Form S-1

As filed with the Securities and Exchange Commission on July 1, 2013

Registration No. 333-[_]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

WINKLEVOSS BITCOIN TRUST

Sponsored by Math-Based Asset Services LLC

(Exact name of Registrant as specified in its charter)

New York 6221 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.)

30 West 24th Street, 4th Floor

New York, NY 10010

(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 (302) 658-7581

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

Copies to:

Evan L. Greebel, Esq.,

Kathleen H. Moriarty, Esq., and

Raymond Mouhadeb, Esq.

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, NY 10022

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. x

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 x (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 Winklevoss Bitcoin Shares 1,000,000 $20.09 $20,090,000.00 $2,470.28

(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 represents 0.20 Bitcoins and is offered at a per Share price equal to the price equal to the number of Bitcoins comprising such Share. The price of Bitcoins is based on a weighted average of the average of the high and low transaction prices of Bitcoins on June 27, 2013 on three major Bitcoin Exchange sites: Mt. Gox K.K., Bitstamp and BTC-e.

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 July 1, 2013

[LOGO]

[_] W INKLEVOSS B ITCOIN S HARES

WINKLEVOSS BITCOIN TRUST

The Winklevoss Bitcoin Trust (Trust) will issue Winklevoss Bitcoin Shares (Shares) which represent units of fractional undivided beneficial interest in and ownership of the Trust. Math-Based Asset Services LLC is the sponsor of the Trust (Sponsor) and [TRUSTEE] is the trustee and custodian of the Trust (Trustee) using proprietary and patent-pending technology to administer the Trust. The Trust intends to issue additional Shares on a continuous basis.

The Shares may be purchased from the Trust only in one or more blocks of [50,000] Shares (a block of [50,000] Shares is called a Basket). The Trust will issue Shares in Baskets to certain authorized participants (Authorized Participants) on an ongoing basis as described in Plan of Distribution. Baskets will be offered continuously at the net asset value (NAV) for [50,000] Shares on the day that an order to create a Basket is accepted by the Trustee. The Trust will not issue fractions of a Basket.

Prior to this offering, there has been no public market for the Shares. The Shares will trade on the [EXCHANGE] under the symbol [TICKER].

Investing in the Shares involves significant risks. See Risk Factors starting on page [8].

Neither the Securities and Exchange Commission (SEC) 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 will issue Shares from time to time in Baskets, as described in Creation and Redemption of Shares. 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 the Bitcoins represented by each Share and the trading price of the Shares on the [EXCHANGE] at the time of each sale.

On [ ], 2013, an Initial Purchaser, subject to conditions, purchased [ ],000 Shares, which comprise the initial Baskets, as described in Plan of Distribution. Delivery of the initial Baskets will be made on or about [ ], 2013. The Trust received all proceeds from the offering of the initial Baskets in set amounts of Bitcoins in an amount equal to the full price for the initial Baskets. The Bitcoins representing a Share in the initial Baskets was comprised of [ ] Bitcoins.

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

(1) The initial Baskets were created at a per Share price equal to the Blended Bitcoin Price of [ ] Bitcoins on the date of formation of the Trust.

The date of this prospectus is [ ], 2013.

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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STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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 Math-Based Assets, Bitcoins 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. Moreover, neither the Sponsor nor any other person assumes responsibility for the accuracy or completeness of the forward-looking statements. Neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements to conform such statements to actual results or to reflect a change in the Sponsors expectations or predictions.

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PROSPECTUS SUMMARY 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 [8], before making an investment decision about the Shares. Trust Structure The Trust is a common law trust, formed on [ ], 2013 under New York law pursuant to the Trust Agreement between the Sponsor and the Trustee (Trust Agreement), which sets forth the respective rights and duties of the Sponsor and the Trustee and establishes the segregated custody account of the Trust that will be used to hold the Bitcoins deposited with the Trust (Trust Custody Account). The Trust holds Bitcoins, a digital commodity based on an open source cryptographic protocol existing on the online, end-user-to-end-user network hosting the public transaction ledger, known as the Blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing the issuance of and transactions in Bitcoins (the Bitcoin Network). The Trust is expected from time to time to issue Baskets in exchange for deposits of Bitcoins and to distribute Bitcoins in connection with redemptions of Baskets. The investment objective of the Trust is for the Shares to reflect the performance of a weighted average price of Bitcoins (Blended Bitcoin Price), less the Trusts expenses. The Sponsor believes that, for many investors, the Shares will represent a cost-effective and convenient means to access exposure to Bitcoins. 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 [TICKER] on the [EXCHANGE]. The Trusts Sponsor is 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 Management LLC. Under the Delaware Limited Liability Company Act and the governing documents of the Sponsor, Winklevoss Capital Management LLC, 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 of certain patent-pending intellectual property regarding the operation of the Trust and the Trusts hardware and software security system (Security System). Winklevoss IP LLC is the owner of and is licensing to the Sponsor such intellectual property. The Sponsor will arrange for the creation of the Trust, the registration of the Shares for their public offering in the United States and the listing of the Shares on the [EXCHANGE]. The Sponsor has agreed to assume the following administrative and marketing expenses incurred by the Trust: the Trustees monthly fee and expenses reimbursable under the Trust Agreement, Exchange listing fees, US Securities and Exchange Commission (SEC) registration fees, printing and mailing costs, audit fees and 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. The Trustee is [TRUSTEE]. In its capacity as trustee of the Trust, the Trustee is generally responsible for the day-to-day administration of the Trust. This includes (1) transferring the Trusts Bitcoins as needed to pay the remuneration due to the Sponsor (Sponsors Fee) in Bitcoins (such Bitcoins transfers are expected to occur approximately monthly in the ordinary course), (2) calculating the NAV of the Trust and the NAV per Share, (3) receiving and processing orders from Authorized Participants to create and redeem Baskets and coordinating the processing of such orders with The Depository Trust Company (DTC), (4) transferring the Trusts Bitcoins as needed to pay any extraordinary Trust expenses that are not assumed by the Sponsor and (5) selling the Trusts remaining Bitcoins at termination of the Trust and distributing the cash proceeds to the owners of beneficial interests in the Shares (Shareholders) of record.

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The custodian of the Trusts Bitcoins is [TRUSTEE]. In its capacity as custodian, the Trustee is responsible for the safekeeping of the Trusts Bitcoins deposited with it by Authorized Participants in connection with the creation of Baskets. The Trustee also facilitates the transfer of Bitcoins in and out of the Trust Custody Account through the Bitcoin custody accounts it will maintain for Authorized Participants, the Sponsor and the Trust. The Trustee will hold all of the Trusts Bitcoins in US vaulting premises on a segregated basis. The general role, responsibilities and regulation of the Trustee are further described in The Trustee and Custody of the Trusts Bitcoins. Detailed descriptions of certain specific rights and duties of the Trustee are set forth in Description of the Trust Agreement. Trust Overview The investment objective of the Trust is for the Shares to reflect the performance of the Blended Bitcoin Price of Bitcoins, less the expenses of the Trusts operations. The Shares are designed for investors seeking a cost-effective and convenient means to gain exposure to Bitcoins with minimal credit risk. The Bitcoin Network is a recent technological innovation, and the Bitcoins that are 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 Financial Crimes Enforcement Network of the US Department of the Treasury (FinCEN), major US regulators such as the US Commodity Futures Trading Commission (CFTC), Internal Revenue Service (IRS) and SEC, have yet to make official pronouncements or adopt rules providing guidance with respect to the classification and treatment of Bitcoins and other Digital Math-Based Assets for purposes of commodities, tax and securities laws. The Sponsor believes that, on balance, the important features of Bitcoins and other Digital Math-Based Assets are those that are characteristics of commodities and therefore has referred to and discussed these assets as such. It is not known whether US or foreign regulators will share this view, adopt a single, different view or espouse a variety of differing views; this regulatory uncertainty creates risks for the Trust and its Shares. See Risk FactorsRisk Factors Related to the Regulation of the Trust and its Shares. The Sponsor believes the Trust to be the first exchange-traded product that seeks to track the price of a Digital Math-Based Asset such as Bitcoins (a DMBA ETP). Some of the distinguishing features of the Trust and its Shares include directly holding Bitcoins using the Trusts proprietary Security System, storage of the Trusts Bitcoins in various premises of the Trustee located in the United States, the experience of the Sponsors management team, the use of [TRUSTEE] as custodian, third-party vault inspection and the use of a security consultant to advise on upgrades to the Trusts technology and custody procedures. See Business of the Trust. Investing in the Shares does not insulate the investor from certain risks, including price volatility. See Risk Factors.

