CoinShares Bitcoin ETF

CoinShares Bitcoin ETF Annual Report - Fiscal Year Ended December 31, 2025

This summary offers a clear overview of the CoinShares Bitcoin ETF's (formerly CoinShares Valkyrie Bitcoin Fund) performance and operations for the fiscal year ended December 31, 2025, based on its SEC 10-K filing.

PART I

Item 1. Business

The CoinShares Bitcoin ETF (ticker: BRRR!) provides investors a regulated and accessible way to gain exposure to Bitcoin without directly purchasing or holding the cryptocurrency. Its primary investment objective is to track Bitcoin's performance, as measured by the CME CF Bitcoin Reference Rate – New York Variant, less its operating expenses. Fiscal year 2025 marks its first full year of operation since launching on January 11, 2024.

The Trust operates within a dynamic and highly competitive market for spot Bitcoin ETFs. It benefits from its early market entry (as the Valkyrie Bitcoin Fund), the established brand and deep expertise of CoinShares as its sponsor in the digital asset space, and its listing on Nasdaq. However, it faces significant competition from larger, well-capitalized asset managers who have also launched similar products. The Trust's ability to maintain and grow its market share depends on its continued focus on cost efficiency, robust operational integrity, effective investor education, and strong market liquidity.

In June 2024, CoinShares Co. officially became the Trust's sole sponsor, succeeding Valkyrie Digital Assets LLC. This transition brings enhanced strategic direction, leveraging CoinShares' extensive experience in digital asset management, research, and product development. While the core strategy of tracking Bitcoin's price remains unchanged, the new sponsorship may lead to optimized operational efficiencies, a broader institutional reach, and potentially new product development initiatives.

Item 1A. Risk Factors

Investing in the CoinShares Bitcoin ETF involves several key risks, including:

• Bitcoin Price Volatility: The extreme and unpredictable price fluctuations of Bitcoin directly impact the ETF's share value.
• Regulatory Risk: The evolving and potentially restrictive global regulatory landscape for cryptocurrencies could negatively affect the Trust's operations, liquidity, or investor demand.
• Custody Risk: Relying on third-party custodians (Coinbase Custody, BitGo) for secure Bitcoin storage creates risks such as security breaches, operational failures, or potential insolvency of these custodians.
• Tracking Error Risk: While the ETF aims to track Bitcoin's price, its performance may deviate from its benchmark due to operational costs, market inefficiencies, or other factors.
• Competition Risk: Increased competition from other spot Bitcoin ETFs could impact the Trust's market share, liquidity, and expense ratio competitiveness.
• Technology and Cybersecurity Risk: The underlying blockchain technology, network attacks, or cybersecurity vulnerabilities could affect the Trust's operations or its custodians.
• Liquidity Risk: While the Trust aims to maintain robust liquidity, significant market disruptions or regulatory changes could impact the ability to create or redeem shares efficiently.
• Tax Risk: The tax treatment of Bitcoin and Bitcoin-related products is subject to change and may be uncertain, potentially impacting investor returns.

Item 2. Properties

The Trust does not own or lease any physical properties. Its operations are primarily digital, relying on the infrastructure of its sponsor, custodians, and other service providers.

Item 3. Legal Proceedings

As of the filing date, the Trust is not involved in any material legal proceedings, nor are any known to be contemplated by governmental authorities.

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Shares of the CoinShares Bitcoin ETF (BRRR!) trade on The Nasdaq Stock Market, LLC. The Trust began trading on January 11, 2024.

As of December 31, 2025, 21,405,000 shares of the ETF were outstanding. The Trust does not have a fixed number of shareholders because its shares are held in book-entry form through The Depository Trust Company, making the number of beneficial owners not readily ascertainable.

The Trust does not buy back its own shares. Instead, authorized participants create and redeem shares in "Baskets" (typically 5,000 shares).

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

This section analyzes the CoinShares Bitcoin ETF's financial condition and operational results for the fiscal year ended December 31, 2025.

Results of Operations: In fiscal year 2025, the ETF's Net Asset Value (NAV) per share increased, closely mirroring Bitcoin's strong performance. The ETF effectively tracked its benchmark, the CME CF Bitcoin Reference Rate – New York Variant. This shows the fund successfully provided direct Bitcoin price exposure, net of expenses.

The Trust experienced significant growth in its first full year. As of December 31, 2025:

• Assets Under Management (AUM): The Trust's AUM grew, driven by Bitcoin's price appreciation and substantial net investor inflows throughout the year.
• Shares Outstanding: 21,405,000 shares of the ETF were outstanding, reflecting the creation of new Baskets (each 5,000 shares) in 2025 to meet investor demand.
• Operating Expenses: Operating expenses primarily covered sponsor, custody, and administrative fees.
• Market Value: The total market value of shares held by non-affiliates by year-end 2025 demonstrated strong investor interest and market liquidity.

