter, despite the increase in shares outstanding.

Positives

• The Trust had creations of 32,040,000 shares valued at $543,084,070 and redemptions of (2,495,000) shares valued at $(45,702,507) for the six months ended June 30, 2024.
• The Trust had net realized gain (loss) from investment of $12,977,021 for the three months ended June 30, 2024.
• The Trust had net realized gain (loss) from investment of $12,977,021 for the six months ended June 30, 2024.

Negatives

• The fund experienced a net loss of $69,741,963 for the quarter ended June 30, 2024.
• The net asset value per share decreased by 12.6% from $20.06 to $17.54 during the quarter.
• The value of bitcoin depreciated by 12.5% during the quarter, from $70,764 to $61,910.

Risks

• The Trust's performance is directly tied to the price of bitcoin, which is volatile and subject to market fluctuations.
• Changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies could adversely affect the Trust.
• Disruptions in the Trust's computer systems and data centers, or those of its vendors, including the Custodians, could negatively impact operations.
• The Trust is subject to risks associated with the use of technology, including the transition to new technology platforms.
• The Trust's ability to maintain a positive reputation is crucial for its success.
• General economic, market, and business conditions can impact the Trust's performance.
• World economic and political developments can affect the Trust's operations and the value of its shares.

Future Outlook

The report contains forward-looking statements regarding the Trust's financial conditions, results of operations, plans, objectives, future performance, and business, which are subject to risks and uncertainties.

Industry Context

This announcement provides insight into the performance of a Bitcoin ETF during a period of market volatility, reflecting broader trends in the cryptocurrency market and investor sentiment towards digital assets.

Comparison to Industry Standards

• It is difficult to compare the results to industry standards as the performance is directly linked to the price of Bitcoin.
• Other Bitcoin ETFs such as Grayscale Bitcoin Trust (GBTC) and iShares Bitcoin Trust (IBIT) would have experienced similar results due to the drop in Bitcoin price during the quarter.
• The sponsor fee of 0.25% is competitive with other Bitcoin ETFs.

Management Changes

Related Party Transactions

• Certain officers of the Trust are affiliated with the Sponsor and are not paid any fees by the Trust for serving in such capacities.
• The Initial Sponsor agreed to waive Sponsor fees for the first three months of the Trusts operations, through April 10, 2024.
• For the six months ended June 30, 2024, the Trust incurred $447,348 in Sponsor Fees, of which, $156,867 was waived by the Initial Sponsor.
• On January 10, 2024, Valkyrie Funds LLC, at such time an affiliate of the Initial Sponsor, purchased 40,000 Shares at a per-Share price of $13.00.
• As of June 30, 2024, affiliates of the Sponsor own 18,140,000 Shares of the Trust.

Stakeholder Impact

• Shareholders experienced a decrease in net asset value per share.
• Authorized participants were involved in the creation and redemption of shares.
• The Sponsor's fee structure impacts the Trust's expenses.

Key Dates

Keywords

Bitcoin, CoinShares Valkyrie Bitcoin Fund, Net Asset Value, BRRR, Cryptocurrency, ETF, Financial Results