10-Q: Fidelity Wise Origin Bitcoin Fund Reports $11.5 Billion in Net Assets for Q3 2024

The Fidelity Wise Origin Bitcoin Fund reported a significant increase in net assets to $11.5 billion for the quarter ended September 30, 2024, driven by both an increase in the price of bitcoin and an increase in outstanding shares.

Summary

• The Fidelity Wise Origin Bitcoin Fund's net assets reached $11.5 billion as of September 30, 2024.
• This increase is primarily due to a rise in the price of bitcoin and an increase in the number of outstanding shares.
• The fund's bitcoin holdings increased to 180,344.62381900 bitcoin.
• The Net Asset Value (NAV) per share increased to $55.66 as of September 30, 2024.
• The fund experienced a net increase in net assets resulting from operations of $41.0 million for the quarter and $1.467 billion for the nine months ended September 30, 2024.
• The fund's sponsor fee was waived until July 31, 2024, and began accruing at an annual rate of 0.25% of the fund's bitcoin holdings on August 1, 2024.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with significant growth in assets and NAV, although it acknowledges the risks associated with bitcoin investments. The sentiment is generally optimistic due to the strong financial performance.

Positives

• The fund experienced substantial growth in net assets, reaching $11.5 billion.
• The fund's bitcoin holdings increased significantly to 180,344.62381900.
• The NAV per share saw a notable increase to $55.66.
• The fund generated a net increase in net assets from operations of $41.0 million for the quarter and $1.467 billion for the nine months ended September 30, 2024.
• The fund's NAV per share increased 38.60% from the start of the year.

Negatives

• The fund experienced a net realized loss of $176.4 million from the sale of bitcoin for share redemptions during the quarter.
• The fund experienced a net realized loss of $294.6 million from the sale of bitcoin for share redemptions during the nine months ended September 30, 2024.
• The fund incurred $4.503 million in net expenses for both the three and nine month periods ended September 30, 2024.

Risks

• The fund's investment strategy is concentrated in a single asset, bitcoin, which exposes it to market risks associated with digital assets.
• The fund's performance is directly tied to the price of bitcoin, which is subject to volatility.
• The fund's shares may trade at a premium or discount to the NAV per share.
• The fund is subject to risks related to government regulation, security breaches, and political and economic uncertainties.

Future Outlook

The fund's future performance is tied to the price of bitcoin and market conditions, and the fund will continue to operate as a passively managed investment vehicle.

Management Comments

• The Sponsor believes that the Shares are designed to provide investors with a cost-effective and convenient way to invest in bitcoin without purchasing, holding and trading bitcoin directly.
• The Sponsor endeavors to minimize the Trusts holdings of assets other than bitcoin.

Industry Context

This report reflects the growing interest in and institutionalization of bitcoin as an investment asset, with the Fidelity Wise Origin Bitcoin Fund being one of the exchange-traded products providing exposure to bitcoin.

Comparison to Industry Standards

• The Fidelity Wise Origin Bitcoin Fund is comparable to other spot bitcoin ETFs that have launched in the market.
• The fund's performance is directly correlated to the price of bitcoin, similar to other bitcoin investment products.
• The fund's expense ratio of 0.25% is competitive with other similar products in the market.
• The fund's holdings of 180,344.62381900 bitcoin is a significant amount compared to other similar funds.

Related Party Transactions

• Fidelity Service Company, Inc., an affiliate of the Sponsor, 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, an affiliate of the Sponsor, is responsible for reviewing and approving the marketing materials.
• Fidelity Product Services LLC, an affiliate of the Sponsor, is responsible for the methodology and oversight of the Index.
• The Sponsor is obligated to assume and pay all fees and other expenses incurred by the Trust in the ordinary course of its affairs, excluding taxes.

Stakeholder Impact

• Shareholders have benefited from the increase in the fund's NAV and the price of bitcoin.
• Authorized Participants have been able to issue and redeem shares in the fund.
• The fund's service providers, including the administrator, custodian, and distributor, have received fees for their services.
• The Sponsor has received a fee for its services and has assumed most of the expenses of the fund.

Next Steps

• The fund will continue to track the performance of bitcoin as measured by the Fidelity Bitcoin Reference Rate.
• The fund will continue to issue and redeem shares with Authorized Participants.
• The fund will continue to pay the sponsor fee of 0.25% annually of the fund's bitcoin holdings.

Key Dates

Keywords

Bitcoin, Cryptocurrency, Digital Assets, Investment Fund, Net Asset Value, ETF, Exchange Traded Product, Fidelity, FBTC