Amendment No.9 to Form S-1

As filed with the Securities and Exchange Commission on February 8, 2017

Registration No. 333-189752

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Amendment No. 9 to

Form S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

WINKLEVOSS BITCOIN TRUST

Sponsored by Digital Asset Services, LLC

(Exact name of Registrant as specified in its charter)

Delaware 6221 81-6728214 (State or other jurisdiction of

incorporation or organization) (Primary Standard Industrial

Classification Code Number) (I.R.S. Employer

Identification No.)

301 N. Market Street, Suite 1463, Wilmington, DE 19801

+1 (646) 751-4444

(Address, including zip code, and telephone number, including area code, of Registrants principal executive offices)

The Corporation Trust Company

1209 Orange Street

Wilmington (New Castle County), DE 19801

+1 (302) 658-7581

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Cameron H. Winklevoss Digital Asset Services, LLC 301 N. Market Street Suite 1463, Wilmington, DE 19801 Edward B. Baer, Esq. Margaret S. Moore, Esq. Ropes & Gray LLP Three Embarcadero Center San Francisco, CA 94111-4006

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ (Do not check if a smaller reporting company) Smaller reporting company ☐

Calculation of Registration Fee

Title of each class of

securities to be registered Amount to be

registered Proposed maximum

offering price per Share(1) Proposed maximum

aggregate offering price(1) Amount of

registration fee(2) Winklevoss Bitcoin Shares 10,000,000 $[10.00] $[100,000,000.00] $ [ ]

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(d) under the Securities Act of 1933. Each Share comprising the initial Baskets of Shares (the Seed Baskets) represents [0.01] bitcoin and is offered at a per Share price equal to the price of [0.01] bitcoin. The price of bitcoin is based on the 4:00 p.m. Eastern Time Gemini Exchange Auction Price (as defined herein). On [ ], 2017, this price was $[ ], and the price of each Share was $[ ]. The Seed Baskets consist of [1,000,000] Shares worth [10,000] bitcoin.

(2) $2,470.28 was previously paid in the initial filing of the registration statement on Form S-1, filed on July 1, 2013.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion

Preliminary Prospectus dated [ ], 2017

[ ] W INKLEVOSS B ITCOIN S HARES

WINKLEVOSS BITCOIN TRUST

The Winklevoss Bitcoin Trust (the Trust) will issue Winklevoss Bitcoin Shares (the Shares), which represent units of fractional undivided beneficial interest in and ownership of the Trust. The Trusts purpose is to hold bitcoin, which is a digital asset (Digital Asset) based on the decentralized, open source protocol of the peer-to-peer Bitcoin computer network (the Bitcoin Network). Digital Asset Services, LLC, formerly Math-Based Asset Services, LLC, is the sponsor of the Trust (the Sponsor); Delaware Trust Company is the trustee of the Trust (the Trustee); State Street Bank and Trust Company (State Street) is both the administrator (the Administrator) and transfer agent (the Transfer Agent) of the Trust; and Gemini Trust Company, LLC, an affiliate of the Sponsor, is the custodian of the Trust (the Custodian). The Trust intends to issue additional Shares on a continuous basis.

The Trust is initially expected to issue and redeem Shares from time to time only in one or more whole blocks of 100,000 Shares (each block of 100,000 Shares is a Basket). The Trust will issue and redeem the Shares in Baskets only to certain authorized firms (Authorized Participants or APs) on an ongoing basis as described in the Plan of Distribution section below. On a creation, Baskets will be distributed to the creating Authorized Participant by the Trust in exchange for the delivery to the Trust of the appropriate number of bitcoin (i.e., bitcoin equal in value to the net asset value per Share of the Trust (NAV) multiplied by the number of Shares in the Basket). On a redemption, the Trust will distribute bitcoin equal in value to the NAV multiplied by the number of Shares in the Basket to the redeeming Authorized Participant in exchange for the delivery to the Trust of one or more Baskets. On each Business Day, the value of each Basket accepted by the Transfer Agent in a creation or redemption transaction will be the same (i.e., each Basket will initially consist of 100,000 Shares and the value of the Basket will be equal to the value of 100,000 Shares at their net asset value per Share on that day). The Trust will not issue or redeem fractions of a Basket.

Prior to this offering, there has been no public market for the Shares. The Shares will be listed on the Bats BZX Exchange, Inc. (Bats) under the symbol COIN.

Investing in the Shares involves significant risks. See Risk Factors starting on page [14]. Neither the Securities and Exchange Commission (the SEC or the Commission) nor any state securities commission has approved or disapproved of the securities offered in this prospectus, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The Shares are neither interests in nor obligations of the Sponsor or the Trustee.

The Trust is expected to issue and redeem Shares from time to time, as described in Creation and Redemption of Shares. It is expected that the Shares issued will be purchased by Authorized Participants and then be distributed to the public by Authorized Participants through sale on Bats. It is expected that the Shares will be sold to the public at varying prices to be determined by reference to, among other considerations, the price of bitcoin represented by each Share and the trading price of the Shares on Bats at the time of each sale.

On [ ], [INITIAL PURCHASER] (the Initial Purchaser), subject to certain conditions, purchased [1,000,000] Shares in exchange for [10,000] bitcoin worth $[ ], which comprise the initial [ten (10)] Baskets of the Trusts Shares (the Seed Baskets), as described in the Plan of Distribution. Delivery of the Seed Baskets will be made on or about [ ]. It is expected that the Initial Purchaser will distribute these Shares to the public through sale on Bats. The Trust will receive all proceeds from the offering of the Seed Baskets in set quantities of bitcoin in a quantity equal to the full price for the Seed Baskets. Each Share in the Seed Baskets represents [0.01] bitcoin, and each Seed Basket consists of 100,000 Shares worth [1,000] bitcoin.

Neither the Initial Purchaser nor the Authorized Participants will receive a selling commission from the Trust in consideration of their distribution of the Shares to the public through sale on Bats. Purchases of the Shares may be subject to customary brokerage charges. Investors should review the terms of their brokerage accounts for details on applicable charges.

Per Share(1) Per Basket Public offering price for the Seed Baskets $ [ ] $ [ ]

(1) The Seed Baskets were created at a per Share value equal to the 4:00 p.m. Eastern Time Gemini Exchange Auction Price (as defined herein) of 0.01 bitcoin on the date of formation of the Trust.

The date of this prospectus is [ ], 2017.

TABLE OF CONTENTS

This prospectus contains information investors should consider when making an investment decision about the Shares. Investors may rely on the information contained in this prospectus. The Trust and the Sponsor have not authorized any person to provide you with different information and, if anyone provides an investor with different or inconsistent information, that investor should not rely on it. This prospectus is not an offer to sell the Shares in any jurisdiction where the offer or sale of the Shares is not permitted.

The Shares are not registered for public sale in any jurisdiction other than the United States.

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S TATEMENT R EGARDING F ORWARD -L OOKING S TATEMENTS

This prospectus contains forward-looking statements with respect to the Trusts financial conditions, results of operations, plans, objectives, future performance and business. Statements preceded by, followed by or that include words such as may, should, expect, plan, anticipate, believe, estimate, predict, potential or similar expressions are intended to identify some of the forward-looking statements. All statements (other than statements of historical fact) included in this prospectus that address activities, events or developments that will or may occur in the future, including such matters as changes in market prices and conditions (for Digital Assets, bitcoin and the Shares), the Trusts operations, the Sponsors plans and references to the Trusts future success and other similar matters are forward-looking statements. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses the Sponsor made based on its perception of historical trends, current conditions and expected future developments, as well as other factors appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsors expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations discussed in this prospectus, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments. See Risk Factors.

Consequently, all the forward-looking statements made in this prospectus are qualified by these cautionary statements, and there can be no assurance that the actual results or developments the Sponsor anticipates will be realized or, even if substantially realized, that they will result in the expected consequences to, or have the expected effects on, the Trusts operations or the value of the Shares. Should one or more of these risks discussed in Risk Factors or other uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those described in forward-looking statements. Forward-looking statements are made based on the Sponsors beliefs, estimates and opinions on the date the statements are made and neither the Trust nor the Sponsor is under a duty or undertakes an obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, other than as required by applicable laws. Investors are therefore cautioned against placing undue reliance on forward-looking statements.

