10-K: Grayscale Bitcoin Trust ETF Reports 24% Net Asset Decline in 2025

Grayscale Bitcoin Trust ETF (GBTC) saw its net assets fall by 24% in 2025, driven by Bitcoin price depreciation and significant redemptions, despite a reduced sponsor fee and improved arbitrage mechanism post-NYSE Arca listing.

Summary

• Net assets decreased by 24% to $14,497,437,000 at December 31, 2025, from $19,182,244,000 at December 31, 2024.
• Bitcoin's fair value depreciated from $93,390.22 per Bitcoin as of December 31, 2024, to $87,549.41 per Bitcoin as of December 31, 2025.
• The Trust experienced a net decrease in net assets resulting from operations of ($993,547,000) for the year ended December 31, 2025.
• Approximately 43,347 Bitcoin, valued at $4,320,701,000, were redeemed from the Trust in 2025, while 6,306 Bitcoin, valued at $629,441,000, were contributed.
• The Sponsor's Fee was reduced from 2.0% to 1.5% annually, effective January 11, 2024, accruing daily and payable in Bitcoin.
• Shares of the Trust began trading on NYSE Arca under the ticker symbol GBTC on January 11, 2024, following SEC approval.
• The Trust operates a redemption program for Authorized Participants exclusively through Cash Orders, as in-kind transactions are not currently permitted.
• The Trust irrevocably abandons any Incidental Rights and IR Virtual Currency (e.g., from forks or airdrops), meaning shareholders do not receive these benefits.
• Internal control over financial reporting was assessed as effective as of December 31, 2025, with no material cybersecurity threats identified during the year.
• Digital Currency Group, Inc. (DCG), the indirect parent company of the Sponsor, holds less than 1% of the Trust's Shares and has a minority interest (<1.0%) in Kraken, one of the Digital Asset Trading Platforms included in the Index.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a moderately negative filing due to the significant decline in net assets and Bitcoin price depreciation in 2025, coupled with substantial net redemptions. While operational controls are effective and the fee reduction is positive, the financial performance and ongoing regulatory uncertainties present headwinds.

Positives

• Shares were listed on NYSE Arca on January 11, 2024, enhancing accessibility and liquidity for investors.
• The Sponsor's Fee was reduced from 2.0% to 1.5% annually, effective January 11, 2024, which directly benefits shareholders by lowering ongoing expenses.
• The Trust maintains an ongoing redemption program for Authorized Participants, which helps to manage the premium/discount of Shares to Net Asset Value (NAV).
• Internal control over financial reporting was deemed effective as of December 31, 2025, indicating sound financial management and oversight.
• No material cybersecurity threats were identified at the Sponsor or the Trust during the year ended December 31, 2025.
• The addition of Anchorage Digital Bank N.A. as an alternative custodian enhances the security and risk management framework for the Trust's Bitcoin holdings.

Negatives

• Net assets decreased significantly by 24% from $19,182,244,000 at December 31, 2024, to $14,497,437,000 at December 31, 2025.
• The fair value of Bitcoin depreciated from $93,390.22 per Bitcoin at December 31, 2024, to $87,549.41 per Bitcoin at December 31, 2025.
• The Trust reported a net decrease in net assets resulting from operations of ($993,547,000) for the year ended December 31, 2025.
• Significant net redemptions occurred, with 43,347 Bitcoin redeemed compared to only 6,306 Bitcoin contributed in 2025.
• Shares traded at an average discount of 0.08% to the NAV per Share from January 11, 2024, to December 31, 2025, and a 0.07% discount as of December 31, 2025.
• The Trust is currently unable to facilitate in-kind creations and redemptions, relying solely on Cash Orders, which could impact arbitrage efficiency and liquidity.
• Shareholders do not receive the benefits of any forks or airdrops, as the Trust irrevocably abandons these Incidental Rights and IR Virtual Currency.