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Principal Offices The Trusts office is located at [ ],[ ],[ ],[ ][ ]. The Sponsors office is located at 30 West 24 th Street, 4 th Floor, New York, NY 10010, and its telephone number is (646) 751-4444. The Trustee has a trust office at [ ],[ ],[ ],[ ][ ] and various vaulting premises in the United States.

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THE OFFERING

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 [_] Baskets (Seed Baskets) issued to [_] (in its capacity as the purchaser of the Seed Baskets, the Initial Purchaser) in connection with the formation of the Trust, and the Shares (as described on the front page of this prospectus) will consist of Bitcoin deposits. Pursuant to the Trust Agreement, during the life of the Trust, such proceeds will only be (1) held by the Trust, (2) transferred to Authorized Participants in connection with the redemption of Baskets; (3) transferred to pay the Sponsors Fee; or (4) transferred as needed to pay the Trusts expenses not assumed by the Sponsor. Exchange symbol [TICKER] CUSIP [CUSIP] Creation and redemption The Trust expects to create and redeem the Shares from time to time, but only in one or more whole Baskets (a Basket equals a block of [50,000] Shares). The creation and redemption of Baskets require the delivery to the Trust, or the distribution by the Trust, of the number of Bitcoins represented by the Baskets being created or redeemed, the amount of which will be based on the combined NAV of the number of Shares included in the Baskets being created or redeemed. The initial number of Bitcoins required for deposit with the Trust to create Shares is [10,000] per Basket. The number of Bitcoins 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 Bitcoins to pay the Sponsors Fee and the transfer of the Trusts Bitcoins to pay any Trust expenses not assumed by the Sponsor. See Business of the TrustTrust Expenses. Baskets may be created or redeemed only by Authorized Participants, who will pay a transaction fee (Transaction Fee), initially $[_] for each order to create or redeem Baskets and may sell the Shares included in the Baskets they create to other investors. The Trust will not issue fractional Baskets. See Creation and Redemption of Shares for more details. Net Asset Value The NAV of the Trust is the aggregate value of the Trusts assets less its liabilities (which include estimated accrued but unpaid fees and expenses). In determining the NAV of the Trust, the Trustee will value the price of the Bitcoins in the Trust Custody Account as determined by the relevant Blended Bitcoin Price. See Overview of the Bitcoin Industry and Market for a description of the operation of the Bitcoin exchange market (Bitcoin Exchange Market) from which prices are used to determine the Blended Bitcoin Price. The Trustee will determine the NAV of the Trust on each day the [EXCHANGE] is open for regular trading, (Evaluation Day) as promptly as practicable after 4:00 p.m. New York time. If no Blended Bitcoin Price is available on a particular Evaluation Day or has not been determined by 4:00 p.m. New York time on a particular Evaluation Day, the

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next most recent Blended Bitcoin Price will be used in the determination of the NAV of the Trust, unless the Sponsor determines that such price is inappropriate to use as basis for such determination. The Trustee will also determine on each Evaluation Day the NAV per Share, which equals the NAV of the Trust divided by the number of outstanding Shares. 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. Sponsors Fee The Sponsors Fee will accrue daily and will be payable in kind (in Bitcoins) monthly in arrears. To pay the Sponsors Fee, the Trust will transfer Bitcoins from the Trust Custody Account to an account maintained by the Trustee 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. Presently, the Sponsor does not intend to waive any of its fee. The Trustee will from time to time deliver to the Sponsor Custody Account Bitcoins in such quantity as may be necessary to permit payment of the Sponsors Fee. The Trustee may from time to time transfer from the Trust Custody Account and deliver to a segregated account of the Trustee (Trust Expense Account) Bitcoins for sale in such quantity as may be necessary to permit payment of Trust expenses not assumed by the Sponsor. Accordingly, the number of Bitcoins to be transferred and sold will vary from time to time depending on the level of the Trusts expenses and the Blended Bitcoin Price. See Business of the TrustTrust Expenses. Each delivery or transfer of Bitcoins by the Trust to pay the Sponsors Fee or other expenses will be a taxable event to Shareholders. See United States Federal Income Tax ConsequencesTaxation of US Shareholders. Termination events The Trustee will terminate and liquidate the Trust if one of the following events occurs:  the Trustee is notified that the Shares are delisted from the [EXCHANGE] and are not approved for listing on another national securities exchange within five business days of their delisting;  Shareholders acting in respect of at least 75 percent of the outstanding Shares notify the Trustee that they elect to terminate the Trust;

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 60 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 and the Trustee has actual knowledge of that determination;  the CFTC determines that the Trust is a commodity pool under the Commodity Exchange Act of 1936, as amended (CEA), and the Trustee receives notice from the Sponsor that, because of that determination, termination of the Trust is advisable;  the Trust is determined to be a money transmitter under the regulations promulgated by FinCEN under the authority of the US Bank Secrecy Act and is required to comply with certain FinCEN regulations thereunder, and the Trust receives notice from the Sponsor that, because of that determination, termination of the Trust is advisable;  the Trust fails to qualify for treatment, or ceases to be treated, as a grantor trust for US federal income tax purposes, and the Trustee receives notice from the Sponsor that the Sponsor determines that, because of that tax treatment or change in tax treatment, termination of the Trust is advisable;  a United States regulator requires the Trust to shut down or forces the Trust to liquidate its Bitcoins;  the aggregate market capitalization of the Trust, based on the closing price of the Shares, was less than $[ ] million (as adjusted for inflation by reference to the US Consumer Price Index) at any time after the first anniversary of the Trusts formation and the Trustee receives, within six months after the last trading date on which the aggregate market capitalization of the Trust was less than $[ ] million, notice from the Sponsor of its decision to terminate the Trust;  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; or  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.

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Upon the termination of the Trust, the Trustee will sell the Trusts Bitcoins and, after paying or making provision for the Trusts liabilities, distribute the cash proceeds to Shareholders surrendering 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 (1) 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, (2) be a direct participant in DTC, (3) have entered into an agreement with the Trustee and the Sponsor (Authorized Participant Agreement) and (4) have established a Bitcoin custody account (Authorized Participant Custody Account) with the Trustee. The Authorized Participant Agreement provides the procedures for the creation and redemption of Baskets and for the delivery of Bitcoins required for such creations or redemptions. A list of the current Authorized Participants can be obtained from the Trustee 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 Trustee will issue to DTC. The Shares will be available only in book-entry form. Shareholders may hold their Shares through DTC, if they are participants in DTC, or indirectly through entities that are participants in DTC.

Summary of Financial Condition

As of the close of business on [ ], 2013, the date of the formation of the Trust, the NAV of the Trust, which represents the value of the Bitcoins deposited into and held by the Trust in exchange for the Seed Baskets, was $[ ] and the NAV per Share was $[ ]. See Statement of Financial Condition elsewhere in this prospectus.

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RISK FACTORS

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.

Risk Factors Related to the Bitcoin Network and Bitcoins

The loss or destruction of a private key required to access a Bitcoin may be irreversible. The Trusts loss of access to its private keys or its experience of a data loss relating to the Trusts Bitcoins could adversely affect an investment in the Shares.

Bitcoins are controllable only by the possessor of both the unique public and private keys relating to the local or online digital wallet in which the Bitcoins are held, which wallets public key or address is reflected in the Bitcoin Networks public Blockchain. The Trust publishes the public key relating to digital wallets in use by the Trust when it verifies the receipt of Bitcoin transfers and disseminates such information into the Bitcoin Network, but is required to safeguard the private keys relating to such digital wallets using the Security System. To the extent such private keys are lost, destroyed or otherwise compromised, the Trust will be unable to access the related Bitcoins and such private keys will not be capable of being restored by the Bitcoin Network. Any loss of private keys relating to digital wallets used to store the Trusts Bitcoins could adversely affect an investment in the Shares.

The further development and acceptance of the Bitcoin Network and other Digital Math-Based 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.