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P ROSPECTUS S UMMARY This is only a summary of the prospectus and, while it contains material information about the Trust and its Shares, it does not contain or summarize all of the information about the Trust and the Shares contained in this prospectus which is material and/or which may be important to you. You should read this entire prospectus, including Risk Factors beginning on page [11], before making an investment decision about the Shares. Trust Structure The Trust is a Delaware statutory trust, organized on December 30, 2014, under the Delaware Statutory Trust Act (DSTA) and operates pursuant to the Amended and Restated Declaration of Trust and Trust Agreement between the Sponsor (as grantor) and the Trustee (the Trust Agreement), which sets forth the respective rights and duties of the Sponsor and the Trustee and authorizes the Sponsor, on behalf of the Trust, to enter into a custody agreement (the Trust Custody Agreement) with the Custodian. The Custodian, an affiliate of the Sponsor, serves as custodian to the Trust under the Trust Custody Agreement, which establishes the segregated custody account of the Trust that will be used to hold the bitcoin deposited with the Custodian on behalf of the Trust (the Trust Custody Account). The Custodian will use its proprietary and patent-pending offline (i.e., air-gapped) hardware and software security technology (Cold Storage System) to store the Trusts bitcoin. The Trust only holds bitcoin, which is a digital asset 1 that is not issued by any government, bank or central organization. Bitcoin is a digital asset (Digital Asset) based on the decentralized, open source protocol of the peer-to-peer Bitcoin computer network (the Bitcoin Network or Bitcoin) 2 that hosts the decentralized public transaction ledger, known as the Blockchain, on which all bitcoin is recorded. The Bitcoin Network software source code includes the protocols that govern the creation of bitcoin and the cryptographic system that secures and verifies Bitcoin transactions. The Blockchain is a canonical record of every bitcoin, every Bitcoin transaction (including the creation or mining of new bitcoin) and every Bitcoin address associated with a quantity of bitcoin. The Bitcoin Network and Bitcoin Network software programs can interpret the Blockchain to determine the exact bitcoin balance, if any, of any public Bitcoin address listed in the Blockchain which has taken part in a transaction on the Bitcoin Network. The Bitcoin Network utilizes the Blockchain to evidence the existence of bitcoin in any public Bitcoin address. A Bitcoin private key controls the transfer or spending of bitcoin from its associated public Bitcoin address. A Bitcoin wallet is a collection of private keys and their associated public Bitcoin addresses. The Trust is expected to issue and redeem Shares from time to time only in one or more whole Baskets. The Trust will issue and redeem the Shares in Baskets only to certain Authorized Participants on an ongoing basis as described in the Plan of Distribution section below. On a creation, Baskets will be distributed to the creating Authorized Participant by the Trust in exchange for the delivery to the Trust of the appropriate number of bitcoin (i.e., bitcoin equal in value to the net asset value per Share of the Trust (NAV) multiplied by the number of Shares in the Basket). On a redemption, the Trust will distribute bitcoin equal in value to the NAV multiplied by the number of Shares in the Basket to the redeeming Authorized Participant in exchange for the delivery to the Trust of one or more Baskets. On each Business Day, the value of each Basket accepted by the Transfer Agent in a creation or redemption transaction will be the same (i.e., each Basket will initially consist of 100,000 Shares and the value of the Basket will be equal to the value of 100,000 Shares at their net asset value per Share on that 1 Bitcoin is a commodity as defined in Section 1a(9) of the Commodity Exchange Act. 7 U.S.C. § 1a(9). See In re Coinflip, Inc., No. 15-29 (CFTC Sept. 17, 2015) (Coinflip). 2 By common convention, Bitcoin with a capital B typically refers to the Bitcoin Network as a whole, whereas bitcoin with a lowercase b refers to the Digital Asset of the Bitcoin Network, including the Trusts bitcoin. This naming convention is used throughout this document.



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day). The Trust will not issue or redeem fractions of a Basket. The investment objective of the Trust is for the Shares to track the price of bitcoin, as measured by the clearing price of a two-sided auction which occurs daily at 4:00 p.m. Eastern Time on the Gemini Exchange (Gemini Exchange) (the Gemini Exchange Auction Price), on each day Bats is open for trading (each a Business Day), less the Trusts liabilities (which include accrued but unpaid fees and expenses). The Gemini Exchange is a Digital Asset exchange owned and operated by the Custodian and is an affiliate of the Sponsor. The Gemini Exchange does not receive any compensation from the Trust or the Sponsor for providing the Gemini Exchange Auction Price. The Sponsor believes that, for many investors, the Shares will represent a cost-effective and convenient means of gaining investment exposure to bitcoin similar to a direct investment in bitcoin. The material terms of the Trust Agreement are discussed in greater detail under the section Description of the Trust Agreement. The Shares represent units of fractional undivided beneficial interest in and ownership of the Trust and are expected to be traded under the ticker symbol COIN. The Trusts Sponsor is Digital Asset Services, LLC (formerly Math-Based Asset Services, LLC). The Sponsor is a Delaware limited liability company formed on May 9, 2013, and is wholly-owned by Winklevoss Capital Fund, LLC (WCF). Under the Delaware Limited Liability Company Act and the governing documents of the Sponsor, WCF, the sole member of the Sponsor, is not responsible for the debts, obligations and liabilities of the Sponsor solely by reason of being the sole member of the Sponsor. The Sponsor will be the exclusive licensee, within the field of use of operation of an exchange-traded product (ETP), of certain patent-pending intellectual property regarding the operation of the Trust. Winklevoss IP LLC (WIP), an affiliate of the Sponsor, is the owner of and is licensing to the Sponsor and its affiliates such intellectual property for use by the Trust and the Custodian and other service providers in the operation of the Trust. The Sponsor arranged for the creation of the Trust and will arrange for the registration of the Shares for their public offering in the United States and their listing on Bats. The Sponsor has agreed to assume the following administrative and marketing expenses incurred by the Trust: (i) the Trustees monthly fee and expenses, including indemnification amounts, reimbursable under the Trust Agreement; (ii) the Administrators monthly fee and expenses reimbursable under the Administration Agreement; (iii) the Transfer Agents monthly fee and expenses reimbursable under the Transfer Agency and Services Agreement; (iv) the Custodians monthly fee and expenses reimbursable under the Trust Custody Agreement; (v) Exchange listing fees; (vi) U.S. Securities and Exchange Commission (SEC) registration fees; (vii) printing and mailing costs; (viii) costs of maintaining the Trusts website; (ix) audit fees; (x) marketing expenses; and (xi) up to $100,000 per annum in legal expenses. The Sponsor will also pay the costs of the Trusts organization and the initial sale of the Shares, including the applicable SEC registration fees. Delaware Trust Company, a Delaware trust company, acts as the trustee of the Trust for the purpose of creating a Delaware statutory trust in accordance with the DSTA. The Trustee is appointed to serve as the trustee of the Trust in the State of Delaware for the sole purpose of satisfying the requirement of Section 3807(a) of the DSTA that the Trust have at least one trustee with a principal place of business in the State of Delaware. The duties of the Trustee will be limited to (i) accepting legal process served on the Trust in the State of Delaware and (ii) the execution of any certificates required to be filed with the Delaware Secretary of State which the Delaware Trustee is required to execute under the DSTA. To the extent that, at law or in equity, the Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or the Sponsor, such duties and liabilities will be replaced by the duties and liabilities of the Trustee expressly set forth in the Trust Agreement. The Trustee will have no obligation to supervise, nor will it be liable for, the acts or omissions of the Sponsor, Administrator, Transfer Agent, Custodian or any other person. State Street Bank and Trust Company (State Street), the Administrator of the Trust, is generally responsible for the day-to-day administration of the Trust under the Administration Agreement and in accordance



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with the provisions of the Trust Agreement. This includes (i) maintaining the Trusts books of account; (ii) calculating the Trusts NAV in accordance with the procedures outlined in the Trusts registration statement; (iii) transmitting the NAV per Share to the Transfer Agent, the Sponsor, Bats, and other entities as directed by the Sponsor; and (iv) preparing financial information required for the Trusts periodic reports and assisting with the audit of the Trusts financial statements by the Trusts independent auditor. State Street is also the Trusts Transfer Agent and is authorized by the Sponsor under the Trust Agreement to serve as the transfer agent in accordance with the provisions of the Transfer Agency and Services Agreement. The Transfer Agent, among other things, provides transfer agent services with respect to the creation and redemption of Baskets by Authorized Participants. As of the date of this registration statement, Convergex Execution Solutions LLC, KCG Americas LLC, and Virtu Financial BD LLC have each signed an Authorized Participant Agreement with the Trust and, upon the effectiveness of such agreement and the registration statement, may create and redeem Baskets as described below. The Trusts Custodian is Gemini Trust Company, LLC, an affiliate of the Sponsor and a New York State-chartered limited liability trust company that operates under the direct supervision and regulatory authority of the New York State Department of Financial Services (NYSDFS). The Custodian is a fiduciary and must meet the capitalization, compliance, anti-money laundering, consumer protection and cyber security requirements as set forth by the NYSDFS. Although the Trusts bitcoin is not stored in a physical sense, all transactions involving the Trusts bitcoin are recorded on the Bitcoin Networks Blockchain and associated with a public Bitcoin address. The Trusts public Bitcoin addresses are established by the Custodian using its Cold Storage System, which holds the Trusts bitcoin and permits the Trust to move its bitcoin. Access and control of those Bitcoin addresses, and the bitcoin associated with them, is restricted through the public-private key pair relating to each Bitcoin address. The Custodian is responsible for the safekeeping of the private keys used to access and transfer the Trusts bitcoin. The Custodian also facilitates the transfer of bitcoin in accordance with the Administrators instructions pursuant to the terms of the Administration Agreement. Pursuant to the terms of the Trust Custody Agreement, the Custodian will store all of the Trusts bitcoin on a segregated basis in its unique Bitcoin addresses with balances that can be directly verified on the Blockchain. It will provide the Trusts public Bitcoin addresses to the Administrator. The Trusts bitcoin is valued each Business Day using the Gemini Exchange Auction Price. At 4:00 pm. Eastern Time every day, the Gemini Exchange conducts a two-sided auction which is open to all exchange customers, including Authorized Participants and affiliates of the Sponsor. Similar to the closing auction on Bats and other U.S. equities exchanges, the auction process incorporates both auction-only and continuous trading book orders to find a single price at which the most interest is eligible to trade (sometimes called Walrasian equilibrium). Because indicative auction pricing is published publicly throughout the ten (10) minutes prior to the auction, this mechanism allows participants to engage in thorough price discovery while concentrating liquidity and trading volume at a single moment each day. Additionally, the daily two-sided auction on the Gemini Exchange was specifically designed to maximize price discovery and liquidity, which should (i) insulate the Gemini Exchange Auction Price from price swings and volatility, (ii) minimize the effects of momentum pricing, (iii) improve the effectiveness of the arbitrage mechanism for Authorized Participants, and (iv) fairly reflect the value of the Trusts bitcoin. Authorized Participants are permitted to, but not obligated to, participate in the 4:00 p.m. auction on the Gemini Exchange. The Gemini Exchange is owned and operated by the Custodian and is affiliated with the Sponsor. As a facility of a New York State-chartered limited liability trust company, Gemini Exchange operates under the direct supervision and regulatory authority of the NYSDFS. The Gemini Exchange does not receive any compensation from the Trust or the Sponsor for providing the Gemini Exchange Auction Price to the Administrator. The general role, responsibilities and regulation of the Trustee, Sponsor, Administrator, Transfer Agent and Custodian are further described in Sponsor, Trustee, Administrator, Transfer Agent and Custodian,