Risks

• Extreme volatility of digital asset trading prices, including Bitcoin, could materially adversely affect the value of the Shares.
• The medium-to-long term value of the Shares is subject to factors relating to the capabilities and development of blockchain technologies, including dependence on the internet, scaling challenges, and potential flaws in cryptography.
• Digital assets represent a relatively new and rapidly evolving industry, and the value of the Shares depends on the acceptance of Bitcoin.
• Concentrated ownership of Bitcoin and large sales or distributions by holders could have an adverse effect on the market price of Bitcoin.
• If digital asset rewards for mining blocks and transaction fees are not sufficiently high, or if jurisdictions regulate mining, miners may cease expanding processing power, negatively impacting Bitcoin value.
• A malicious actor or botnet obtaining control of more than 50% of the processing power on the Bitcoin Network could manipulate the Blockchain, adversely affecting Share value.
• A temporary or permanent fork or a clone of the Bitcoin Network could adversely affect the value of the Shares or the ability of the Trust to operate.
• If the Bitcoin Network is used to facilitate illicit activities, businesses facilitating Bitcoin transactions could face increased legal risks, negatively affecting Bitcoin price and Share value.
• Recent extreme volatility and disruption in digital asset markets (e.g., FTX, Celsius, Voyager failures) could continue, leading to loss of confidence and market-wide declines in liquidity.
• The largely unregulated nature and lack of transparency of Digital Asset Trading Platforms may lead to fraud, market manipulation, business failures, security failures, or operational problems.
• Digital Asset Trading Platforms may be exposed to front-running and wash-trading, which could negatively affect market perception and Bitcoin price.
• The Index used to calculate Bitcoin price has a limited history, and its failure or inaccuracies could adversely affect Share value.
• Purchasing and selling activity in the Digital Asset Markets associated with Basket creations and redemptions may affect the Index Price and Share trading prices.
• Competition from other digital assets, central bank digital currencies (CBDCs), and emerging payments initiatives could adversely affect Bitcoin price.
• Prices of Bitcoin may be affected by stablecoins (including Tether and USDC), their issuers' activities, and regulatory treatment.
• The Trust relies on third-party service providers (Custodial Entities, Authorized Participants, Liquidity Providers), and disruptions or insolvencies could pose challenges to safekeeping Bitcoin and Trust operations.
• The legal rights of customers with respect to digital assets held by third-party custodians in insolvency proceedings are currently uncertain.
• The Shares may trade at a price that is at, above, or below the Trust's NAV per Share due to non-concurrent trading hours and other market factors.
• Any suspension or other unavailability of the Trust's redemption program may cause the Shares to trade at a discount to the NAV per Share.
• The amount of the Trust's assets represented by each Share will decline over time as the Trust pays the Sponsor's Fee and Additional Trust Expenses.
• The value of the Shares may be influenced by factors unrelated to the value of Bitcoin, such as operational problems or security vulnerabilities.
• Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act or protections afforded by the CEA.
• There is no guarantee that an active trading market for the Shares will continue to develop.
• The Sponsor and its management have limited history operating investment vehicles like the Trust, which may be inadequate or unsuitable.
• Security threats to the Trust's Bitcoin holdings could result in halting operations, loss of assets, or damage to reputation.
• Bitcoin transactions are irrevocable, and stolen or incorrectly transferred Bitcoin may be irretrievable.
• The lack of full insurance and shareholders' limited rights of legal recourse against the Trust and service providers expose the Trust to loss.
• The Trust may be required, or the Sponsor may deem it appropriate, to terminate and liquidate at a time disadvantageous to shareholders.
• The Trust Agreement includes provisions that limit shareholders' voting rights and restrict their right to bring a derivative action (requiring 10% ownership by non-affiliated shareholders).
• The Sponsor is solely responsible for determining the value of the NAV and NAV per Share, and any errors or changes in calculations may adversely affect Share value.
• Extraordinary expenses resulting from unanticipated events may become payable by the Trust, adversely affecting Share value.
• The Trust's delivery or sale of Bitcoin to pay expenses could result in shareholders incurring tax liability without an associated distribution.
• Intellectual property rights claims may adversely affect the Trust and the value of the Shares.
• Pandemics, epidemics, and other natural and man-made disasters could negatively impact the value of the Trust's holdings and/or significantly disrupt its affairs.
• The lack of ability to facilitate in-kind creations and redemptions of Shares could have adverse consequences for the Trust.
• Coinbase Global serves as the Bitcoin custodian and prime execution agent for several competing exchange-traded Bitcoin products, which could adversely affect the Trust's operations.
• Certain Authorized Participants may serve competing exchange-traded Bitcoin products, which could adversely affect the arbitrage mechanism.
• A determination that Bitcoin or any other digital asset is a security may adversely affect the value of Bitcoin and the Shares, and could result in termination of the Trust.
• Regulatory changes or actions by the U.S. Congress or any U.S. federal or state agencies may affect the value of the Shares or restrict the use of Bitcoin or mining activity.
• Regulatory changes or other events in foreign jurisdictions may affect the value of the Shares or restrict the use of digital assets.
• If regulators subject an Authorized Participant, the Trust, or the Sponsor to regulation as a money service business or money transmitter, it could result in extraordinary expenses and decreased liquidity.
• Statutory or regulatory changes or interpretations could obligate the Trust or the Sponsor to register and comply with new regulations, resulting in extraordinary expenses.
• The treatment of the Trust for U.S. federal income tax purposes is uncertain, potentially impacting its grantor trust status.
• The treatment of digital assets for U.S. federal income tax purposes is uncertain, with potential adverse tax consequences for shareholders from future guidance or developments (e.g., forks, airdrops).
• Future developments in the treatment of digital assets for tax purposes other than U.S. federal income tax purposes could adversely affect the value of the Shares.
• A U.S. tax-exempt shareholder may recognize unrelated business taxable income (UBTI) from forks, airdrops, or similar occurrences.
• Shareholders may be subject to withholding tax on income derived from forks, airdrops, and similar occurrences.
• Potential conflicts of interest may arise among the Sponsor or its affiliates and the Trust, potentially favoring their own interests.
• Shareholders cannot be assured of the Sponsor's continued services, the discontinuance of which may be detrimental to the Trust.
• If the Custodian resigns or is removed without replacement, it would trigger early termination of the Trust.
• Shareholders may be adversely affected by the lack of independent advisers representing investors in the Trust.