Digital Math-Based Assets such as Bitcoins may be used, among other things, to buy and sell goods and services are a new and rapidly evolving industry of which the Bitcoin Network is a prominent, but not unique, part. The growth of the Digital Math-Based Assets 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 Math-Based Assets industry, as well as the Bitcoin Network, include:

 Continued worldwide growth in the adoption and use of Bitcoins and other Digital Math-Based Assets;

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

 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 Math-Based 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 creation of the Trust and the expansion of its Bitcoin holdings on the Digital Math-Based Assets industry and the Bitcoin Network. A decline in the popularity or acceptance of the Bitcoin Network would harm the price of the Shares.

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

As relatively new products and technologies, Bitcoins and the Bitcoin Network have not been widely adopted as a means of payment for goods and services by major retail and commercial outlets. Conversely, a significant portion of Bitcoin demand is generated by speculators and investors seeking to profit from the shortor long-term holding of Bitcoins. The relative lack of acceptance of Bitcoins in the retail and commercial marketplace limits the ability of end-users to pay for goods and services with Bitcoins. A lack of expansion by Bitcoins into retail and commercial markets, or a contraction of such use, may result in increased volatility or a reduction in the Blended Bitcoin Price, either of which could adversely impact an investment in the Shares.

The administrators of the Bitcoin Networks source code could propose amendments to the Bitcoin Networks protocols and software that, if accepted and authorized by the Bitcoin Networks community, could adversely affect an investment in the Shares.

The Bitcoin Network is based on a cryptographic, algorithmic protocol that governs the end-user-to-end-user interactions between computers connected to the Bitcoin Network. The code that sets forth the protocol is managed by a development team that was appointed by the Bitcoin Networks purported creator, Satoshi Nakamoto. The development team can propose amendments 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 Bitcoins, including the irreversibility of transactions and limitations on the mining of new Bitcoins. 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. If less than a significant majority of the users and miners on the Bitcoin Network install such software upgrade(s), the Bitcoin Network could fork. 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 fork in the Blockchain .

If a malicious actor or botnet obtains control in excess of 50 percent of the processing power active on the Bitcoin Network, such actor or botnet could manipulate the source code of the Bitcoin Network or the Blockchain in a manner that adversely affects an investment in the Shares or the ability of the Trust to operate.

To the extent that a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the processing power on the Bitcoin Network, it could alter the source code and Blockchain on which the Bitcoin Network and all Bitcoin transactions rely. To the extent that such malicious actor or botnet does not yield its majority control of the processing power on the Bitcoin Network, reversing any changes made to the source code or Blockchain may not be possible. Such changes could adversely affect an investment in the Shares or the ability of the Trust to operate.

As the number of Bitcoins awarded for solving a block in the Blockchain decreases, the incentive for miners to continue to contribute processing power to the Bitcoin Network will transition from a set reward to transaction fees. The requirement from miners of higher transaction fees in exchange for recording transactions in the Blockchain may decrease demand for Bitcoins and prevent the expansion of the Bitcoin Network to retail merchants and commercial businesses, resulting in a reduction in the Blended Bitcoin Price.

If transaction fees paid for the recording of transactions in the Blockchain become too high, the marketplace may be reluctant to accept Bitcoins as a means of payment and existing users may be motivated to switch from Bitcoins to another Digital Math-Based Asset or back to fiat currency. Decreased use and demand for Bitcoins may adversely affect their value and result in a reduction in the Blended Bitcoin Price.

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

If transaction fees are not sufficiently high, miners may not have an adequate incentive to continue mining and may cease their mining operations. Miners ceasing operations would reduce the collective processing power on the Bitcoin Network, which would adversely affect the confirmation process for transactions and make the Bitcoin Network more vulnerable to a malicious actor or botnet obtaining control in excess of 50 percent of the processing power on the Bitcoin Network. Any reduction in confidence in the confirmation process or processing power of the Bitcoin Network may 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 fork in the Blockchain, resulting in the operation of two separate networks until such time as the forked Blockchains are merged. 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 leaders in the Bitcoin Network community including developers, there is no official developer or group of developers that formally controls 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 software downloads and upgrades. However, miners and users must consent to those software modifications by downloading the altered software or upgrade implementing the changes; otherwise, the changes do not become a part of the Bitcoin Network. Since the Bitcoin Networks inception, changes 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 population of participants in the Bitcoin Network. In such a case, a 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 fork in the Blockchain typically would be addressed by community-led efforts to merge the forked Blockchains, and several prior forks have been so merged. This kind of split in the Bitcoin Network could materially and adversely affect the Blended Bitcoin Price (and thus the value of the Shares) and, in the worst case scenario, harm the sustainability of the Bitcoin economy.

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

Third parties may assert intellectual property claims relating to the operation of Digital Math-Based Assets and their source code relating to the holding and transfer of such assets. 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 Bitcoins may adversely

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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 Bitcoins, which could force the Trustee to terminate the Trust and liquidate the Trusts Bitcoins (if such liquidation of the Trusts Bitcoins is possible). As a result, an intellectual property claim against the Trust could adversely affect an investment in the Shares.

Risk Factors Related to the Bitcoin Exchange Market and the Bitcoin Blended Price

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

The Shares are designed to mirror as closely as possible the performance of the Blended Bitcoin Price, and the value of the Shares relates directly to the value of the Bitcoins held by the Trust, less the Trusts liabilities (including estimated accrued but unpaid fees and expenses). The price of Bitcoins has fluctuated widely over the past three years. Several factors may affect the Blended Bitcoin Price, including, but not limited to:

 Global Bitcoin supply;

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

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

 Interest rates;

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

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

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

 Regulatory measures, if any, that restrict the use of Bitcoins as a form of payment;

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

 Expectations among Bitcoin economy participants that the value of Bitcoins will soon change.

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

The value of Bitcoins as represented by the Blended Bitcoin Price may be subject to momentum pricing whereby the current Blended Bitcoin Price may account for speculation regarding future appreciation in value. Momentum pricing of Bitcoins may subject the Blended Bitcoin Price 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 Blended Bitcoin Price is determined using data from various Bitcoin Exchanges that are selected by the Sponsor. The Sponsor believes that momentum pricing of Bitcoins has resulted, and may continue to result, in

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speculation regarding future appreciation in the value of Bitcoins, inflating and making more volatile the Blended Bitcoin Price. As a result, Bitcoins may be more likely to fluctuate in value due to changing investor confidence in future appreciation in the Blended Bitcoin Price, which could adversely affect an investment in the Shares.

The Blended Bitcoin Price is based on the daily average of the high and low trading prices on various Bitcoin Exchanges in the Bitcoin Exchange Market chosen by the Sponsor. Pricing on any Bitcoin Exchange on the Bitcoin Exchange Market can be volatile and can adversely affect an investment in the Shares.

The Blended Bitcoin Price has a limited history and is based on a weighted average daily price of Bitcoins, using the average of the high and low trading prices on various Bitcoin Exchanges chosen by the Sponsor. The Blended Bitcoin Price will be calculated as of 3:00 p.m. New York time on each Evaluation Day using data collected from the selected Bitcoin Exchanges for the prior [ ] hours.

The price of Bitcoins on public Bitcoin Exchanges has a limited, three-year history. During such history, Bitcoin prices on the Bitcoin Exchange Market as a whole, and on Bitcoin Exchanges individually, have been volatile 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), limiting the liquidity of Bitcoins on the Bitcoin Exchange Market and resulting in volatile prices and a reduction in confidence in the Bitcoin Network and the Bitcoin Exchange Market.

The Blended Bitcoin Price is designed to have limited exposure to Bitcoin Exchange interruption by [ ] using data from various Bitcoin Exchanges selected by the Sponsor. The methodology for calculating the Blended Bitcoin Price calls for the periodic updating of the constituent Bitcoin Exchanges used for the Blended Bitcoin Price and for the substitution of a constituent Bitcoin Exchange to the extent that one of the [ ] constituent Bitcoin Exchanges does not report transactions for 24 consecutive hours. Despite efforts to ensure accurate, weighted pricing, the Blended Bitcoin Price, and the price of Bitcoins generally, remains subject to volatility experienced by the Bitcoin Exchanges. Such volatility can adversely affect an investment in the Shares.

The Bitcoin Exchanges on which Bitcoins trade are relatively new and largely unregulated and may therefore be more exposed to fraud and failure than established, regulated exchanges for other products. To the extent that the Bitcoin Exchanges representing a substantial portion of the volume in Bitcoin trading are involved in fraud or experience security failures or other operational issues, such Bitcoin Exchanges failures may result in a reduction in the Blended Bitcoin Price and can adversely affect an investment in the Shares.