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respectively. Detailed descriptions of certain specific rights and duties of the Trustee, Sponsor, Administrator, Transfer Agent and Custodian are set forth in Description of the Trust Documents-Description of the Trust Agreement, Description of the Trust Documents-Description of the Administration Agreement, Description of the Trust Documents-Description of the Transfer Agency and Services Agreement, and Description of the Trust Documents-Description of the Trust Custody Agreement, respectively. The Trust Agreement, Administration Agreement, Transfer Agency and Services Agreement and Trust Custody Agreement are collectively referred to herein as the Trust Documents. Trust Overview The investment objective of the Trust is for the Shares to track the price of bitcoin using the Gemini Exchange Auction Price on each Business Day. The Shares are designed for investors seeking a cost-effective and convenient means of gaining investment exposure to bitcoin similar to a direct investment in bitcoin. The Bitcoin Network is a recent technological innovation, and the bitcoin that is created, transferred, used and stored by entities and individuals have certain features associated with several types of assets, most notably commodities and currencies. Apart from the U.S. Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (FinCEN) and the U.S. Internal Revenue Service (IRS), most major U.S. regulators such as the SEC have yet to make official pronouncements or adopt rules providing guidance with respect to the classification and treatment of bitcoin and other Digital Assets for purposes of commodities, tax and securities laws. Although the SEC has not opined on the legal characterization of bitcoin as a security, it has taken various actions against persons or entities misusing bitcoin in connection with fraudulent schemes (i.e., Ponzi scheme), inaccurate and inadequate publicly disseminated information, and the offering of unregistered securities. 3 Commissioners of the CFTC initially expressed the belief that bitcoin meets the definition of a commodity and that the CFTC has regulatory authority over futures and other derivatives based on Digital Assets, subject to facts and circumstances. The Sponsor also espoused the view that, on balance, the important features of bitcoin and other Digital Assets are those that are characteristics of commodities and therefore has referred to and discussed these assets as such. Additional clarity was obtained on September 17, 2015, when, in the Coinflip case, the CFTC instituted and settled administrative proceedings that involved a bitcoin derivatives trading platform and its chief executive officer. The Coinflip order found that the respondents (i) conducted activity related to commodity options transactions without complying with the provisions of the Commodity Exchange Act of 1936, as amended (CEA) and CFTC regulations, and (ii) operated a facility for the trading of swaps without registering the facility as a swap execution facility (SEF) or designated contract market (DCM). The Coinflip order was significant as it is the first time the CFTC determined that bitcoin is properly defined as a commodity under the CEA. Based on this determination, the CFTC applied CEA provisions and CFTC regulations that apply to transactions in commodity options and swaps to the conduct of the bitcoin derivatives trading platform. Also of significance, is that the CFTC appears to have taken the position that bitcoin is not encompassed by the definition of currency under the 3 See, e.g., SEC v. Homero Joshua Garza, GAW Miners, LLC and ZenMiner, LLC, Complaint and Demand for Jury Trial, Case 3:15-cv-01760 (D. Conn. Dec. 1, 2015) (The Commission brought charges in connection with a bitcoin-related Ponzi scheme); In re Erik T. Voorhees, Securities Act Release No. 9592 (June 3, 2014) (The Commission brought an administrative action in connection with the offering of unregistered securities of two bitcoin-related entities); In re BTC Trading, Corp. and Ethan Burnside, Securities Act Release No. 9685 (Dec. 8, 2014) (The Commission brought an administrative action in connection with the operation and offering of securities of two online exchanges, neither of which were registered with the Commission, that accepted payment in bitcoin and primarily listed virtual currency-related companies.); In re Sand Hill Exchange, et al., Securities Act Release No. 9809 (June 17, 2015) (The Commission took legal action against an online exchange that accepted payment in bitcoin in connection with disseminating fraudulent information, among other matters).



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CEA and CFTC regulations. In Coinflip, the CFTC defined bitcoin and other virtual currencies (also known as Digital Assets) as a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value, but does not have legal tender status in any jurisdiction. Bitcoin and other virtual currencies are distinct from real currencies, which are the coin and paper money of the United States or another country that are designated as legal tender, circulate, and are customarily used and accepted as a medium of exchange in the country of issuance. The CFTC affirmed its approach to the regulation of bitcoin and bitcoin-related enterprises on June 2, 2016, when the CFTC settled charges against Bitfinex, a Bitcoin Exchange based in Hong Kong. In its Order, the CFTC found that Bitfinex engaged in illegal, off-exchange commodity transactions and failed to register as a futures commission merchant when it facilitated borrowing transactions among its users to permit the trading of bitcoin on a leveraged, margined or financed basis without first registering with the CFTC. 4 It is not known whether all U.S. or foreign regulators will share this view, adopt a single, different view or espouse a variety of differing views. To date, a U.S. magistrate judge in the U.S. District Court for the Eastern District of Texas 5 and the German Ministry of Finance have ruled that bitcoin is a form of money and a unit of account, respectively; a Florida circuit court judge determined that bitcoin did not qualify as money or tangible wealth; 6 and an opinion from the U.S. District Court for the Northern District of Illinois identified Bitcoin as a unit of account. 7 Additionally, the IRS has classified bitcoin as property that is not currency for U.S. federal income tax purposes. 8 The degree to which such interpretations will become the norm is unknown. The New York State Department of Taxation and Finance, citing the IRS classification, defined bitcoin and other Digital Assets as intangible property, 9 and a number of other states have issued their own guidance regarding the tax treatment of bitcoin for state income or sales tax purposes. In July 2014, the NYSDFS proposed the first U.S. regulatory framework for licensing participants in virtual currency business activity. The proposed regulations, known as the BitLicense, are intended to focus on consumer protection and, after the closure of an initial comment period that yielded 3,746 formal public comments and a reproposal, the NYSDFS issued its final BitLicense regulatory framework in June 2015. The BitLicense regulates the conduct of businesses that are involved in virtual currencies in New York or with New York customers and prohibits any person or entity involved in such activity to conduct activities without a license. In March 2014, the NYSDFS issued a public order initiating a process for accepting charter applications for virtual currency exchanges under the existing New York banking law. In October 2015, the NYSDFS granted a charter under New York State banking law to Gemini Trust Company, LLC, the Trusts Custodian. As a New York State-chartered limited liability trust company, the Custodian operates under the direct supervision and regulatory authority of the NYSDFS. The Custodian is a fiduciary and is required to meet the capitalization, compliance, anti-money laundering, consumer protection and cyber security requirements as set forth by the NYSDFS. 4 See In re BFXNA Inc., Case No. 16-19 (CFTC June 2, 2016). 5 SEC v. Shavers, Memorandum Opinion Regarding the Courts Subject Matter Jurisdiction, Case No. 4:13-CV-00416 (E.D. Texas, Aug. 6, 2013) 6 The State of Florida v. Espinoza, Order Granting Defendants Motion to Dismiss the Information, Case No. F14-2923 (Fla. 11th Cir. Ct. July 22, 2016) (quoting § 896.101(2)(e), Fla. Stat. (2016)). 7 Greene v. Mt. Gox Inc., et al., Memorandum Opinion and Order, Case No. 1:14-cv-01437 (N.D.IL Aug. 26, 2016). 8 Internal Revenue Service, IRS Virtual Currency Guidelines, Notice 2014-14 (Apr. 14, 2014). 9 New York State Department of Taxation and Finance, Tax Department Policy on Transactions Using Convertible Virtual Currency (Dec. 5, 2014).