Future Outlook

The Trust's investment objective is to reflect the value of Bitcoin held by the Trust, less expenses, without seeking to generate additional returns. There is no assurance that this objective will be achieved. The Sponsor has committed to irrevocably abandoning Incidental Rights and IR Virtual Currency, meaning shareholders will not benefit from forks or airdrops. The ability to facilitate in-kind creations and redemptions remains uncertain, with no assurance as to when regulatory approval might be obtained. Future regulatory developments in the digital asset space are difficult to predict but could significantly impact the Trust's operations and the value of its Shares, potentially leading to termination if Bitcoin is deemed a security.

Management Comments

• The Sponsor believes that the security procedures in place for the Trust, including offline storage for a substantial portion of Bitcoin, multiple encrypted private key shards, usernames, passwords, and 2-step verification, are reasonably designed to safeguard the Trust's Bitcoin.
• The Sponsor believes the Index Provider's selection process for Constituent Trading Platforms and the methodology of the Index Price algorithm provide a more accurate picture of Bitcoin price movements than a simple average of Digital Asset Trading Platform spot prices.
• The Sponsor intends to take the position that the Trust is properly treated as a grantor trust for U.S. federal income tax purposes.
• The Sponsor does not believe the Trust's activities are required to be regulated by the CFTC as a commodity pool or by the SEC as a registered investment company under current law, regulation, and interpretation.
• Peter Mintzberg, Principal Executive Officer, certified that the report does not contain any untrue statement of a material fact or omit to state a material fact, and that the financial statements fairly present the financial condition and results of operations.

