10-Q: Fidelity Wise Origin Bitcoin Fund Reports $10.2 Billion in Net Assets for Q1 2024, Fueled by Bitcoin Price Surge and Share Issuance

Fidelity Wise Origin Bitcoin Fund's Q1 2024 report reveals a significant increase in net assets to $10.2 billion, driven by rising bitcoin prices and substantial share issuance.

Summary

• Fidelity Wise Origin Bitcoin Fund (FBTC) reported its financial results for the quarter ended March 31, 2024.
• The fund's net assets reached $10.2 billion, a substantial increase from $40 at the end of December 2023.
• This growth was primarily driven by an increase in outstanding shares and a rise in the price of bitcoin.
• The fund's NAV per share increased by 54.75% from $40.00 on December 31, 2023, to $61.74 on March 31, 2024.
• The quantity of bitcoin held by the Trust increased to 144,704.48094252 as of March 31, 2024.
• The Sponsor has contractually waived the Sponsor Fee until July 31, 2024.
• The net increase in net assets resulting from operations for the quarter ended March 31, 2024 was $2.6 billion.
• The Trust had 165,475,000 shares outstanding as of March 31, 2024.

Sentiment

Score: 9

Explanation: The document presents a highly positive outlook for the Fidelity Wise Origin Bitcoin Fund, driven by substantial asset growth, strong NAV performance, and the ongoing fee waiver. The fund's success is closely linked to the performance of bitcoin, and the report reflects confidence in the cryptocurrency's continued growth.

Positives

• Significant growth in net assets, indicating strong investor interest and confidence.
• Substantial increase in NAV per share, reflecting the positive performance of bitcoin.
• The Sponsor's fee waiver benefits shareholders by reducing expenses.
• The Trust's holdings of bitcoin increased significantly, aligning with its investment objective.
• Effective disclosure controls and procedures are in place.

Negatives

• The Trust's investment strategy is concentrated in a single asset (bitcoin), which maximizes exposure to market risks.
• The Trust experienced a net realized loss of $51 thousand from the sale of investment in bitcoin for the redemption of Shares.

Risks

• The Trust is exposed to market risks associated with bitcoin and digital assets.
• The value of an interest in the Trust can be expected to reduce if there is a decrease in the value of bitcoin.
• Movements in the Index Price, the principal market price, and the Trusts NAV per Share may be influenced by various factors, including, but not limited to, government regulation, security breaches experienced by service providers, as well as political and economic uncertainties around the world.

Future Outlook

The Sponsor may elect to extend the Waiver beyond the Initial Waiver Period at its sole discretion.

Industry Context

The launch of spot bitcoin ETFs, including FBTC, has provided investors with a more accessible and regulated way to gain exposure to bitcoin, contributing to increased demand and higher prices.

Comparison to Industry Standards

• Other Bitcoin ETFs, such as BlackRock's IBIT and Grayscale's GBTC, have also experienced significant inflows and asset growth since their launch.
• FBTC's expense ratio of 0.25% (after the waiver period) is competitive with other Bitcoin ETFs in the market.
• The performance of FBTC is closely tied to the performance of bitcoin, similar to other Bitcoin ETFs.

Related Party Transactions

• Fidelity Service Company, Inc. serves as the Trusts administrator.
• Fidelity Digital Asset Services, LLC, an affiliate of the Sponsor, serves as the Trusts bitcoin custodian.
• Fidelity Distributors Company LLC (FDC or the Distributor) is responsible for reviewing and approving the marketing materials prepared by the Sponsor.
• Fidelity Product Services LLC (the Index Provider) is responsible for the methodology and oversight of the Index.

Stakeholder Impact

• Shareholders have benefited from the increase in NAV per share and the Sponsor Fee waiver.
• Authorized Participants have been able to create and redeem shares in exchange for bitcoin or cash.
• The Trust's service providers, including the Administrator, Custodian, and Distributor, have received fees for their services (borne by the Sponsor).

Next Steps

• The Sponsor will continue to manage the Trust in accordance with its investment objective.
• The Sponsor may decide whether to extend the Sponsor Fee waiver beyond July 31, 2024.
• The Trust will continue to monitor and adapt to changes in the bitcoin market and regulatory environment.

Key Dates

Keywords

Bitcoin, ETF, FBTC, Fidelity, Net Assets, NAV, Cryptocurrency, Digital Assets, Investment Fund