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Bitcoin has been characterized as a virtual commodity, digital asset, digital currency and virtual currency by other international regulatory bodies. Since December 2013, regulators in jurisdictions including the United States, the United Kingdom and Switzerland have provided greater regulatory clarity, while Chinese, Russian, Icelandic and Vietnamese government officials have taken steps to limit the participation of their respective financial services sectors from directly interacting with the Bitcoin ecosystem, creating additional regulatory uncertainty in those countries. 10 In May 2014, the Central Bank of Bolivia banned the use as currency of digital assets including bitcoin, while the government of Ecuador took steps to limit the use of bitcoin in advance of the issuance of a proposed state-backed Digital Asset. 11 In April 2015, the Japanese Cabinet approved proposed legal changes that would reportedly treat bitcoin and other Digital Assets as included in the definition of currency. These regulations would, among other things, require market participants, including exchanges, to meet certain compliance requirements and be subject to oversight by the Financial Services Agency, a Japanese regulator. These changes were approved by the Japanese Diet in May 2016 and are expected to be effective beginning in 2017. In July 2016, the European Commission released a draft directive that proposed applying counter-terrorism and anti-money laundering regulations to virtual currencies, and, in September 2016, the European Banking authority advised the European Commission to institute new regulation specific to virtual currencies, with amendments to existing regulation as a stopgap measure. 12 The regulatory uncertainty surrounding the treatment of Bitcoin creates risks for the Trust and its Shares. See Risk FactorsRisk Factors Related to the Regulation of the Trust and the Shares. Under applicable Bats rules, the Trusts Shares are considered Commodity-Based Trust Shares, which means a security (i) that is issued by the Trust that holds a specified commodity (bitcoin) deposited with the Trust; (ii) that is issued by the Trust in a specified aggregate minimum number (Basket) in return for the delivery of a quantity of bitcoin (as described herein); and (iii) that, when aggregated in the same specified minimum number (Basket), may be redeemed at a holders request by the Trust which will distribute to the redeeming holder the quantity of bitcoin. Thus, for purposes of the Bats rule, bitcoin is a commodity as defined in the CEA. The Sponsor believes the Trust to be the first ETP in the United States that seeks to track the price of a Digital Asset (a Digital Asset ETP). Some of the distinguishing features of the Trust and its Shares include (i) directly holding bitcoin using the Custodians state-of-the-art proprietary Cold Storage System; (ii) the Custodians New York State limited liability trust company charter; (iii) third-party inspection of the Custodians protocols and internal controls; (iv) the Custodians ability to demonstrate proof of control of the private keys associated with the Trusts bitcoin through monthly, independent auditor examinations and attestations; and (v) the experience of the Sponsors management team in the Bitcoin industry. See Business of the Trust. Investing in the Shares does not insulate the investor from certain risks, including price volatility. See Risk Factors. 10 See e.g., HM Revenue & Customs, Bitcoin and Other Cryptocurrencies, Revenue and Customs Brief 9-2014 (Mar. 3, 2014); Federal Council of Switzerland, Federal Council Report on Virtual Currencies in Response to the Schwaab (13.3687) and Weibel (13.4070) Postulates (June 25, 2014); Central Bank of Iceland, Significant Risk Attached to Use of Virtual Currency, Release No. 9/2014 (Mar. 19, 2014); State Bank of Vietnam, Press Release on Bitcoins and Other Virtual Currencies (Feb. 28, 2014). 11 Central Bank of Bolivia, Resolution 044/2014 (June 5, 2014); National Assembly of Ecuador, Monetary and Financial Code (July 24, 2014). 12 European Commission, Proposal for Amending Directive 2015/849/EU on the Prevention of the Use of the Financial System for the Purposes of Money Laundering or Terrorist Financing and Amending Directive 2009/101/EC, Directive 2016/0208 (July 5, 2016); European Banking Authority, Opinion on the EU Commissions Proposal to Bring Virtual Currencies into the Scope of Directive 2015/849/EU, EBA Opin. 2016-07 (Aug. 11, 2016).



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Emerging Growth Company Status The Trust is an emerging growth company as defined in the Jumpstart Our Business Startups Act (JOBS Act). For as long as the Trust is an emerging growth company, unlike other public companies, it will not be required to:  provide an auditors attestation report on managements assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002;  comply with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory auditor rotation or a supplement to the auditors report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer;  comply with any new audit rules adopted by the PCAOB after April 5, 2012, unless the SEC determines otherwise;  provide certain disclosure regarding executive compensation required of larger public companies; or  obtain shareholder approval of any golden parachute payments not previously approved. The Trust will cease to be an emerging growth company upon the earliest of (i) when it has $1.0 billion or more in annual revenues; (ii) when it is deemed to be a large accelerated filer under Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934, as amended; (iii) when it issues more than $1.0 billion of non-convertible debt over a three-year period; or (iv) the last day of the fiscal year following the fifth anniversary of its initial public offering. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (Securities Act) for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies; however, the Trust is choosing to opt out of such extended transition period, and as a result, the Trust will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that the Trusts decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. Principal Offices The Trustees principal office is located at Little Falls Centre One, 2711 Centerville Road, Wilmington, DE 19808. The Sponsors address is 301 N. Market Street, Suite 1463, Wilmington, DE 19801, and its telephone number is +1 (646) 751-4444. The Administrators and the Transfer Agents principal office is located at One Lincoln Street, Boston, Massachusetts 02111. The Custodians address is 600 Third Avenue, 2nd Floor, New York, NY 10016.



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T HE O FFERING

Offering The Shares represent units of fractional undivided beneficial interest in and ownership of the Trust.

Use of Proceeds Proceeds received by the Trust from the issuance and sale of Baskets, including the initial [ten (10)] Baskets (the Seed Baskets) issued to [INITIAL PURCHASER] in its capacity as the purchaser of the Seed Baskets (the Initial Purchaser) in connection with the formation of the Trust, will consist only of bitcoin. During the life of the Trust, such proceeds will only be (i) held by the Trust; (ii) distributed to Authorized Participants in connection with the redemption of Baskets; (iii) transferred to pay the Sponsors Fee; (iv) transferred and sold as needed to pay the Trusts expenses not assumed by the Sponsor; or (v) sold in connection with the termination and liquidation of the Trust or as otherwise required by law or regulation.

Listing Exchange Bats BZX Exchange, Inc. (Bats).

Exchange Symbol COIN

CUSIP 97425P 107

Overview of the Bitcoin Industry and Market Bitcoin is a Digital Asset that is issued by, and transmitted through, the decentralized, open source protocol of the peer-to-peer Bitcoin Network. The Bitcoin Network hosts the decentralized public transaction ledger, known as the Blockchain, on which all bitcoin is recorded. No single entity owns or operates the Bitcoin Network, the infrastructure of which is collectively maintained by a decentralized user base. Bitcoin can be used to pay for goods and services or can be converted to fiat currencies, such as the U.S. Dollar, at rates determined on bitcoin exchanges (each a Bitcoin Exchange) or in individual end-user-to-end-user transactions under a barter system.

Bitcoin is stored or reflected on the Blockchain, which is a digital record stored in a decentralized manner on the computers of each Bitcoin Network user. The Bitcoin Network software source code includes the protocols that govern the creation of bitcoin and the cryptographic system that secures and verifies Bitcoin transactions. The Blockchain is a canonical record of every bitcoin, every Bitcoin transaction (including the creation or mining of new bitcoin) and every Bitcoin address associated with a quantity of bitcoin. The Bitcoin Network and Bitcoin Network software programs can interpret the Blockchain to determine the exact bitcoin balance, if any, of any public Bitcoin address listed in the Blockchain as having taken part in a transaction on the Bitcoin Network. The Bitcoin Network utilizes the Blockchain to evidence the existence of bitcoin in any public Bitcoin address. A private key controls the transfer or spending of bitcoin from its associated public Bitcoin address. A digital wallet is a collection of private keys and their associated public Bitcoin addresses. The Blockchain is comprised of a digital record, downloaded and stored, in whole or in part, on all Bitcoin Network users software programs. The file includes all blocks that have been solved by miners and is updated to include new blocks as they are solved. As each newly solved block refers back to and connects with the immediately prior solved block, the addition of a new block adds to the Blockchain in a manner similar to a new link being added to a chain. Each new block records outstanding Bitcoin transactions, and outstanding transactions are settled and

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validated through such recording. The Blockchain represents a complete, transparent and unbroken history of all transactions of the Bitcoin Network. Each Bitcoin transaction is broadcast to the Bitcoin Network and recorded in the Blockchain.

Creation and Redemption of

Shares The Trust is expected to issue and redeem Shares from time to time only in one or more whole Baskets. The Trust will issue and redeem the Shares in Baskets only to certain Authorized Participants on an ongoing basis as described in the Plan of Distribution section below. On a creation, Baskets will be distributed to the creating Authorized Participant by the Trust in exchange for the delivery to the Trust of the appropriate number of bitcoin (i.e., bitcoin equal in value to the NAV multiplied by the number of Shares in the Basket). On a redemption, the Trust will distribute bitcoin equal in value to the NAV multiplied by the number of Shares in the Basket to the redeeming Authorized Participant in exchange for the delivery to the Trust of one or more Baskets. On each Business Day, the value of each Basket accepted by the Administrator in a creation or redemption transaction will be the same (i.e., each Basket will initially consist of 100,000 Shares and the value of the Basket will be equal to the value of 100,000 Shares at their net asset value per Share on that day). The quantity of bitcoin required to create a Basket, or to be delivered upon the redemption of a Basket, will gradually decrease over time, due to the accrual of the Trusts expenses, the transfer of the Trusts bitcoin to pay the Sponsors Fee, and the transfer of the Trusts bitcoin to pay any Trust expenses not assumed by the Sponsor. The Trust will not issue or redeem fractions of a Basket. Baskets may be created or redeemed only by Authorized Participants, who may be required to pay a transaction fee (Transaction Fee) to the Transfer Agent for each order to create or redeem Baskets. Authorized Participants may sell to other investors all or part of the Shares included in the Baskets they purchase from the Trust. The Initial Purchaser will not be subject to a Transaction Fee for the purchase of the Seed Baskets. The Trust will not issue fractional Baskets. See Creation and Redemption of Shares for more details.