Industry Context

StockSavvy.ai notes the digital asset market continues to experience extreme volatility and regulatory scrutiny, as evidenced by the failures of FTX, Celsius, and Voyager, and ongoing SEC enforcement actions against major platforms like Binance, Coinbase, and Kraken (though these specific complaints were dismissed between Feb-May 2025). The withdrawal of the SEC's proposed Rule 206(4)-2 amendments in June 2025, followed by new initiatives like 'Project Crypto' and the 'GENIUS Act' in July 2025, indicates an evolving but still uncertain regulatory landscape for digital assets in the U.S. The establishment of a Strategic Bitcoin Reserve by President Trump in March 2025, while initially causing market fluctuations, highlights increasing governmental engagement with digital assets. The entry of Anchorage Digital as an additional custodian for GBTC reflects a broader industry trend towards enhanced security and risk management in digital asset custody.

Comparison to Industry Standards

• The Trust's 1.5% annual Sponsor's Fee (reduced from 2.0% in January 2024) is a competitive factor. StockSavvy.ai notes that this fee is generally higher than some traditional ETFs but is competitive within the nascent spot Bitcoin ETF market, where fees range from 0.19% to 1.5% among major players like BlackRock's IBIT (0.25%), Fidelity's FBTC (0.25%), and Ark Invest/21Shares' ARKB (0.21%), often with initial fee waivers. GBTC's higher fee may impact its ability to attract and retain assets compared to lower-cost competitors.
• The average premium of 0.06% and average discount of 0.08% to NAV per Share from January 11, 2024, to December 31, 2025, indicates that the arbitrage mechanism is generally functioning effectively post-uplisting to NYSE Arca and commencement of redemptions, aligning with expectations for actively arbitraged ETFs. This contrasts sharply with the historical average premium of 37% and discount of 25% when trading on OTCQX without a redemption program.
• The use of multiple custodians (Coinbase Custody and Anchorage Digital) for Bitcoin holdings enhances security and aligns with best practices for institutional digital asset custody, mitigating single-point-of-failure risks.

Management Changes

Corporate Governance

Legal Proceedings

• Genesis Global Capital, LLC and Genesis Asia Pacific Pte. Ltd. filed a complaint in the United States Bankruptcy Court for the Southern District of New York against Digital Currency Group, Inc. (DCG) and certain affiliates, including Grayscale Operating, LLC (GSO), alleging preferential transfers of 105 Bitcoin and 37,647.06 Ethereum Classic tokens to GSI (GSO's predecessor) during the preference period prior to Genesis Capital's bankruptcy filing. GSO believes the lawsuit is without merit and intends to vigorously defend against it. The Sponsor does not expect this proceeding to have a material adverse effect on the Trust's business, financial condition, or results of operations.

Related Party Transactions

• Grayscale Investments Sponsors, LLC (Sponsor) is a consolidated subsidiary of Grayscale Operating, LLC (GSO), which is a consolidated subsidiary of Digital Currency Group, Inc. (DCG).
• DCG, the indirect parent company of the Sponsor, holds less than 1% of the Trust's Shares as of February 20, 2026. DCG purchased a total of $771.8 million worth of Shares under authorization, but made no purchases from July 1, 2022, to December 31, 2025.
• DCG holds a minority interest (less than 1.0%) in Kraken, one of the Digital Asset Trading Platforms included in the Index.
• The Sponsor pays fees to Coinbase Custody Trust Company, LLC (Custodian) and Coinbase, Inc. (Prime Broker), which are affiliates of Coinbase Global, Inc.
• The Sponsor pays a monthly fee and a fee based on the NAV of the Trust to CoinDesk Indices, Inc. (Index Provider) for the Index License Agreement.
• Grayscale Securities, LLC, an affiliate of the Sponsor, served as the Authorized Participant from October 3, 2022, through January 10, 2024.
• Jane Street Capital, LLC, an Authorized Participant, is an affiliate of JSCT, LLC, one of the Liquidity Providers.
• Virtu Americas LLC, an Authorized Participant, is an affiliate of Virtu Financial Singapore Pte. Ltd., one of the Liquidity Providers.
• Several employees of the Sponsor and DCG are FINRA-registered representatives through Grayscale Securities.