The Bitcoin Exchanges on which the Bitcoins trade are new and largely unregulated. The Blended Bitcoin Price on which the NAV of the Shares is based utilizes data from Bitcoin Exchanges selected by the Sponsor to determine the weighted average price for Bitcoins. For a further discussion of the Bitcoin Exchange Market and the selection of Bitcoin Exchanges for inclusion in the Blended Bitcoin Price, see Overview of the Bitcoin Industry and MarketBitcoin Value and Uses of Bitcoins.

Over the past three years, many Bitcoin Exchanges have been closed due to fraud, failure or security breaches. In many of these instances, the customers of such Bitcoin Exchanges were not compensated or made whole for the partial or complete losses of their account balances in such Bitcoin Exchanges. While smaller Bitcoin Exchanges are less likely to have the infrastructure and capitalization that make larger Bitcoin Exchanges more stable, larger Bitcoin Exchanges are more likely to be appealing targets for hackers and malware (i.e., software used or programmed by attackers to disrupt computer operation, gather sensitive information or gain access to private computer systems).

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A lack of stability in the Bitcoin Exchange Market and the closure or temporary shutdown of Bitcoin Exchanges due to fraud, business failure, or hackers or malware may reduce confidence in the Bitcoin Network and result in greater volatility in the Blended Bitcoin Price. Furthermore, the closure or temporary shutdown of a constituent Bitcoin Exchange used in calculating the Blended Bitcoin Price may result in a loss of confidence in the Trusts ability to determine NAV on a daily basis. These potential consequences of a Bitcoin Exchanges failure could adversely affect an investment in the Shares.

Since there is no limit on the number of Bitcoins that the Trust may acquire, the Trust itself, as it grows, may have an impact on the supply and demand of Bitcoins that ultimately may affect the price of the Shares in a manner unrelated to other factors affecting the global market for Bitcoins.

The Trust Agreement places no limit on the number of Bitcoins the Trust may hold. Moreover, the Trust may issue an unlimited number of Shares, subject to registration requirements, and therefore acquire an unlimited number of Bitcoins. The global market for Bitcoins is characterized by supply and demand constraints that generally are not present in the markets for commodities or other assets such as gold and silver. The Bitcoin Networks mathematical protocols under which Bitcoins are created or mined permit the creation of a limited, predetermined number of Bitcoins not to exceed 21 million. Furthermore, the rate of creation or issuance of Bitcoins cannot be increased ahead of the protocols schedule. As of [ ], 2013, [11, , ] Bitcoins had been created.

If the number of Bitcoins acquired by the Trust is large enough relative to global Bitcoin supply and demand, further in-kind creations and redemptions of Shares could have an impact on the supply and demand of Bitcoins in a manner unrelated to other factors affecting the global market for Bitcoins. Such an impact could affect the Blended Bitcoin Price, which would directly affect the price at which Shares are traded on the [EXCHANGE] or the price of future Baskets created or redeemed by the Trust.

As of [ ], 2013, the Trust held approximately [ ] Bitcoins that it acquired in the sale of the Initial Baskets on [ ], 2013, representing approximately 0.[ ] percent of the [ ], 2013 world Bitcoin supply. The Trust and the Sponsor cannot provide any assurance that increased Bitcoin holdings by the Trust in the future will have no long-term impact on the Blended Bitcoin Price, thereby affecting Share trading prices.

The Shares may trade at a discount or premium in the trading price relative to the NAV per Share as a result of non-concurrent trading hours between the [EXCHANGE] and the Bitcoin Exchange Market.

The value of a Share may be influenced by non-concurrent trading hours between the [EXCHANGE] and various Bitcoin Exchanges, including those that represent components of the Blended Bitcoin Price. While the [EXCHANGE] is open for trading in the Shares for a limited period each day, the Bitcoin Exchange Market is a 24-hour marketplace; however, trading volume and liquidity on the Bitcoin Exchange Market is not consistent throughout the day and Bitcoin Exchanges, including the larger-volume markets, have been known to shut down temporarily or permanently due to security concerns, directed denial of service attacks and DDoS Attacks and other reasons. As a result, during periods when the [EXCHANGE] is open but large Bitcoin Exchanges (or a substantial number of smaller Bitcoin Exchanges) are either lightly traded or are closed, trading spreads and the resulting premium or discount on the Shares may widen and, therefore, increase the difference between the price of the Shares and the NAV per Share. Premiums or discounts may have an adverse effect on an investment in the Shares if a Shareholder sells or acquires its Shares during a period of discount or premium, respectively.

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A possible short squeeze due to a sudden increase in demand for the Shares that largely exceeds supply may lead to price volatility in the Shares.

Investors may purchase Shares to hedge existing Bitcoin or other Digital Math-Based Assets, commodity or currency exposure or to speculate on the price of Bitcoins. Speculation on the price of Bitcoins may involve long and short exposures. To the extent that aggregate short exposure exceeds the number of Shares available for purchase (for example, in the event that large redemption requests by Authorized Participants dramatically affect Share liquidity), investors with short exposure may have to pay a premium to repurchase Shares for delivery to Share lenders. Those repurchases may, in turn, dramatically increase the price of the Shares until additional Shares are created through the creation process. This is often referred to as a short squeeze. A short squeeze could lead to volatile price movements in the Shares that are not directly correlated to the price of Bitcoins.

Purchasing activity in the Bitcoin Exchange Market associated with Basket creations or selling activity following Basket redemptions may affect the Blended Bitcoin Price and Share trading prices. These price changes may adversely affect an investment in the Shares.

Purchasing activity associated with acquiring Bitcoins required for deposit with the Trust in connection with the creation of Baskets may increase the market price of Bitcoins on the Bitcoin Exchange Market, which will result in higher prices for the Shares. Increases in the market price of Bitcoins may also occur as a result of the purchasing activity of other market participants. Other market participants may attempt to benefit from an increase in the market price of Bitcoins that may result from increased purchasing activity of Bitcoins connected with the issuance of Baskets. Consequently, the market price of Bitcoins may decline immediately after Baskets are created. If the Blended Bitcoin Price declines, the trading price of the Shares will also decline.

Selling activity associated with sales of Bitcoins withdrawn from the Trust in connection with the redemption of Baskets may decrease the market price of Bitcoins on the Bitcoin Exchange Market, which will result in lower prices for the Shares. Decreases in the market price of Bitcoins may also occur as a result of the selling activity of other market participants. If the Blended Bitcoin Price declines, the trading price of the Shares will also decline.

An investment in the Shares may be adversely affected by competition from other methods of investing in Bitcoins.

The Trust will compete with direct investments in Bitcoins and other potential financial vehicles, including securities backed by or linked to Bitcoins and DMBA ETPs similar to the Trust. Market and financial conditions, and other conditions beyond the Sponsors control, may make it more attractive to invest in other financial vehicles or to invest in Bitcoins directly, which could limit the market for the Shares and reduce the liquidity of the Shares.

The Blended Bitcoin Price may be affected by the sale of DMBA ETPs tracking the price of Bitcoins.

To the extent DMBA ETPs tracking the price of Bitcoins are formed and represent a significant proportion of demand for Bitcoins, large redemptions of the securities of these DMBA ETPs could negatively affect the Blended Bitcoin Price and the price and NAV of the Shares.

Political or economic crises may motivate large-scale sales of Bitcoins, which could result in a reduction in the Blended Bitcoin Price and adversely affect an investment in the Shares.

As an alternative to fiat currencies that are backed by central governments, Digital Math-Based Assets such as Bitcoins, which are relatively new, are subject to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling goods and services, and it is unclear how such supply and demand will be impacted by geopolitical events. Nevertheless, political or economic crises may motivate large-scale acquisitions or sales of Bitcoins either globally or locally. Large-scale sales of Bitcoins would result in a reduction in the Blended Bitcoin Price and adversely affect an investment in the Shares.

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Risk Factors Related To The Trust And Its Shares

As the Sponsor and its management have no history of operating an investment vehicle like the Trust, their experience may be inadequate or unsuitable to manage the Trust.

The Sponsor was formed to be the Sponsor of the Trust and has no history of past performance in managing investment vehicles like the Trust. The past performances of the Sponsors management in other positions are no indication of their ability to manage an investment vehicle such as the Trust. If the experience of the Sponsor and its management is inadequate or unsuitable to manage an investment vehicle such as the Trust, the operations of the Trust may be adversely affected.