NAV The NAV is the asset value of the Trust less its liabilities (which include accrued but unpaid fees and expenses) divided by the number of outstanding Shares as of 4:00 p.m. Eastern Time each day Bats is open for regular trading (each a Business Day). The Administrator will calculate the NAV using the daily two-sided 4:00 p.m. Eastern Time auction price of the Gemini Exchange (the Gemini Exchange Auction Price), which is publicly available and will be provided to the Administrator by the Sponsor each Business Day. In the event that the Sponsor determines that the Gemini Exchange Auction Price is not an appropriate basis for evaluation of the Trusts bitcoin on a given Business Day, the Sponsor will instruct the Administrator to use the 4:00 p.m. Eastern Time spot price on the Gemini Exchange or the itBit bitcoin exchange (the itBit Exchange) as an alternative basis for calculating the Trusts NAV on that Business Day. The itBit Exchange is operated by the itBit Trust Company, LLC, a New York State-chartered limited liability trust company that, like the Gemini Exchange, operates under the direct supervision and regulatory oversight of the NYSDFS. Any determination that the Gemini Exchange Auction Price is unavailable or otherwise not an appropriate basis for calculating the Trusts NAV on a given Business Day would be based upon extraordinary criteria in which the operation of the Gemini Exchange is

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disrupted or otherwise experiencing material calculation or reporting irregularities. If the Sponsor determines in good faith that none of the Gemini Exchange Auction Price, the spot price on the Gemini Exchange, or the spot price on the itBit Exchange are reliable for calculating the Trusts NAV on a particular Business Day, including but not limited to situations where it does not reflect material information or events occurring between the time of calculation of such prices and the time the Trusts Shares are valued, bitcoin will be valued by the Sponsor using fair market value pricing as determined in good faith by the Sponsor and calculated by the Administrator. Determining the fair market value of bitcoin involves the consideration of a number of subjective factors and thus the prices for bitcoin may differ from the Gemini Exchange Auction Price or the spot price on the Gemini Exchange or itBit Exchange. The Sponsor may consider the market price for bitcoin on other Bitcoin Exchanges, or in other forums for which bitcoin prices are published publicly. The Sponsor shall not be liable to any person for the determination that the Gemini Exchange Auction Price or an alternative basis for a fair market value of bitcoin is not appropriate as a basis for calculation of the Trusts NAV provided that such determination is made in good faith. The Sponsor will publish the Trusts NAV on the Trusts website as soon as practicable after its calculation by the Administrator. See Valuation of Bitcoin and Definition of NAV.

Trust Expenses The Trusts only ordinary recurring charge is expected to be the remuneration due to the Sponsor (Sponsors Fee). In exchange for the Sponsors Fee, the Sponsor has agreed to assume the ordinary administrative and marketing expenses that the Trust is expected to incur. The Sponsor will also pay the costs of the Trusts organization and the initial sale of the Shares, including the applicable SEC registration fees, as well as certain other Trust expenses as detailed herein.

The Sponsors Fee is [ ] percent per annum of the daily net assets of the Trust and will accrue daily in bitcoin and will be payable in kind (in bitcoin) monthly in arrears. To pay the Sponsors Fee, as soon as practicable after the completion of any calendar month, the Administrator will calculate, using the Gemini Exchange Auction Price on such calculation day (which will be provided to it by the Sponsor in the same manner as it is provided in connection with the daily calculation of the Trusts NAV), the number of bitcoin required to pay the outstanding Sponsors Fee and instruct the Custodian to transfer such bitcoin from the Trust Custody Account to an account maintained by the Custodian for the Sponsor (Sponsor Custody Account). The Sponsor, from time to time, may waive all or a portion of the Sponsors Fee at its discretion for stated periods of time. The Sponsor is under no obligation to continue a waiver after the end of such stated period, and, if such waiver is not continued, the Sponsors Fee will thereafter be paid in full.

The Sponsor is not required to assume extraordinary, nonrecurring expenses (except certain indemnifications amounts that may become owed to the Trustee under the Trust Agreement), therefore the Trust may incur certain extraordinary, nonrecurring expenses (e.g., expenses relating to litigation) that are not contractually assumed by the Sponsor. The Sponsor is also authorized to pay or cause to be paid out of Trust assets other expenses and charges as the Sponsor may, in its sole discretion, deem necessary or proper to incur.

In order to ensure the processing of transfers of bitcoin into and out of the Trust Custody Account, or among public Bitcoin addresses in the Trust

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Custody Account or the Trust Expense Account, the Trust may determine that the payment of a transaction fee to Bitcoin Network miners is prudent. See Overview of the Bitcoin Industry and MarketBitcoin Mining & Creation of New Bitcoin. To the extent that such transaction fees payments are made, the Custodian shall pay for or reimburse the Trust for such transaction fees by the transfer of additional bitcoin in the amount of such fees during the creation and redemption process.

The number of bitcoin to be transferred and sold will vary from time to time depending on the level of the Trusts expenses and the relevant Gemini Exchange Auction Price (for the payment of the Sponsors Fee) or the proceeds of the sales of bitcoin to pay other expenses (for the payment of Trust expenses other than the Sponsors Fee, e.g., extraordinary expenses). See Business of the TrustTrust Expenses. Each delivery, transfer or sale of bitcoin by the Trust to pay the Sponsors Fee or other expenses will be a taxable event for the owners of beneficial interests in the Shares (Shareholders). See United States Federal Income Tax ConsequencesTaxation of U.S. Shareholders.

Termination Events The Trust may be dissolved at the written direction of the Sponsor. At its discretion, the Sponsor may elect to terminate the Trust in certain circumstances, which include, without limitation:

 the Trust is notified that the Shares are delisted from Bats and are not approved for listing on another national securities exchange within five (5) business days of their delisting;

 Shareholders acting in respect of at least seventy-five (75) percent of the outstanding Shares notify the Sponsor that they elect to terminate the Trust;

 thirty (30) days have elapsed since the Trustee notified the Sponsor of the Trustees election to resign and a successor trustee has not been appointed and accepted its appointment;

 the SEC determines that the Trust is an investment company under the Investment Company Act of 1940, as amended (Investment Company Act), and the Sponsor determines that, because of such determination, termination of the Trust is advisable;

 the CFTC determines that the Trust is a commodity pool under the CEA, and the Sponsor determines that, because of such determination, termination of the Trust is advisable;

 the Trust is determined to be a money service business (MSB) under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act and is required to comply with certain FinCEN regulations thereunder or is determined to be a money transmitter (MT) (or equivalent designation) under the laws of any state in which the Trust operates and is required to seek licensing or otherwise comply with state licensing requirements, and the Trust receives notice from the Sponsor that, because of such determination, termination of the Trust is advisable;

 the Trust fails to qualify for treatment, or ceases to be treated, as a grantor trust for U.S. federal income tax purposes, and the Sponsor determines that, because of such tax treatment or change in tax treatment, termination of the Trust is advisable;

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 a United States regulator requires the Trust to shut down or forces the Trust to liquidate its assets;

 the aggregate market capitalization of the Trust, based on the closing price of the Shares, was less than $10 million (as adjusted for inflation by reference to the U.S. Consumer Price Index) at any time after the first anniversary of the Trusts formation and the Sponsor determines, within six (6) months after the last trading date on which the aggregate market capitalization of the Trust was less than $10 million, to terminate the Trust;

 sixty (60) days have elapsed since DTC ceases to act as depository with respect to the Shares and the Sponsor has not identified another depository that is willing to act in such capacity;

 the Trustee elects to terminate the Trust after the Sponsor is conclusively deemed to have resigned effective immediately as a result of the Sponsor being adjudged bankrupt or insolvent, or a receiver of the Sponsor or of its property being appointed, or a trustee or liquidator or any public officer taking charge or control of the Sponsor or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; or

 the Sponsor elects to terminate the Trust after the Trustee, Administrator or the Custodian (or any successor trustee, administrator or custodian) resigns or otherwise ceases to be the trustee, administrator or custodian of the Trust, as applicable, and no replacement trustee, administrator and/or custodian acceptable to the Sponsor is engaged.

The Sponsor may make any such determination in its sole discretion. Upon the termination of the Trust, the Sponsor will cause the Trusts bitcoin to be sold and, after paying or making provision for the Trusts remaining liabilities, distribute the cash proceeds to Shareholders upon the surrender of their Shares. See Description of the Trust AgreementTermination of the Trust.

Authorized Participants Baskets may be created or redeemed only by Authorized Participants. Each Authorized Participant must (i) be a registered broker-dealer or other securities market participant such as a bank or other financial institution which is not required to register as a broker-dealer to engage in securities transactions; (ii) be a direct participant in DTC; and (iii) have entered into an agreement with the Sponsor, subject to acceptance by the Transfer Agent (an Authorized Participant Agreement). To facilitate creation and redemption transactions, Authorized Participants may, but are not required to, establish a bitcoin custody account with the Custodian. In addition, Authorized Participants may, but are not required to, participate in the daily 4:00 p.m. auction on the Gemini Exchange. Authorized Participant Agreements provide the procedures for the creation and redemption of Baskets and for the delivery of bitcoin required for such creations or redemptions. A list of the current Authorized Participants can be obtained from the Administrator or the Sponsor. See Creation and Redemption of Shares for more details.

Clearance and Settlement The Shares will be evidenced by one or more global certificates that the Transfer Agent will issue to DTC. The Shares will be available only in book-entry form. Shareholders may hold their Shares through DTC, if they are direct participants in DTC (DTC Participants), or indirectly through broker-dealers, banks or other entities that are DTC Participants.

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Exchange Listing The Trusts Shares will be listed on Bats. Under applicable rules, the Trusts Shares are considered Commodity-Based Trust Shares, which means a security (i) that is issued by the Trust that holds a specified commodity (bitcoin) deposited with the Trust; (ii) that is issued by the Trust in a specified aggregate minimum number (Basket) in return for the delivery of a quantity of bitcoin (as described herein); and (iii) that, when aggregated in the same specified minimum number (Basket), may be redeemed at an Authorized Participants request by the Trust which will distribute to the redeeming Authorized Participant the quantity of bitcoin.

Summary of Financial Condition

As of the close of business on [ ], 2017, the net asset value of the Trust, which represents the value of the bitcoin deposited into and held by the Trust in exchange for the Seed Baskets, less liabilities of the Trust (which include accrued but unpaid fees and expenses), was $[ ] and the NAV was $[ ]. See Statement of Assets and Liabilities elsewhere in this prospectus.

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R ISK F ACTORS

You should consider carefully the risks described below before making an investment decision. You should also refer to the other information included in this prospectus, including the Trusts financial statements and related notes.