Major Accomplishments:

• Successful Launch and Growth: The Trust successfully navigated its first full year of operations, achieving significant AUM growth and investor adoption since its Nasdaq listing (BRRR!) on January 11, 2024.
• Sponsorship Transition: The Trust completed a smooth and effective sponsorship transition, with CoinShares Co. fully assuming the role of sole sponsor from Valkyrie Digital Assets LLC in June 2024. This leverages CoinShares' established expertise in digital asset management.
• Efficient Tracking: The Trust maintained a low tracking error, effectively delivering on its objective to provide Bitcoin price exposure.

Challenges:

• Bitcoin Price Volatility: The inherent and often extreme volatility of the Bitcoin market directly impacts the ETF's NAV and market price.
• Competitive Landscape: Operating in an increasingly crowded market with several other spot Bitcoin ETFs requires continuous efforts in market differentiation and cost efficiency.
• Regulatory Uncertainty: The evolving global regulatory environment for cryptocurrencies can influence market sentiment and operational considerations.

Financial Condition and Liquidity: As an exchange-traded fund designed to hold only Bitcoin, the Trust's financial health depends primarily on the value and security of its Bitcoin holdings and its operational capacity to facilitate share creation and redemption.

• Asset Base: As of December 31, 2025, the Trust held Bitcoin in secure cold storage with qualified custodians, Coinbase Custody Trust Company and BitGo Trust Company.
• Liquidity: The Trust maintains robust operational liquidity to cover its modest expenses and facilitate efficient Basket creation and redemption, ensuring its market price closely aligns with its Net Asset Value.
• Debt: The Trust carries no debt. Its financial stability directly ties to the security of its Bitcoin holdings and the operational integrity of its custodians.

Future Outlook: Looking ahead to 2026, the CoinShares Bitcoin ETF aims to continue offering a secure, transparent, and cost-effective investment vehicle for Bitcoin exposure. Key objectives include growing its Assets Under Management through increased investor adoption, maintaining a tight tracking error against its benchmark, and proactively adapting to the evolving regulatory and market landscape for digital assets. The sponsor anticipates continued growth in the digital asset space and seeks to position the ETF as a leading choice for investors seeking direct Bitcoin exposure within a regulated framework.

Market Trends and Regulatory Environment: In 2025, the digital asset market saw significant Bitcoin price movements, growing institutional interest, and increasing mainstream acceptance. The regulatory landscape continued to evolve, with ongoing global discussions regarding the classification and oversight of cryptocurrencies and related investment products. The Trust closely monitors these trends, especially potential changes in SEC guidance, tax regulations, and international frameworks, as they could impact investor demand, operational costs, or the overall viability of cryptocurrency investment products. Increased clarity around spot Bitcoin ETFs in the U.S. is a positive trend, potentially fostering greater mainstream adoption and liquidity.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The Trust's primary market risk stems from changes in Bitcoin's price. Bitcoin's highly volatile market price directly and significantly impacts the value of the Trust's assets and, consequently, its shares. The Trust does not use derivatives or other financial instruments to hedge against Bitcoin price fluctuations. Other market risks include operational risks with its custodians and service providers, and Bitcoin's general market liquidity.

Item 8. Financial Statements and Supplementary Data

The full 10-K filing includes the complete audited financial statements for the fiscal year ended December 31, 2025. These include the Statements of Assets and Liabilities, Operations, Changes in Net Assets, and Cash Flows, along with financial statement notes and the independent registered public accounting firm's report.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures: The Trust's management, including the Sponsor's principal executive and financial officers, evaluated the effectiveness of its disclosure controls and procedures as of December 31, 2025. Based on this evaluation, the Sponsor's principal executive and financial officers concluded that the Trust's disclosure controls and procedures were effective at a reasonable assurance level.

Internal Control Over Financial Reporting: Management's report on internal control over financial reporting and the independent registered public accounting firm's attestation report on the effectiveness of the Trust's internal control over financial reporting are included elsewhere in the full 10-K filing.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accountant Fees and Services

The Trust typically incorporates information required by Part III (Items 10-14) by reference from its definitive proxy statement or an amendment to this Form 10-K. These documents will be filed with the SEC no later than 120 days after the fiscal year-end. For an ETF, these items primarily relate to the Sponsor's governance and compensation structures as they pertain to the Trust.

PART IV

Item 15. Exhibits, Financial Statement Schedules

The full 10-K filing includes a complete list of exhibits, such as the Trust Agreement, Custodian Agreements, Marketing Agent Agreements, Code of Ethics, and certifications required under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. All required financial statement schedules are either included or noted as not applicable.