The value of the Shares could decrease if unanticipated operational or trading problems arise.

The mechanisms and procedures governing the creation, redemption and offering of the Shares and storage of the Bitcoins have been developed specifically for this product. There may be unanticipated problems or issues with respect to the mechanics of the Trusts operations and the trading of the Shares that could have an adverse effect on an investment in the Shares. In addition, although the Trust is not actively managed by traditional methods, to the extent that unanticipated operational or trading problems or issues arise, the Sponsors past experience and qualifications may not be suitable for solving these problems or issues.

The Shares may trade at a price which is at, above or below the NAV per Share and any discount or premium in the trading price relative to the NAV per Share may widen as a result of non-concurrent trading hours.

The Shares may trade on the [EXCHANGE] at, above or below the NAV per Share. The NAV per Share will fluctuate with changes in the market value of the Trusts assets. The trading price of the Shares will fluctuate in accordance with changes in the NAV per Share as well as market supply and demand. The price difference may be due, in large part, to the fact that supply and demand forces at work in the secondary trading market for Shares are closely related, but not identical, to the same forces influencing the Blended Bitcoin Price. Consequently, an Authorized Participant may be able to create or redeem a Basket of Shares at a discount or a premium to the public trading price per Share.

Authorized Participants, or their clients or customers, may have an opportunity to realize a riskless profit if they can create a Basket at a discount to the public trading price of the Shares or can redeem a Basket at a premium over the public trading price of the Shares. The Sponsor expects that the exploitation of such arbitrage opportunities by Authorized Participants and their clients and customers will tend to cause the public trading price to track NAV per Share closely over time. Such arbitrage opportunities will not be available to Shareholders who are not Authorized Participants.

If the processes of creation and redemption of Baskets encounter any unanticipated difficulties, the opportunities for arbitrage transactions intended to keep the price of the Shares closely linked to the Blended Bitcoin Price may not exist and, as a result, the price of the Shares may fall.

If the processes of creation and redemption of the Shares (which depend on timely transfers of Bitcoins to and by the Trustee) encounter any unanticipated difficulties, including, but not limited to, the Trusts inability in the future to obtain regulatory approvals for the offer and sale of additional Shares after the present offering is completed, potential market participants who would otherwise be willing to purchase or redeem Baskets to take advantage of any arbitrage opportunity arising from discrepancies

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between the price of the Shares and the price of the underlying Bitcoins may not take the risk that, as a result of those difficulties, they may not be able to realize the profit they expect. If this is the case, the liquidity of Shares may decline and the price of the Shares may fluctuate independently of the Blended Bitcoin Price and may fall.

The postponement, suspension or rejection of creation or redemption orders, as permitted in certain circumstances under the Trust Agreement, may adversely affect an investment in the Shares.

Under the Trust Agreement, the Trustee or Sponsor may postpone, suspend or reject creation or redemption orders, as applicable, for a variety of permitted reasons under certain circumstances. To the extent such orders are postponed, suspended or rejected, the arbitrage mechanism resulting from the process through which Authorized Participants create and redeem Shares directly with the Trust may fail to closely link the price of the Shares to the value of the underlying Bitcoins, as measured using Blended Bitcoin Price. If this is the case, the liquidity of the Shares may decline and the price of the Shares may fluctuate independently of the Blended Bitcoin Price and may fall.

The Trust could experience unforeseen difficulties in building and operating key elements of its technical infrastructure.

The Security System has been designed specifically to provide security for the Trusts assets, and may be expanded, updated and altered from time to time. Any effort to expand, update or alter the Security System is likely to be complex, and unanticipated delays in the completion of these projects may lead to project costs, operational inefficiencies or vulnerabilities to security breaches. In addition, there may be issues related to this infrastructure and any expansion or update thereof that are not identified during the testing phases of design and implementation, and that may only become evident after the Trust has utilized the infrastructure. This could further expose the Trust to operational inefficiencies or vulnerabilities. Any issues relating to the performance of the Security System may have an adverse impact on an investment in the Shares.

The Trusts ability to adopt technology in response to changing security needs or trends poses a challenge to the safekeeping of the Trusts Bitcoins.

The history of the Bitcoin Exchange Market has shown that Bitcoin Exchanges and large holders of Bitcoins must adapt to technological change in order to secure and safeguard client accounts. While the Sponsor believes it has developed a proprietary Security System reasonably designed to safeguard the Trusts Bitcoins from theft, loss, destruction or other issues relating to hackers and technological attack, such assessment is based upon known technology and threats. As technological change occurs, the security threats to the Trusts Bitcoins will likely adapt and previously unknown threats may emerge. Furthermore, the Sponsor believes that the Trust may become a more appealing target of security threats as the size of the Trusts assets grows. To the extent that the Trust is unable to identify and mitigate or stop new security threats, the Trusts Bitcoins may be subject to theft, loss, destruction or other attack, which could have a negative impact on the performance of the Shares or result in loss of the Trusts assets.

The Trusts internal systems rely on a Security System that is highly technical, and if such system contains undetected errors, the value of the Shares could be adversely effected.

The Trusts internal systems rely on a Security System that is technical and complex. In addition, the Trustees storage and safekeeping responsibilities depend on administration by the Trustee and the ability of the Security System to store, accept and distribute data relating to Bitcoins. The Security System may

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now or in the future contain undetected errors, software flaws (i.e., bugs), or vulnerabilities. Some errors in the Security System may only be discovered after a failure in the systems safekeeping and storage of the Trusts Bitcoins, which could result in the theft, loss or damage of the Trusts assets. Any such theft, loss or damage of the Trusts Bitcoins would have a negative impact on the value of the Shares for which the Trust may have no recourse or means of recovery.

Security threats to the Security System could result in the halting of Trust operations, the suspension of redemptions, a loss of Trust assets, or damage to the reputation and brand of the Trust, each of which could result in a reduction in the price of the Shares.

Security breaches, computer malware and computer hacking attacks have been a prevalent concern in the Bitcoin Exchange Market since the launch of the Bitcoin Network. Any security breach caused by hacking, which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment, and the inadvertent transmission of computer viruses, could harm the Trusts business operations or result in loss of the Trusts assets. Any breach of the Trusts infrastructure could result in damage to the Trusts reputation and reduce demand for the Shares, resulting in a reduction in the price of the Shares. Furthermore, the Sponsor believes that, as the Trusts assets grow, it may become a more appealing target for security threats such as hackers and malware.

While the Sponsor believes it has developed a proprietary Security System reasonably designed to safeguard, to the extent possible, the Trusts Bitcoins from theft, loss, destruction or other issues relating to hackers and technological attack, the Security System is not impenetrable and may not be free from defect, and any loss due to a security breach or software defect will be borne by the Trust, absent gross negligence, willful misconduct or fraud on the part of the Sponsor, the Trustee or their agents.

The Security System and operational infrastructure may be breached due to the actions of outside parties, Trustee or Sponsor employee error or malfeasance, or otherwise, and, as a result, an unauthorized party may obtain access to the Trusts system, data or Bitcoins. Additionally, outside parties may attempt to fraudulently induce employees of the Trustee or the Sponsor to disclose sensitive information in order to gain access to the Trusts infrastructure. The Sponsor will periodically examine and propose modifications to the Security System to address the use of new devices and technologies to safeguard the Trusts systems and Bitcoins. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, the Sponsor may be unable to anticipate these techniques or implement adequate preventative measures. If an actual or perceived breach of the Security System occurs, the market perception of the effectiveness of the Security System could be harmed, which could result in a reduction in the price of the Shares.

In the event of a security breach of the Security System, the Trust may cease operations, suspend redemptions or suffer a reduction in assets, the occurrence of each of which could result in a reduction in the price of the Shares.

A loss of confidence in the Security System and the Trusts security and technology policies, or a breach of the Security System, may adversely affect the Trust and the value of an investment in the Shares.

The Trust, the Trustee, the Sponsor and their agents take measures to protect the Trust and its Bitcoins from unauthorized access, damage or theft; however, it is possible that the Security System may not prevent the improper access to, or damage or theft of the Trusts Bitcoins. A security breach could harm the Trusts reputation or result in the loss of some or all of the Trusts Bitcoins, which represent the Trusts only asset. A resulting perception that the Security System does not adequately protect the Trusts Bitcoins could result in a loss of current or potential Shareholders, reducing demand for the Shares and causing the Shares to trade at a discount to NAV.