Overview of the Bitcoin Industry and Market

Bitcoin is a type of Digital Asset that is issued by, and transmitted through, the decentralized, open source protocol of the peer-to-peer Bitcoin Network. The Bitcoin Network hosts the decentralized public transaction ledger, known as the Blockchain, on which all bitcoin is recorded. No single entity owns or operates the Bitcoin Network; the infrastructure is collectively maintained by a decentralized user base. Bitcoin can be used to pay for goods and services or can be converted to fiat currencies, such as the U.S. Dollar, at rates determined on Bitcoin Exchanges or in individual end-user-to-end-user transactions under a barter system. See Uses of BitcoinBitcoin Exchange Market, below.

Bitcoin is stored or reflected on the Blockchain, which is a digital record stored in a decentralized manner on the computers of each Bitcoin Network user. The Bitcoin Network software source code includes the protocols that govern the creation of bitcoin and the cryptographic system that secures and verifies Bitcoin transactions. The Blockchain is a canonical record of every bitcoin, every Bitcoin transaction (including the creation or mining of new bitcoin) and every Bitcoin address associated with a quantity of bitcoin. The Bitcoin Network and Bitcoin Network software programs can interpret the Blockchain to determine the exact bitcoin balance, if any, of any public Bitcoin address listed in the Blockchain as having taken part in a transaction on the Bitcoin Network. The Bitcoin Network utilizes the Blockchain to evidence the existence of bitcoin in any public Bitcoin address. A Bitcoin private key controls the transfer or spending of bitcoin from its associated public Bitcoin address. A Bitcoin wallet is a collection of private keys and their associated public Bitcoin addresses.

The Blockchain is comprised of a digital record, downloaded and stored, in whole or in part, on all Bitcoin Network users software programs. The file includes all blocks that have been solved by miners and is updated to include new blocks as they are solved. See Overview of the Bitcoin Industry and MarketBitcoin Mining & Creation of New Bitcoin. As each newly solved block refers back to and connects with the immediately prior solved block, the addition of a new block adds to the Blockchain in a manner similar to a new link being added to a chain. Each new block records outstanding Bitcoin transactions, and outstanding transactions are settled and validated through such recording. The Blockchain represents a complete, transparent and unbroken history of all transactions on the Bitcoin Network. Each Bitcoin transaction is broadcast to the Bitcoin Network and recorded in the Blockchain.

The Bitcoin Network is decentralized and does not rely on either governmental authorities or financial institutions to create, transmit or determine the value of bitcoin. Rather, bitcoin is created and allocated by the Bitcoin Network protocol through a mining process subject to a strict, well-known issuance schedule. The value of bitcoin is determined by the supply of and demand for bitcoin in the bitcoin exchange market (Bitcoin Exchange Market) (and in private end-user-to-end-user transactions), as well as the number of merchants that accept them. As Bitcoin transactions can be broadcast to the Bitcoin Network by any users Bitcoin Network software and bitcoin can be transferred without the involvement of intermediaries or third parties, there are currently little or no transaction costs in direct peer-to-peer transactions on the Bitcoin Network. Third-party service providers such as Bitcoin Exchanges and third-party Bitcoin payment processing services may charge fees for processing transactions and for converting, or facilitating the conversion of, bitcoin to or from fiat currency.

The Bitcoin Network was initially contemplated in a white paper that also described bitcoin and the operating software to govern the Bitcoin Network. The white paper was purportedly authored by Satoshi Nakamoto; however, no individual with that name has been reliably identified as Bitcoins creator, and the

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general consensus is that the name is a pseudonym for the actual inventor or inventors. The first bitcoin was created in 2009 after Nakamoto released the Bitcoin Network source code (the software and protocol that created and launched the Bitcoin Network). Since its introduction, the Bitcoin Network has been under active development by a group of contributors currently headed by Wladimir J. van der Laan, who was appointed project maintainer in April 2014 by Gavin Andresen (who was previously appointed maintainer by Satoshi Nakamoto in 2010). As an open source project, Bitcoin is not represented by an official organization or authority.

Because of the relative novelty of the Bitcoin ecosystem, including uncertainty about potential regulation of bitcoin, the Trust will be subject to a number of risk factors set forth below.

Risk Factors Related to the Bitcoin Network and Bitcoin

The loss or destruction of a private key required to transfer the Trusts bitcoin may be irreversible. The Custodians loss of access to a private key associated with a public Bitcoin address that holds the Trusts funds could adversely affect an investment in the Shares.

Bitcoin can only be transferred with the private key associated with the public Bitcoin address in which the bitcoin is held. The Trust safeguards and securely stores the private keys associated with the Trusts public Bitcoin addresses by engaging the Custodian to use its Cold Storage System. To the extent a private key is lost, destroyed, exfiltrated or otherwise compromised and no backup of the private key is accessible, the Custodian will be unable to transfer the Trusts bitcoin held in the public Bitcoin addresses associated with that private key. Consequently, such funds will effectively be lost, which could adversely affect an investment in the Shares.

The further development and acceptance of the Bitcoin Network and other Digital Asset systems, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of the Bitcoin Network may adversely affect an investment in the Shares.

A Digital Asset such as bitcoin may be used, among other things, to buy and sell goods and services. The Bitcoin Network and other Digital Asset networks are a new and rapidly evolving industry of which the Bitcoin Network is a prominent, but not unique, part. The growth of the Digital Asset industry in general, and the Bitcoin Network in particular, is subject to a high degree of uncertainty. The factors affecting the further development of the Digital Asset industry, as well as the Bitcoin Network, include:

 continued worldwide growth in the adoption and use of bitcoin and other Digital Assets;

 government and quasi-government regulation of bitcoin and other Digital Assets and their use, or restrictions on or regulation of access to and operation of the Bitcoin Network or similar Digital Asset systems;

 the maintenance and development of the open-source software protocol of the Bitcoin Network;

 changes in consumer demographics and public tastes and preferences;

 the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; and

 general economic conditions and the regulatory environment relating to Digital Assets.

The Trust is not actively managed and will not have any strategy relating to the development of the Bitcoin Network. Furthermore, the Sponsor cannot be certain as to the impact of the listing of the Trust and the expansion of its bitcoin holdings on the Digital Asset industry and the Bitcoin Network. A decline in the popularity or acceptance of the Bitcoin Network may harm the price of the Shares. There is no assurance that the Bitcoin Network, or the service providers necessary to accommodate it, will continue in existence or grow. Furthermore, there is no assurance that the availability of and access to Digital Asset service providers will not be negatively affected by government regulation or supply and demand of bitcoin.

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Currently, there is relatively limited use of bitcoin in the retail and commercial marketplace in comparison to relatively extensive use by speculators, thus contributing to price volatility that could adversely affect an investment in the Shares.

As relatively new products and technologies, bitcoin and the Bitcoin Network have only recently become selectively accepted as a means of payment for goods and services by many major retail and commercial outlets, and use of bitcoin by consumers to pay such retail and commercial outlets remains limited. Banks and other established financial institutions may refuse to process funds for Bitcoin transactions; process wire transfers to or from bitcoin exchanges, Bitcoin-related companies or service providers; or maintain accounts for persons or entities transacting in bitcoin. Conversely, a significant portion of bitcoin demand is generated by speculators and investors seeking to profit from the short- or long-term holding of bitcoin. Price volatility undermines bitcoins role as a medium of exchange as retailers are much less likely to accept it as a form of payment. Market capitalization for bitcoin as a medium of exchange and payment method may always be low. A lack of expansion by bitcoin into retail and commercial markets, or a contraction of such use, may result in increased volatility or a reduction in the Gemini Exchange Auction Price, either of which could adversely impact an investment in the Shares. The Sponsor believes that, like any commodity, bitcoin will fluctuate in value, but over time will gain a level of acceptance as a store of value, similar to certain precious metals.

Significant Bitcoin Network contributors could propose amendments to the Bitcoin Networks protocols and software that, if accepted and authorized by the Bitcoin Network, could adversely affect an investment in the Shares.

A small group of individuals contribute to the Bitcoin Core project on Github. This group of contributors is currently headed by Wladimir J. van der Laan, the current lead maintainer. These individuals can propose refinements or improvements to the Bitcoin Networks source code through one or more software upgrades that alter the protocols and software that govern the Bitcoin Network and the properties of bitcoin, including the irreversibility of transactions and limitations on the mining of new bitcoin. Proposals for upgrades and discussions relating thereto take place on online forums. For example, there is an ongoing debate regarding altering the Blockchain by increasing the size of blocks to accommodate a larger volume of transactions. Although some proponents support an increase, other market participants oppose an increase to the block size as it may deter miners from confirming transactions and concentrate power into a smaller group of miners. To the extent that a significant majority of the users and miners on the Bitcoin Network install such software upgrade(s), the Bitcoin Network would be subject to new protocols and software that may adversely affect an investment in the Shares. In the event a developer or group of developers proposes a modification to the Bitcoin Network that is not accepted by a majority of miners and users, but that is nonetheless accepted by a substantial plurality of miners and users, two or more competing and incompatible Blockchain implementations could result. This is known as a hard fork. In such a case, the hard fork in the Blockchain could materially and adversely affect the perceived value of bitcoin as reflected on one or both incompatible Blockchains, and thus the value of the Trusts bitcoin. See Risk FactorsThe acceptance of Bitcoin Network software patches or upgrades by a significant, but not overwhelming, percentage of the users and miners in the Bitcoin Network could result in a hard fork in the Blockchain . The Sponsor believes that there will be ongoing and continual revisions and improvements in the various aspects of the Bitcoin Network. The Sponsor will monitor developments in the Bitcoin Network and the potential impact of such developments on the Trust.

The open-source structure of the Bitcoin Network protocol means that the contributors to the protocol are generally not directly compensated for their contributions in maintaining and developing the protocol. A failure to properly monitor and upgrade the protocol could damage the Bitcoin Network and an investment in the Shares.

