BITCOIN INVESTMENT TRUST The following discussion and analysis of our financial condition and results of operations should be read together with, and is qualified in its entirety by reference to, our audited financial statements and related notes included elsewhere in this Annual Report, which have been prepared in accordance withU.S. GAAP. The following discussion may contain forward-looking statements based on assumptions we believe to be reasonable. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Annual Report, particularly in "Item 1A. Risk Factors" and "Statement Regarding Forward-Looking Statements."
Trust Overview
The Trust is a passive entity that is managed and administered by the Sponsor
and does not have any officers, directors or employees. The Trust holds Bitcoins
and, from time to time on a periodic basis, issues Creation Baskets in exchange
for deposits of Bitcoins. As a passive investment vehicle, the investment
objective of the Trust is for the Shares (based on Bitcoin per Share) to reflect
the value of the Bitcoins held by the Trust, determined by reference to the
Bitcoin Index Price, less the Trust's expenses and other liabilities. The Shares
are designed to provide investors with a cost-effective and convenient way to
invest in Bitcoin. The Trust is not managed like a business corporation or an
active investment vehicle.
As of December 31,
2019 2018 2017
Number of Shares authorized Unlimited Unlimited Unlimited
Number of Shares outstanding 269,445,300 206,559,100 174,283,200
Number of Shares freely tradable(1) 204,546,060 170,827,797 156,001,664
Number of beneficial holders owning at
least 100 Shares(2) 145 115 65
Number of holders of record(2) 145 115 65
(1) Includes the total number of unrestricted Shares not held directly or
indirectly by an officer, director, any person who is the beneficial owner of
more than 10% of the total Shares outstanding, or anyone who controls, is
controlled by or is under common control with such person, or any immediate
family members of officers, directors and control persons. Freely tradable
Shares inclusive of holders with more than 10% of total Shares outstanding
was 204,546,060, 170,827,797 and 156,001,664 for the periods ending
(2)
Therefore, this number does not include the individual holders who have
bought/sold Shares on OTCQX or transferred their eligible Shares to their
brokerage accounts.
Critical Accounting Policies and Estimates
Correction of an Immaterial Misstatement
Subsequent to the issuance of the Trust's quarterly financial statements for the period endedJune 30, 2019 , the Trust determined that the calculation of realized gains and losses using an average cost method did not conform to GAAP.The Trust assessed the materiality of this misstatement both quantitatively and qualitatively and determined the correction of this misstatement was immaterial to the Trust's prior financial statements taken as a whole. As a result, the Trust adjusted for this misstatement onJuly 1, 2019 by calculating realized gains and losses using the specific identification method and recording the out-of-period adjustment. Accordingly, the Trust decreased unrealized gains by a de minimis amount and increased realized losses to properly reflect the Trust's calculation of realized gains and losses using the specific identification method.
Investment Transactions and Revenue Recognition
The Trust considers investment transactions to be the receipt of Bitcoin for Share creations and the delivery of Bitcoin for Share redemptions or for payment of expenses in Bitcoin. At this time, the Trust is not accepting redemption requests from Shareholders. The Trust records its investment transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation or depreciation on investments. Realized gains and losses are calculated using the specific identification method. Realized gains and losses are recognized in connection with transactions including settling obligations for the Sponsor's Fee in Bitcoin.
Principal Market and Fair Value Determination
To determine which market is the Trust's principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust's NAV, the Trust followsFinancial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 820-10, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for Bitcoin in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Trust to assume that Bitcoin is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. 65
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The Trust only receives Bitcoin from the Authorized Participant and does not
itself transact on any Bitcoin Markets. Therefore, the Trust looks to the
Authorized Participant when assessing entity-specific and market-based volume
and level of activity for Bitcoin Markets. The Authorized Participant transacts
in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and
Exchange Markets, each as defined in the FASB Master Glossary. The Authorized
Participant, as a related party of the Sponsor, provides information about the
Bitcoin Markets on which it transacts to the Trust. In determining which of the
eligible Bitcoin Markets is the Trust's principal market, the Trust reviews
these criteria in the following order:
• First, the Trust reviews a list of Bitcoin Markets and excludes anyBitcoin Markets that are nonaccessible to the Trust and the Authorized
Participant(s). The Trust or the Authorized Participant does not have
access to Bitcoin Exchanges that do not have a BitLicense and has accessonly to non-Bitcoin Exchange Markets that the Authorized Participant
reasonably believes are operating in compliance with applicable law,
including federal and state licensing requirements, based upon
information and assurances provided to it by each market.