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Bitcoin transactions are irrevocable and stolen or incorrectly transferred Bitcoins may be irretrievable. As a result, any incorrectly executed Bitcoin transactions could adversely affect an investment in the Shares.

Bitcoin transactions are not, from an administrative perspective, reversible without control or consent of a majority of the processing power on the Bitcoin Network. Once a transaction has been verified and recorded in a Block that is added to the Blockchain, an incorrect transfer of Bitcoins or a theft of Bitcoins generally will not be reversible and the Trust may not be capable of seeking compensation for any such transfer or theft. Although the Trusts transfers of Bitcoins will regularly be made to or from the Authorized Participant Custody Accounts, and to the Sponsor Custody Account and the Trust Expense Account (each of which are custodied and administered by the Trustee), it is possible that, through computer or human error, or through theft or criminal action, the Trusts Bitcoins could be transferred in incorrect amounts or to unauthorized third parties. To the extent that the Trust is unable to seek a corrective transaction with such third party or is incapable of identifying the third party which has received the Trusts Bitcoins through error or theft, the Trust will be unable to revert or otherwise recover incorrectly transferred Trust Bitcoins. To the extent that the Trust is unable to seek redress for such error or theft, such loss could adversely affect an investment in the Shares.

The Trusts Bitcoins may be subject to loss, damage, theft or restriction on access.

There is a risk that part or all of the Trusts Bitcoins could be lost, stolen or destroyed. The Sponsor believes that the Trusts Bitcoins held in the Trust Custody Account will be an appealing target to hackers or malware distributors seeking to destroy, damage or steal the Trusts Bitcoins. Although the Security System has been designed to minimize the risk of loss, damage and theft, neither the Trustee nor the Sponsor can guarantee that the Security System will prevent such loss, damage or theft, whether caused intentionally, accidentally or by act of God. Access to the Trusts Bitcoins could also be restricted by natural events (such as an earthquake) or human actions (such as a terrorist attack). Any of these events may adversely affect the operations of the Trust and, consequently, an investment in the Shares.

The Shareholders limited rights of legal recourse against the Trust, the Trustee and the Sponsor and the Trusts lack of insurance protection expose the Trust and its Shareholders to the risk of loss of the Trusts Bitcoins for which no person is liable.

The Trust will not insure its Bitcoins. The Trustee will maintain insurance with regard to its custodial business on such terms and conditions as it considers appropriate in connection with its custodial obligations and will be responsible for all costs, fees and expenses arising from the insurance policy or policies. The Trust will not be a beneficiary of any such insurance and does not have the ability to dictate the existence, nature or amount of coverage. Therefore, Shareholders cannot be assured that the Trustee will maintain adequate insurance or any insurance with respect to the Bitcoins held by the Trustee on behalf of the Trust. Further, Shareholders recourse against the Trust, the Trustee and the Sponsor under New York law governing their custody operations is limited. Consequently, a loss may be suffered with respect to the Trusts Bitcoins which is not covered by insurance and for which no person is liable in damages.

Bitcoins held by the Trust are not subject to FDIC or SIPC protections.

The Trust is not a banking institution or otherwise a member of the Federal Deposit Insurance Corporation (FDIC) or Securities Investor Protection Corporation (SIPC) and, therefore, deposits held with or assets held by the Trust are not subject to the protections enjoyed by depositors with FDIC or SIPC member institutions. The undivided interest in the Trusts Bitcoins represented by Shares in the Trust are not insured.

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The Trustees limited liability under the Trust Agreement may impair the ability of the Trust to recover losses relating to its Bitcoins and any recovery may be limited, even in the event of fraud, to the market value of the Bitcoins at the time the fraud is discovered.

The liability of the Trustee is limited under the Trust Agreement, under which the Trustee is only liable for losses that are the direct result of its own gross negligence, fraud or willful default in the performance of its administrative custodial duties. Any such liability is further limited to the market value of the Bitcoins held in the Trust Custody Account at the time such gross negligence, fraud or willful default is discovered by the Trustee.

Under each agreement between the Trustee and an Authorized Participant to establish an Authorized Participant Custody Account (Authorized Participant Custody Account Agreement), the Trustee is not contractually or otherwise liable for any losses suffered by any Authorized Participant or Shareholder that are not the direct result of its own gross negligence, fraud or willful default in the performance of its duties under such agreement, and in no event will its liability exceed the market value of the Bitcoins in the Authorized Participant Custody Account at the time such gross negligence, fraud or willful default is discovered by the Trustee.

In addition, the Trustee will not be liable for any delay in performance or any non-performance of any of its custodial obligations under the Trust Agreement or any Authorized Participant Custody Account Agreement by reason of any cause beyond its reasonable control, including acts of God, war or terrorism. The Trustee will also not be liable for any system failure or third-party penetration of the Security System. As a result, the recourse of the Trust or the investor, under New York law, is limited.

The Trust may not have adequate sources of recovery if its Bitcoins are lost, stolen or destroyed.

If the Trusts Bitcoins are lost, stolen or destroyed under circumstances rendering a party liable to the Trust, the responsible party may not have the financial resources sufficient to satisfy the Trusts claim. For example, as to a particular event of loss, the only source of recovery for the Trust might be limited to the Trustee or, to the extent identifiable, other responsible third parties (e.g., a thief or terrorist), any of which may not have the financial resources (including liability insurance coverage) to satisfy a valid claim of the Trust.

The liquidity of the Shares may also be affected by the withdrawal from participation of one or more Authorized Participants.

In the event that one or more Authorized Participants having substantial interests in Shares or otherwise responsible for a significant portion of the Shares daily trading volume on the [EXCHANGE] withdraw from participation, the liquidity of the Shares will likely decrease, which could adversely affect the market price of the Shares and adversely affect an investment in the Shares.

As a new fund, there is no guarantee that an active trading market for the Shares will develop. To the extent that no active trading market develops on the [EXCHANGE] and the assets of the Trust do not reach a viable size, the liquidity of the Shares may be limited or the Trust may be terminated at the option of the Sponsor.

As a new fund, there can be no assurance that the Trust will grow to or maintain an economically viable size, in which case the Sponsor may elect to terminate the Trust, which could result in the

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liquidation of the Trusts Bitcoins at a time that is disadvantageous to an investor in the Shares. Additionally, there is no guarantee that an active trading market will develop and that the Shares will be liquid on the [EXCHANGE]. A reduction in the liquidity of the Shares on the [EXCHANGE] could adversely affect an investment in the Shares.

The lack of a market for the Shares may limit the ability of Shareholders to sell the Shares.

There has been no market for the Shares, and there can be no assurance that an active trading market for the Shares will be developed or maintained. If an active trading market for the Shares does not exist or continue to exist, the market prices and liquidity of the Shares may be adversely affected.

The [EXCHANGE] may halt trading in the Shares, which would adversely impact investors ability to sell Shares.

To the extent that the [EXCHANGE] halts trading in the Shares, whether on a temporary or permanent basis, investors may not be able to buy or sell Shares, thus adversely affecting an investment in the Shares.

The Trust may be required to terminate and liquidate at a time that is disadvantageous to Shareholders.

If the Trust is required to terminate and liquidate, such termination and liquidation could occur at a time that is disadvantageous to Shareholders, such as when the Blended Bitcoin Price is lower than the Blended Bitcoin Price at the time when Shareholders purchased their Shares. In such a case, when the Trusts Bitcoins are sold as part of the Trusts liquidation, the resulting proceeds distributed to Shareholders will be less than if the Blended Bitcoin Price were higher at the time of sale. See Description of the Trust AgreementTermination of the Trust for more information about the termination of the Trust, including when the termination of the Trust may be triggered by events outside the direct control of the Sponsor, the Trustee or the Shareholders.

Shareholders will not have the rights enjoyed by investors in certain other vehicles.

As interests in an investment trust, the Shares have none of the statutory rights normally associated with the ownership of shares of a corporation (including, for example, the right to bring oppression or derivative actions). In addition, the Shares have limited voting and distribution rights (for example, Shareholders do not have the right to elect directors and will not receive dividends). See Description of the Shares for a description of the limited rights of Shareholders.