Stakeholder Impact

• Shareholders are directly impacted by the decrease in net assets and Bitcoin price depreciation, leading to a potential loss on investment. They benefit from the reduced Sponsor's Fee and the improved arbitrage mechanism post-NYSE Arca listing, but face risks from market volatility, regulatory uncertainty, and limited voting/derivative rights.
• The Sponsor (Grayscale Investments Sponsors, LLC) continues to receive the Sponsor's Fee and is responsible for the Trust's administration and certain expenses. It faces potential conflicts of interest due to its affiliations and other investment activities.
• Authorized Participants facilitate the creation and redemption of Baskets, benefiting from arbitrage opportunities. They face risks related to the suspension of the redemption program or new regulatory requirements.
• Custodians (Coinbase Custody and Anchorage Digital) provide safekeeping for the Trust's Bitcoin and receive fees. They are exposed to risks related to security breaches, insolvency, and evolving regulatory definitions of 'qualified custodian'.
• Regulators (SEC, CFTC, FinCEN) are actively scrutinizing the digital asset market, leading to new regulations and enforcement actions that impact the Trust and the broader industry, creating an uncertain operating environment.

Next Steps

• The Sponsor will continue to monitor for material hard forks or airdrops and notify investors of any material change to its policy regarding Incidental Rights and IR Virtual Currency by filing a current report on Form 8-K.
• NYSE Arca may seek regulatory approval to amend its listing rules to permit the Trust to create and redeem Shares through In-Kind Orders.
• The Index Provider has scheduled quarterly reviews to add or remove Constituent Trading Platforms.
• The Sponsor will provide updates of changes to the Index Price calculation methodology or Constituent Trading Platforms in the Trust's periodic or current reports.
• The Sponsor may, in its sole discretion, select a different index provider, select a different index price, calculate the Index Price using cascading rules, or change the cascading rules at any time.
• The Sponsor will continue to monitor the value of Bitcoin deposited in cold storage addresses for whether the Cold Storage Threshold of $100 million has been met.
• The Sponsor and/or the Trust may be subject to additional legal proceedings and disputes in the future.

Key Dates

Recommendation

The Grayscale Bitcoin Trust ETF (GBTC) experienced a significant decline in net assets and Bitcoin price depreciation in 2025, alongside substantial net redemptions. While the reduction in the Sponsor's fee and the improved arbitrage mechanism post-uplisting are positive, the inherent volatility of Bitcoin, coupled with an evolving and uncertain regulatory landscape, presents considerable risks. The Trust's inability to facilitate in-kind creations and redemptions remains a structural limitation. Given the current market conditions and the mix of positive operational adjustments against negative financial performance and persistent regulatory and market risks, a 'Hold' recommendation is appropriate for seasoned investors. This allows for continued exposure to Bitcoin's potential upside while acknowledging the significant downside risks and the need for further clarity in the digital asset ecosystem.

Keywords

Bitcoin ETF, Grayscale Bitcoin Trust ETF, GBTC, Bitcoin, Digital Assets, Cryptocurrency, SEC Filing, 10-K, Financial Report, Investment Trust, Spot Bitcoin ETF, Blockchain, Custody, Regulatory Risk, Market Volatility, Net Asset Value, Redemptions, Sponsor Fee, Corporate Governance