• Second, the Trust sorts the remaining Bitcoin Markets from high to low by
entity-specific and market-based volume and activity of Bitcoin traded on
each Bitcoin Market in the trailing twelve months.
• Third, the Trust then reviews intra-day pricing fluctuations and thedegree of variances in price on Bitcoin Markets to identify any material
notable variances that may impact the volume or price information of a
particular Bitcoin Market.
• Fourth, the Trust then selects a Bitcoin Market as its principal market
based on the highest market volume, activity and price stability in
comparison to the other Bitcoin Markets on the list. Based on information
reasonably available to the Trust, Exchange Markets have the greatest
volume and level of activity for the asset. The Trust therefore looks to
accessible Exchange Markets as opposed to the Brokered Market, Dealer
Market and Principal-to-Principal Markets to determine its principal
market. As a result of the aforementioned analysis, an Exchange Market
has been selected as the Trust's principal market.
The Trust determines its principal market (or in the absence of a principal
market the most advantageous market) annually and conducts a quarterly analysis
to determine (i) if there have been recent changes to each Bitcoin Market's
trading volume and level of activity in the trailing twelve months, (ii) if any
Bitcoin Markets have developed that the Trust has access to, or (iii) if recent
changes to each Bitcoin Market's price stability have occurred that would
materially impact the selection of the principal market and necessitate a change
in the Trust's determination of its principal market.
The cost basis of the investment in Bitcoin recorded by the Trust for financial
reporting purposes is the fair value of Bitcoin at the time of transfer. The
cost basis recorded by the Trust may differ from proceeds collected by the
Authorized Participant from the sale of the corresponding Shares to investors.
Investment Company Considerations
The Trust is an investment company for GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services - Investment Companies. The Trust uses fair value as its method of accounting for Bitcoin in accordance with its classification as an investment company for accounting purposes. The Trust is not registered under the Investment Company Act of 1940. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and these differences could be material.
Incidental Rights and IR Virtual Currency
An Incidental Right or IR Virtual Currency is recognized, for financial
reporting purposes, on the date on which the fork, airdrop or similar event
occurs, as this is the same time in which future economic benefits are probable
and subsequent to the event that has given rise to the Trust's right to the
Incidental Right or IR Virtual Currency. Incidental Rights and IR Virtual
Currency are carried at fair value until distributed, otherwise transferred or
abandoned by the Trust.
The Trust does not itself transact on any Incidental Right or IR Virtual
Currency market. Therefore, the Trust looks to the Authorized Participant when
assessing entity-specific and market-based volume and level of activity for
Incidental Right or IR Virtual Currency markets. In determining the principal
market (or in the absence of a principal market the most advantageous market)
for Incidental Rights and IR Virtual Currency, the Trust looks to a Brokered
Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets,
each as defined in the FASB Master Glossary, and reviews these criteria in the
following order:
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First, the Trust reviews the list of Incidental Right or IR Virtual Currency markets and excludes any Incidental Right or IR Virtual Currency markets that are non-accessible to the Trust and the Authorized Participant. The Trust or the Authorized Participant does not have access to Incidental Right or IR Virtual Currency Exchange Markets that do not have a BitLicense and only has access to an Incidental Right or IR Virtual Currency non-exchange markets that the Authorized Participant reasonably believes are operating in compliance with applicable law, including federal and state licensing requirements, based upon information and assurances provided to it by each market. Second, the Trust sorts the remaining Incidental Right or IR Virtual Currency markets from high to low by entity-specific and market-based volume and activity of Incidental Right or IR Virtual Currency traded on each Incidental Right or IR Virtual Currency market in the trailing twelve months.
Third, the Trust then reviews intra-day pricing fluctuations and the degree of variances in price on Incidental Right or IR Virtual Currency markets to identify any material notable variances that may impact the volume or price information of a particular Incidental Right or IR Virtual Currency market.