Bitcoins held in the Trust Custody Account will be stored on computer hardware using computer software owned by the Sponsor and leased and licensed to the Trustee.

Under the terms provided in the Trust Agreement, the Sponsor will lease and license to the Trust certain hardware and software comprising the Security System. The Sponsor is responsible for taking such steps as it determines, in its sole judgment, to be required to maintain and upgrade the Security System to protect against failure, hacking, malware and general security threats. The Trustee may consult with the Sponsor and the security consultants on the status of the Security System and any recommended upgrades. The Sponsor is not liable to the Trust or to Shareholders for the failure or penetration of the Security System absent gross negligence, fraud or criminal behavior on the part of the Sponsor. To the extent that the Security System fails or is penetrated, any loss of the Trusts Bitcoins or loss of confidence in the Trusts ability to safeguard its Bitcoins may adversely affect an investment in the Shares.

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In issuing Baskets, the Trustee will rely on certain information received from its custodial operations which is subject to confirmation after the Trustee has relied on the information in administering the Trust. If such information turns out to be incorrect, Baskets may be issued in exchange for a number of Bitcoins that is more or less than the number of Bitcoins required to be deposited with the Trust.

The Trustees definitive custodial records are prepared after the close of its business day. However, when issuing Baskets, the Trustee will rely on information reporting the number of Bitcoins credited to the Trusts accounts, which it receives from the Trustees custodial operations during the business day and which is subject to correction during the preparation of the Trustees definitive custodial records after the close of business. If the information relied upon by the Trustee is incorrect, the number of Bitcoins actually received by the Trust may be more or less than the number required to be deposited for the issuance of Baskets.

The Trustee is solely responsible for determining the value of the Bitcoins, and any errors, discontinuance or changes in such valuation calculations may have an adverse effect on the value of the Shares.

The Trustee will determine the NAV of the Trust and the NAV per Share on a daily basis as soon as practicable after 4 P.M. New York time on each day the Shares trade on the [EXCHANGE]. The Trustees determination is made utilizing data from the Trustees custodial operations and the daily calculated Blended Bitcoin Price. To the extent that such NAV or NAV per Share is incorrectly calculated, the Trustee may not be liable for any error and such misreporting of valuation data could adversely affect an investment in the Shares.

Extraordinary expenses resulting from unanticipated events may become payable by the Trust, adversely affecting an investment in the Shares.

In consideration for the Sponsors Fee, the Sponsor has contractually assumed certain operational and periodic expenses of the Trust. See Business of the TrustTrust Expenses. Extraordinary expenses of the Trust (e.g., litigation) and any other expenses that are not assumed by the Sponsor under the terms of the Trust Agreement are borne by the Trust and paid through the sale of the Trusts Bitcoins. Any extraordinary expenses could adversely affect an investment in the Shares.

The sale of the Trusts Bitcoins to pay expenses not assumed by the Sponsor at a time of low Bitcoin prices could adversely affect the value of the Shares.

The Trustee will transfer Bitcoins held by the Trust to the Trust Expense Account to pay Trust expenses not assumed by the Sponsor on an as-needed basis, irrespective of then-current Bitcoin prices on the Bitcoin Exchange Market. The Trust is not actively managed and no attempt will be made to buy or sell Bitcoins to protect against or to take advantage of fluctuations in the price of Bitcoins. Consequently, the Trusts Bitcoins may be sold at a time when the Bitcoin prices on the Bitcoin Exchange Market are low, resulting in a negative impact on the value of the Shares.

The value of the Shares will be adversely affected if the Trust is required to indemnify the Sponsor or the Trustee under the Trust Agreement.

Under the Trust Agreement, each of the Sponsor and the Trustee has a right to be indemnified by the Trust for any liability or expense it incurs without gross negligence, bad faith or willful misconduct on its part. Therefore, the Sponsor or the Trustee may require that the assets of the Trust be sold in order to cover losses or liability suffered by it. Any sale of that kind would reduce the NAV of the Trust and the value of the Shares.

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Intellectual property rights claims may adversely affect the Trust and an investment in the Shares.

The Sponsor is not aware of any intellectual property claims that may prevent the Trust from operating and holding Bitcoins; however, third parties may assert intellectual property claims relating to the operation of the Trust and the mechanics instituted for the investment in, holding of and transfer of Bitcoins. Regardless of the merit of an intellectual property or other legal action, any legal expenses to defend or payments to settle such claims would be extraordinary expenses and be borne by the Trust through the sale of the Trusts Bitcoins. Additionally, a meritorious intellectual property claim could prevent the Trust from operating and force the Trustee to terminate the Trust and liquidate the Trusts Bitcoins. As a result, an intellectual property claim against the Trust could adversely affect an investment in the Shares.

Risk Factors Related to the Regulation of the Trust and the Shares

Shareholders will not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940 or the protections afforded by the CEA.

The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. Consequently, Shareholders will not have the regulatory protections provided to investors in investment companies. The Trust will not hold or trade in commodity futures contracts regulated by the CEA, as administered by the CFTC. Furthermore, the Trust is not a commodity pool for purposes of the CEA, and neither the Sponsor nor the Trustee is subject to regulation by the CFTC as a commodity pool operator or a commodity trading advisor in connection with the operation of the Trust. Consequently, Shareholders will not have the regulatory protections provided to investors in CEA-regulated instruments or commodity pools.

The United States tax rules applicable to an investment in the Shares and the underlying Bitcoins are uncertain and the tax consequences to an investor of an investment in the Shares could differ from the investors expectations.

The tax rules applicable to the Shares and the underlying Bitcoins held by the Trust are complex, and no statutory, judicial, or administrative authority directly addresses the characterization of an investment in Bitcoins. The tax consequences to an investor of an investment in the Shares could differ from the investors expectations. US Shareholders should refer to the section United States Federal Income Tax Consequences for more information.

Regulatory changes or actions may alter the nature of an investment in the Shares or restrict the use of Bitcoins or the operation of the Bitcoin Network in a manner that adversely affects an investment in the Shares.

Until recently, little or no regulatory attention has been directed toward Bitcoins and the Bitcoin Network by US federal and state governments, foreign governments and self-regulatory agencies. As Bitcoins have grown in popularity and in market size, certain US agencies (e.g., FinCEN) have begun to examine the operations of the Bitcoin Network, Bitcoin users and the Bitcoin Exchange Market. There is a possibility of future regulatory change altering, perhaps to a material extent, the nature of an investment in the Shares or the ability of the Trust to continue to operate.

Currently, neither the SEC nor the CFTC has formally asserted regulatory authority over the Bitcoin Network or Bitcoin trading and ownership. To the extent that Bitcoins are determined to be a security, commodity future or other regulated asset, or to the extent that a US or foreign government or quasi-governmental agency exerts regulatory authority over the Bitcoin Network or Bitcoin trading and ownership, trading or ownership in Bitcoins or the Shares may be adversely affected.

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To the extent that future regulatory actions or policies limit the ability to exchange Bitcoins or utilize them for payments, the demand for Bitcoins will be reduced and Authorized Participants may not seek to redeem Baskets in exchange for redemption proceeds in Bitcoins. Furthermore, regulatory actions may limit the ability of end-users to convert Bitcoins into fiat currency (e.g., US Dollars) or use Bitcoins to pay for goods and services. Such regulatory actions or policies would result in a reduction of the Blended Bitcoin Price and the price of the Shares.

Bitcoin currently faces an uncertain regulatory landscape in not only the United States but also in many foreign jurisdictions such as the European Union. Various foreign jurisdictions may, in the near future, adopt laws, regulations or directives that affect the Bitcoin Network and its users, particularly Bitcoin Exchanges and service providers that fall within such jurisdictions regulatory scope. Such laws, regulations or directives may conflict with those of the United States and may negatively impact the acceptance of Bitcoins by users, merchants and service providers outside of the United States and may therefore impede the growth of the Bitcoin economy.

The effect of any future regulatory change on the Trust or Bitcoins is impossible to predict, but such change could be substantial and adverse to the Trust or the value of the Shares.

It may be illegal now, or in the future, to acquire, own, hold, sell or use Bitcoins in one or more countries, and ownership of, holding or trading in Shares may also be considered illegal and subject to sanction.