The Bitcoin Network operates based on an open-source protocol maintained by contributors, largely on the Bitcoin Core project on GitHub. As an open source project, Bitcoin is not represented by an official organization or authority. As the Bitcoin Network protocol is not sold and its use does not generate revenues for contributors,

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contributors are generally not compensated for maintaining and updating the Bitcoin Network protocol. Although the MIT Media Labs Digital Currency Initiative funds the current maintainer Wladimir J. van der Laan, among others, this type of financial incentive is not typical. The lack of guaranteed financial incentive for contributors to maintain or develop the Bitcoin Network and the lack of guaranteed resources to adequately address emerging issues with the Bitcoin Network may reduce incentives to address the issues adequately or in a timely manner. This may adversely affect an investment in the Shares.

If a malicious actor obtains control in excess of fifty (50) percent of the processing power (or aggregate hashrate) active on the Bitcoin Network, it is possible that such actor could manipulate the Blockchain in a manner that adversely affects an investment in the Shares or the ability of the Trust to operate.

If a malicious actor obtains a majority of the processing power (referred to herein as aggregate hashrate) dedicated to mining on the Bitcoin Network, it will be able to exert unilateral control over the addition of blocks to the Blockchain. As long as the malicious actor enjoys this majority it may be able to double-spend its own bitcoin (i.e., spend the same bitcoin in two or more conflicting transactions) as well as prevent the confirmation of other Bitcoin transactions. If such a scenario were to materialize, it could adversely affect an investment in the Shares or the ability of the Trust to operate.

In 2014, a specific mining pool approached and appeared to briefly exceed the threshold of fifty (50) percent of the aggregate hashrate on the Bitcoin Network. Reports about this incident indicate that such threshold was surpassed for only a short period, and there are no reports of any malicious activity by the mining pool. Furthermore, pool participants appear to have redirected their hashrate in the mining pool to other pools on a voluntary basis, which is customary when a mining pool exceeds forty (40) percent of the aggregate hashrate on the Bitcoin Network. Nevertheless, the approach to and possible crossing of the fifty (50) percent threshold indicate a greater risk that a single mining pool could exert authority over the validation of Bitcoin transactions. To the extent that the Bitcoin ecosystem, contributors and the administrators of mining pools, do not act to ensure greater decentralization of Bitcoin mining aggregate hashrate, the feasibility of a malicious actor obtaining in excess of fifty (50) percent of the aggregate hashrate on the Bitcoin Network (e.g., through control of a large mining pool or through hacking such a mining pool) will increase, which may adversely impact an investment in the Shares. Additionally, there are some academics and market participants who believe the applicable threshold required to exert authority over the Bitcoin Network could be less than fifty (50) percent, which would increase the chances of a malicious actor exerting authority over the Bitcoin Network.

If the award of bitcoin for solving blocks and transaction fees for recording transactions are not sufficiently high to incentivize miners, miners may cease expending hashrate to solve blocks and confirmations of transactions on the Blockchain could be slowed temporarily. A reduction in the hashrate expended by miners on the Bitcoin Network could increase the likelihood of a malicious actor obtaining control in excess of fifty (50) percent of the aggregate hashrate active on the Bitcoin Network or the Blockchain, potentially permitting such actor to manipulate the Blockchain in a manner that adversely affects an investment in the Shares or the ability of the Trust to operate.

As the award of new bitcoin for solving blocks declines, and if transaction fees are not sufficiently high, miners may not have an adequate incentive to continue mining and may cease their mining operations. The current fixed reward for solving a new block is twelve and a half (12.5) bitcoin per block; the reward decreased from twenty-five (25) bitcoin in July 2016. It is estimated that it will halve again in about four (4) years. This reduction may result in a reduction in the aggregate hashrate of the Bitcoin Network as the incentive for miners will decrease. Moreover, miners ceasing operations would reduce the aggregate hashrate on the Bitcoin Network, which would adversely affect the confirmation process for transactions (i.e., temporarily decreasing the speed at which blocks are added to the Blockchain until the next scheduled adjustment in difficulty for block solutions) and make the Bitcoin Network more vulnerable to a malicious actor obtaining control in excess of fifty (50) percent of the aggregate hashrate on the Bitcoin Network. Periodically, the Bitcoin Network has adjusted the difficulty for block solutions so that solution speeds remain in the vicinity of the expected ten (10) minute

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confirmation time targeted by the Bitcoin Network protocol. The Sponsor believes that from time to time there will be further considerations and adjustments to the Bitcoin Network regarding the difficulty for block solutions. More significant reductions in aggregate hashrate on the Bitcoin Network could result in material, though temporary, delays in block solution confirmation time. Any reduction in confidence in the confirmation process or aggregate hashrate of the Bitcoin Network may negatively impact the value of bitcoin, which will adversely impact an investment in the Shares.

As the number of bitcoin awarded for solving a block in the Blockchain decreases, the incentive for miners to continue to contribute hashrate to the Bitcoin Network will transition from a set reward to transaction fees. Either the requirement from miners of higher transaction fees in exchange for recording transactions in the Blockchain or a software upgrade that automatically charges fees for all transactions may decrease demand for bitcoin and prevent the expansion of the Bitcoin Network to retail merchants and commercial businesses, resulting in a reduction in the price of bitcoin that could adversely impact an investment in the Shares.

In order to incentivize miners to continue to contribute hashrate to the Bitcoin Network, the Bitcoin Network may either formally or informally transition from a set reward to transaction fees earned upon solving for a block. This transition could be accomplished by miners independently electing to record in the blocks they solve only those transactions that include payment of a transaction fee. If transaction fees paid for Bitcoin transactions become too high, the marketplace may be reluctant to accept bitcoin as a means of payment and existing users may be motivated to switch from bitcoin to another Digital Asset or back to fiat currency. Decreased use and demand for bitcoin may adversely affect their value and result in a reduction in the Gemini Exchange Auction Price and the price of the Shares.

To the extent that the profit margins of Bitcoin mining operations are low, operators of Bitcoin mining operations are more likely to immediately sell bitcoin earned by mining in the Bitcoin Exchange Market (defined below), resulting in a reduction in the price of bitcoin that could adversely impact an investment in the Shares.

Over the past two (2) years, Bitcoin Network mining operations have evolved from individual users mining with computer processors, graphics processing units and first-generation application-specific integrated circuit processors (ASICs). Currently, new hashrate brought onto the Bitcoin Network is predominantly added by incorporated and unincorporated professionalized mining operations. Professionalized mining operations may use proprietary hardware or sophisticated and customized ASICs. They require the investment of significant capital for the acquisition of this hardware, the leasing of operating space (often in data centers or warehousing facilities), incurring of electricity costs and the employment of technicians to operate the mining farms. As a result, professionalized mining operations are of a greater scale than prior Bitcoin Network miners and have more defined, regular expenses and liabilities. These regular expenses and liabilities require professionalized mining operations to more immediately sell bitcoin earned from mining operations on one of the various bitcoin exchanges (each a Bitcoin Exchange and collectively, the Bitcoin Exchange Market), whereas it is believed that individual miners in past years were more likely to hold newly mined bitcoin for more extended periods. The immediate selling of newly mined bitcoin greatly increases the supply of bitcoin on the Bitcoin Exchange Market, creating downward pressure on the price of bitcoin.

The extent to which the value of bitcoin mined by a professionalized mining operation exceeds the allocable capital and operating costs determines the profit margin of such operation. A professionalized mining operation may be more likely to sell a higher percentage of its newly mined bitcoin rapidly if it is operating at a low profit marginand it may partially or completely cease operations if its profit margin is negative. In a low profit margin environment, a higher percentage could be sold into the Bitcoin Exchange Market more rapidly, thereby potentially reducing bitcoin prices. Lower bitcoin prices could result in further tightening of profit margins, particularly for professionalized mining operations with higher costs and more limited capital reserves, creating a network effect that may further reduce the price of bitcoin until mining operations with higher operating costs

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become unprofitable and remove mining power from the Bitcoin Network. The network effect of reduced profit margins resulting in greater sales of newly mined bitcoin could result in a reduction in the price of bitcoin that could adversely impact an investment in the Shares.

To the extent that any miners cease to record transactions in solved blocks, transactions that do not include the payment of a transaction fee will not be recorded on the Blockchain until a block is solved by a miner who does not require the payment of transaction fees. Any widespread delays in the recording of transactions could result in a loss of confidence in the Bitcoin Network, which could adversely impact an investment in the Shares.

To the extent that any miners cease to record transaction in solved blocks, such transactions will not be recorded on the Blockchain. Currently, there are no known incentives for miners to elect to exclude the recording of transactions in solved blocks; however, to the extent that any such incentives arise (e.g., a collective movement among miners or one or more mining pools forcing Bitcoin users to pay transaction fees as a substitute for or in addition to the award of new bitcoin upon the solving of a block), actions of miners solving a significant number of blocks could delay the recording and confirmation of transactions on the Blockchain. Any systemic delays in the recording and confirmation of transactions on the Blockchain could result in greater exposure to double-spending transactions and a loss of confidence in the Bitcoin Network, which could adversely impact an investment in the Shares.

The acceptance of Bitcoin Network software patches or upgrades by a significant, but not overwhelming, percentage of the users and miners in the Bitcoin Network could result in a hard fork in the Blockchain, resulting in the operation of two separate and incompatible networks until such time as the forked Blockchains are merged, if ever. The temporary or permanent existence of forked Blockchains could adversely impact an investment in the Shares.