Although currently Bitcoins are not regulated or are lightly regulated in most countries, including the United States, one or more countries may take regulatory actions in the future that severely restricts the right to acquire, own, hold, sell or use Bitcoins or to exchange Bitcoins for fiat currency. Such an action may also result in the restriction of ownership, holding or trading in the Shares. Such a restriction could result in the termination and liquidation of the Trust at a time that is disadvantageous to Shareholders, or may adversely affect an investment in the Shares.

If regulatory changes or interpretations of the Trusts activities require the regulation of the Trust as a money transmitter under the regulations promulgated by FinCEN under the authority of the US Bank Secrecy Act, the Trust may be required to register and comply with such regulations. To the extent that Sponsor decides to continue the Trust, the required registrations and regulatory compliance steps may result in extraordinary, non-recurring expenses to the Trust. The Sponsor may also decide to terminate the Trust. Any termination of the Trust in response to the changed regulatory circumstances may be at a time that is disadvantageous to investors.

To the extent that the activities of the Trust cause it to be deemed a money transmitter under the regulations promulgated by FinCEN under the authority of the US Bank Secrecy Act, the Trust may be required to comply with FinCEN regulations, including those that would mandate the Trust to implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records. Such additional regulatory obligations may cause the Trust to incur extraordinary expenses, possibly affecting an investment in the Shares in a material and adverse manner. If the Sponsor determines not to comply with such additional regulatory and registration requirements, the Sponsor will instruct the Trustee to terminate the Trust. Any such termination could result in the liquidation of the Trusts Bitcoins at a time that is disadvantageous to an investor in the Shares.

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If regulatory changes require the regulation of Bitcoins under the CEA by the CFTC and/or under the Securities Act by the SEC, the Trust and the Sponsor may be required to register and comply with such regulations. To the extent that the Sponsor decides to continue the Trust, the required registrations and regulatory compliance steps may result in extraordinary, non-recurring expenses to the Trust. The Sponsor may also decide to terminate the Trust. Any termination of the Trust in response to the changed regulatory circumstances may be at a time that is disadvantageous to investors.

Current and future legislation, CFTC and SEC rulemaking and other regulatory developments may impact the manner in which Bitcoins are treated for classification and clearing purposes. In particular, the Bitcoins may not be excluded from the definition of commodity future or security by such future CFTC and SEC rulemaking, respectively. As of the date of this prospectus, the Sponsor is not aware of any rules that have been proposed to regulate Bitcoins as commodity futures or securities. The Sponsor and the Trust cannot be certain as to how future regulatory developments will impact the treatment of Bitcoins under the law.

To the extent that Bitcoins are deemed to fall within the definition of a commodity future pursuant to subsequent rulemaking by the CFTC, the Trust and the Sponsor may be required to register and comply with additional regulation under the CEA. Moreover, the Sponsor may be required to register as a commodity pool operator and to register the Trust as a commodity pool with the CFTC through the National Futures Association. Such additional registrations may result in extraordinary, non-recurring expenses of the Trust, thereby materially and adversely impacting the Shares. If the Sponsor determines not to comply with such additional regulatory and registration requirements, the Sponsor will instruct the Trustee to terminate the Trust. Any such termination could result in the liquidation of the Trusts Bitcoins at a time that is disadvantageous to an investor in the Shares.

To the extent that Bitcoins are deemed to fall within the definition of a security pursuant to subsequent rulemaking by the SEC, the Trust and the Sponsor may be required to register and comply with additional regulation under the Investment Company Act of 1940. Moreover, the Sponsor may be required to register as an investment adviser under the Investment Adviser Act of 1940 and register the Trust as an investment company. Such additional registrations may result in extraordinary, non-recurring expenses of the Trust, thereby materially and adversely impacting the Shares. If the Sponsor determines not to comply with such additional regulatory and registration requirements, the Sponsor will instruct the Trustee to terminate the Trust. Any such termination could result in the liquidation of the Trusts Bitcoins at a time that is disadvantageous to an investor in the Shares.

Risk Factors Related to Potential Conflicts of Interest

Potential conflicts of interest may arise among the Sponsor or its affiliates and the Trust. The Sponsor and its affiliates have no fiduciary duties to the Trust and its Shareholders, which may permit them to favor their own interests to the detriment of the Trust and its Shareholders.

The Sponsor will manage the business and affairs of the Trust. Conflicts of interest may arise among the Sponsor and its affiliates, on the one hand, and the Trust and its Shareholders, on the other hand. As a result of these conflicts, the Sponsor may favor its own interests and the interests of its affiliates over the Trust and its Shareholders. These potential conflicts include, among others, the following:

 The Sponsor has no fiduciary duties to, and is allowed to take into account the interests of parties other than, the Trust and its Shareholders in resolving conflicts of interest;

 The Trust has agreed to indemnify the Sponsor and its affiliates pursuant to the terms of the Trust Agreement;

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 The Sponsor, its affiliates and their officers and employees are not prohibited from engaging in other businesses or activities, including those that might be in direct competition with the Trust; and

 The Sponsor decides whether to retain separate counsel, accountants or others to perform services for the Trust.

By investing in the Shares, investors agree and consent to the provisions set forth in the Trust Agreement. See Description of the Trust Agreement.

Shareholders cannot be assured of the Sponsors continued services, the discontinuance of which may be detrimental to the Trust.

Shareholders cannot be assured that the Sponsor will be willing or able to continue to serve as sponsor to the Trust for any length of time. If the Sponsor discontinues its activities on behalf of the Trust and a substitute sponsor has not been appointed, the Trustee would terminate the Trust and liquidate the Bitcoins it holds.

Appointment of a substitute sponsor will not guarantee the Trusts continued operation, successful or otherwise. Because a substitute sponsor may have no experience managing a DMBA ETP, a substitute sponsor may not have the experience, knowledge or expertise required to ensure that the Trust will operate successfully or to continue to operate at all. A substitute sponsor may not be capable of receiving an assignment of the lease and license of the Security System for reasons including its lack of expertise regarding the necessary maintenance or upgrading of such system. Therefore, the appointment of a substitute sponsor may not necessarily be beneficial to the Trust or an investment in the Shares and the Trustee may determine to terminate the Trust.

Shareholders may be adversely affected by the lack of independent advisers representing investors in the Trust.

The Sponsor has consulted with counsel, accountants and other advisers regarding the formation and operation of the Trust. No counsel has been appointed to represent an investor in connection with the offering of the Shares. Accordingly, an investor should consult his, her, or its own legal, tax and financial advisers regarding the desirability of an investment in the Shares. Lack of such consultation may lead to an undesirable investment decision with respect to investment in the Shares.

Shareholders may be adversely affected by lack of regular shareholder meetings and no voting rights.

Under the Trust Agreement, Shareholders have no voting rights and the Trust will not have regular Shareholder meetings. Shareholders only vote on matters and at such times as determined by the Sponsor. Accordingly, Shareholders do not have the right to authorize actions, appoint service providers or take other actions as may be taken by shareholders of other trusts or companies where shares carry such rights. The Shareholders lack of voting rights gives all control under the Trust Agreement to the Sponsor and the Trustee. The Sponsor may take actions in the operation of the Trust that may be adverse to the interests of Shareholders. The Sponsors operation of the Trust could adversely affect an investment in the Shares.

USE OF PROCEEDS

Proceeds received by the Trust from the issuance and sale of Baskets, including the Seed Baskets and the Shares (which are described on the front page of this prospectus), will consist of Bitcoin deposits. Pursuant to the Trust Agreement, during the life of the Trust such proceeds will only be (1) held by the Trust, (2) distributed to Authorized Participants in connection with the redemption of Baskets, or (3) disbursed to pay the Sponsors Fee or sold as needed to pay the Trusts expenses not assumed by the Sponsor.

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OVERVIEW OF THE BITCOIN INDUSTRY AND MARKET

Introduction to Bitcoins and the Bitcoin Network

A Bitcoin is one type of a Digital Math-Based Asset that is issued by, and transmitted through, an open source, cryptographic protocol platform known as the Bitcoin Network. The Bitcoin Network is an online, end-user-to-end-user network that hosts the public transaction ledger, known as the Blockchain, and the source code that comprises the basis for the cryptographic and algorithmic protocols governing the Bitcoin Network. Bitcoins can be used to pay for goods and services or can be converted to fiat currencies, such as the US Dollar, at rates determined on Bitcoin Exchanges. See Uses of BitcoinsBitcoin Exchange Market, below. Each Bitcoin is a digital file and can be transferred without the involvement of intermediaries or third parties, ensuring 