Bitcoin is an open source project and, although there is an influential group of contributors in the Bitcoin community, there is no designated developer or group of developers who formally control the Bitcoin Network. Any individual can download the Bitcoin Network software and make any desired modifications, which are proposed to users and miners on the Bitcoin Network through modifications typically posted to the Bitcoin development forum on GitHub. A substantial majority of miners and Bitcoin users must affect those software modifications; otherwise, such miners and Bitcoin users would become substantially less relevant to the overall Bitcoin Network. Since the Bitcoin Networks inception, modifications to the Bitcoin Network have been accepted by the vast majority of users and miners, ensuring that the Bitcoin Network remains a coherent economic system; however, a developer or group of developers could potentially propose a modification to the Bitcoin Network that is not accepted by a vast majority of miners and users, but that is nonetheless accepted by a substantial plurality of miners and users. In such a case, and if the modification is not compatible with the dominant implementation of Bitcoin Network software, a deviation or hard fork in the Blockchain could develop, and two separate Bitcoin Networks could result, one running the pre-modification software program and the other running the modified version (i.e., a second Bitcoin network). Such a hard fork in the Blockchain typically would be addressed by community-led efforts to reunite the forked Blockchains, and several prior forks have been resolved successfully. However, a Digital Asset network fork of this kind could materially and adversely affect the perceived value of bitcoin as reflected on one or both incompatible Blockchains. The Sponsor and the Custodian will work with members of the Bitcoin Network, including the core developers, to attempt to resolve any Digital Asset network fork promptly and in a manner that is protective of the Trusts assets. This kind of split in the Bitcoin Network also could materially and adversely affect the Gemini Exchange Auction Price (and thus the value of the Shares) and, in the worst case scenario, harm the sustainability of the Bitcoin Networks economy. Additionally, a Digital Asset hard fork will decrease the number of users and miners available to each fork of the Blockchain as the users and miners on each fork Blockchain will not be assessable to the other Blockchain.

Because proposed modifications are affected at a particular Blockchain block number, it is possible to forecast the approximate date and time of its implementation. In the event of an upcoming modification to the

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Bitcoin Network that could potentially result in a hard fork with two separate and incompatible Bitcoin Networks, the Custodian, in consultation with the Sponsor, will elect to support the Bitcoin Network that has the greatest cumulative computational difficulty for the forty-eight (48) hour period following a given hard fork, in order to engage in bitcoin transactions and the valuation of bitcoin. During this forty-eight (48) hour period and for the twenty-four (24) hour period prior to the anticipated fork, creation and redemption of baskets will be halted. The greatest cumulative computational difficulty is defined as the total threshold number of hash attempts required to mine all existing blocks in the respective Blockchain, accounting for potential differences in relative hash difficulty. If the Custodian, in consultation with the Sponsor, is unable to make a conclusive determination about which Bitcoin Network has the greatest cumulative computational difficulty after forty-eight (48) hours, or determines in good faith that this is not a reasonable criterion upon which to make a determination, the Custodian will support the Bitcoin Network which it deems in good faith is most likely to be supported by a greater number of users and miners. Under the terms of the Trust Custody Agreement, the Trust may be required to indemnify the Custodian for any losses arising in connection with its determination to elect the Bitcoin Network with the greatest computational difficulty in the event of a hard fork.

If, at or after the time of such election, users and miners support of the selected Bitcoin Network diminishes, this could adversely affect the value of the Trusts bitcoin and the value of an investment in the Shares.

Intellectual property rights claims may adversely affect the operation of the Bitcoin Network.

Third parties may assert intellectual property claims relating to the holding and transfer of Digital Assets and their source code. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in the Bitcoin Networks long-term viability or the ability of end-users to hold and transfer bitcoin may adversely affect an investment in the Shares. Additionally, a meritorious intellectual property claim could prevent the Trust and other end-users from accessing the Bitcoin Network or holding or transferring their bitcoin, which could force the termination of the Trust and the liquidation of the Trusts bitcoin (if such liquidation of the Trusts bitcoin is possible). As a result, an intellectual property claim against the Trust or other large Bitcoin Network participants could adversely affect an investment in the Shares.

Risk Factors Related to the Bitcoin Exchange Market

The value of the Shares relates directly to the value of the bitcoin held by the Trust and fluctuations in the price of bitcoin could adversely affect an investment in the Shares.

The Shares are designed to track as closely as possible the price of bitcoin, as measured at 4:00 p.m. Eastern Time using the Gemini Exchange Auction Price on each Business Day, less the Trusts liabilities (which include accrued but unpaid fees and expenses). The value of the Shares is directly related to the value of bitcoin held by the Trust. The price of bitcoin has fluctuated widely over the past three (3) years. Several factors may affect the Gemini Exchange Auction Price, including, but not limited to:

 Total bitcoin in existence;

 Global bitcoin demand, which is influenced by the growth of retail merchants and commercial businesses acceptance of bitcoin as payment for goods and services, the security of online Bitcoin Exchanges and public Bitcoin addresses that hold bitcoin, the perception that the use and holding of bitcoin is safe and secure, the lack of regulatory restrictions on their use, and the reputation regarding the use of bitcoin for illicit purposes;

 Global bitcoin supply, which is influenced by similar factors as global bitcoin demand, in addition to fiat currency needs by miners and taxpayers who may liquidate bitcoin holdings to meet tax obligations;

 Investors expectations with respect to the rate of inflation of fiat currencies;

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 Investors expectations with respect to bitcoins rate of deflation;

 Interest rates;

 Currency exchange rates, including the rates at which bitcoin may be exchanged for fiat currencies;

 Fiat currency withdrawal and deposit policies of the Gemini Exchange and liquidity on the Gemini Exchange;

 Interruptions in service from or failures of the Gemini Exchange (interruptions or failures at other Bitcoin Exchanges may also have an indirect affect);

 Theft, or news of such theft, of bitcoin from individuals or bitcoin retail and service providers, including companies that buy, sell, process payments or store bitcoin;

 Investment and trading activities of large investors, including private and registered funds, that may directly or indirectly invest in bitcoin;

 Monetary policies of governments, trade restrictions, currency devaluations and revaluations;

 Regulatory measures, if any, that restrict the use of bitcoin as a form of payment or the purchase of bitcoin on the Bitcoin Market;

 The availability of companies providing bitcoin-related services;

 The maintenance and development of the open-source software protocol of the Bitcoin Network;

 Increased competition from other forms of Digital Assets or means of payments;

 Global or regional political, economic or financial events and situations;

 Expectations among Bitcoin economy participants that the value of bitcoin will soon change; and

 Fees, including miners fees, associated with processing bitcoin transactions.

In addition, investors should be aware that there is no assurance that bitcoin will maintain its long-term value in terms of purchasing power in the future or that the acceptance of bitcoin for payments by mainstream retail merchants and commercial businesses will continue to grow. In the event that the price of bitcoin declines, the Sponsor expects the value of an investment in the Shares to decline proportionately.

The Gemini Exchange Auction Price may be subject to momentum pricing, which may lead to greater volatility and adversely affect an investment in the Shares.

Momentum pricing typically is associated with growth stocks and other assets whose valuation, as determined by the investing public, accounts for anticipated future appreciation in value. The Sponsor believes that momentum pricing of bitcoin has resulted, and may continue to result, in speculation regarding future appreciation in the value of bitcoin, inflating the price of bitcoin and making it more volatile. As a result, bitcoin may be more likely to fluctuate in value due to changing investor confidence in future appreciation in the Gemini Exchange Auction Price, which could adversely affect an investment in the Shares.

Pricing on the Gemini Exchange can be volatile and can adversely affect an investment in the Shares.

The Gemini Exchange has a limited history, having opened for trading on October 8, 2015. The calculation of the Gemini Exchange Auction Price as of 4:00 p.m. Eastern Time on each Business Day will be used for the calculation of the Trusts NAV. See Overview of the Bitcoin Industry and MarketBitcoin Value.

The price of bitcoin on public Bitcoin Exchanges has a limited, six-year history. During such history, bitcoin prices on the Bitcoin Exchange Market as a whole, and on Bitcoin Exchanges individually, have been volatile

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and subject to influence by many factors including the levels of liquidity on Bitcoin Exchanges. Even the largest Bitcoin Exchanges have been subject to operational interruption (e.g., the temporary shutdown of Mt. Gox due to distributed denial of service attacks (DDoS) attacks by hackers and/or malware, and its permanent closure in February 2014). In addition, in August 2016, a security breach at Bitfinex, a large, Hong Kong based Bitcoin Exchange, resulted in the loss of one hundred twenty thousand (120,000) bitcoin. Events such as these may limit the liquidity of bitcoin on the Bitcoin Exchange Market and result in volatile prices and a reduction in confidence in the Bitcoin Network and the Bitcoin Exchange Market.

The price of bitcoin on the Gemini Exchange may also be impacted by policies on or interruptions in the deposit or withdrawal of fiat currency that may be out of the control of the Gemini Exchange. Customers may buy or sell bitcoin for fiat currency or transfer bitcoin to other public Bitcoin addresses. Operational limits (including regulatory, exchange policy, technical limits or operational limits relating to another financial institution) on the size or settlement speed of fiat currency deposits by customers into the Gemini Exchange may reduce demand on the Gemini Exchange, resulting in a reduction in the bitcoin price on the Gemini Exchange. Operational limits (including regulatory, exchange policy, technical limits or operational limits relating to another financial institution) on the size or settlement speed of fiat currency withdrawals by customers into the Gemini Exchange may reduce supply on the Gemini Exchange, resulting in an increase in the bitcoin price on the Gemini Exchange. To the extent that fees for the transfer of bitcoin either directly or indirectly occur between Bitcoin Exchanges, the impact on bitcoin prices of operational limits on fiat currency deposits and withdrawals may be reduced by exchange shopping among Bitcoin Exchange customers. For example, a delay in U.S. Dollar withdrawals on one site may temporarily increase the price on such site by reducing supply (i.e., sellers transferring bitcoin to another exchange without