Fourth, the Trust then selects an Incidental Right or IR Virtual Currency market as its principal market based on highest market volume, activity and price stability in comparison to the other Incidental Right or IR Virtual Currency markets on the list. If no market meets the aforementioned criteria, the Trust continues to evaluate the digital asset in accordance with ASC 820. In the absence of a market that can serve as the principal market (or in the absence of a principal market, the most advantageous market) for the relevant digital asset, the Trust will focus on identifying market participants to which it would sell the relevant digital asset in a hypothetical transaction. The Trust also considers the assumptions that those market participants would use in pricing the digital asset in accordance with ASC 820. The Trust accounts for in-kinddistributions of Incidental Rights and IR Virtual Currency in accordance with FASB ASC Topic 845, Nonmonetary Transactions, pursuant to which a transfer of a nonmonetary asset to a Shareholder or to another entity in a nonreciprocal transfer is recorded at the fair value of the asset transferred and a gain or loss is recognized on the disposition of the asset by the Trust. Review of Financial Results
Financial Highlights for the Years ended
(All amounts in the following table and the subsequent paragraphs, except per Share, Bitcoin and price of Bitcoin amounts, are in thousands)
For the Year Ended December 31,
2019 2018 2017
Net realized and unrealized gain (loss) on
investment $ 686,551 $
(1,957,388 )
Net increase (decrease) in net assets resulting from operations$ 651,821 $ (1,985,912 ) $ 2,411,855 Net assets$ 1,866,218 $ 751,622 $ 2,491,383 Net realized and unrealized gain on investment in Bitcoin for the year endedDecember 31, 2019 was$686,551 which includes a realized gain of$23,305 on the transfer of Bitcoins to pay the Sponsor's Fee and net change in unrealized appreciation on investment in Bitcoin of$663,246 . Net realized and unrealized gain on investment in Bitcoin for the year was driven by Bitcoin price appreciation from$3,679.42 per Bitcoin as ofDecember 31, 2018 to$7,145.00 per Bitcoin as ofDecember 31, 2019 . Net increase in net assets resulting from operations was$651,821 for the year endedDecember 31, 2019 , which consisted of the net realized and unrealized gain on investment in Bitcoin, less the Sponsor's Fee of$34,730 . Net assets increased to$1,866,218 atDecember 31, 2019 , a 148% increase for the year. The increase in net assets resulted from the aforementioned Bitcoin price appreciation and the contribution of approximately 61,556 Bitcoin with a value of$462,775 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 4,641 Bitcoin to pay the foregoing Sponsor's Fee. Net realized and unrealized loss on investment for the year endedDecember 31, 2018 was ($1,957,388 ), which includes a realized gain of$22,379 on the transfer of Bitcoins to pay the Sponsor's Fee and net change in unrealized depreciation on investment in Bitcoin of ($1,979,767 ). Net realized and unrealized loss on investment was driven by Bitcoin price depreciation from$14,168.54 per Bitcoin as ofDecember 31, 2017 to$3,679.42 per Bitcoin as ofDecember 31, 2018 . Net decrease in net assets resulting from operations was ($1,985,912 ) for the year endedDecember 31, 2018 , which consisted of the net realized and unrealized loss on investment, plus the Sponsor's Fee of$28,524 . Net assets decreased to$751,622 atDecember 31, 2018 , a 70% decrease for the year. The decrease in net assets resulted from the aforementioned Bitcoin price depreciation and the withdrawal of 3,843 Bitcoin to pay the foregoing Sponsor's Fee, partially offset by the contribution of approximately 32,281 Bitcoin with a value of$246,151 to the Trust in connection with Share creations during the year. 67
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Net realized and unrealized gain on investment for the year endedDecember 31, 2017 was$2,426,043 , which includes a realized gain of$12,150 on the transfer of Bitcoins to pay the Sponsor's Fee and net change in unrealized appreciation on investment in Bitcoin of$2,255,895 . Net realized and unrealized gain on investment was driven by Bitcoin price appreciation from$966.02 per Bitcoin as ofDecember 31, 2016 to$14,168.54 per Bitcoin as ofDecember 31, 2017 . The Trust also recorded a realized gain of$157,998 on the distribution of IR Virtual Currency and Incidental Rights to Shareholders and the transfer of IR Virtual Currency and Incidental Right to the Sponsor to reimburse the Sponsor for Additional Trust Expenses incurred on behalf of the Trust. Net increase in net assets resulting from operations was$2,411,855 for the year endedDecember 31, 2017 , which consisted of the net realized and unrealized gain on investment and realized gain on the distribution of IR Virtual Currency and Incidental Rights, less the Sponsor's Fee of$13,830 andAdditional Trust Expenses of$358 . Net assets increased to$2,491,383 atDecember 31, 2017 , a 1,399% increase for the year. The increase in net assets resulted from the aforementioned Bitcoin price appreciation and the contribution of approximately 7,213 Bitcoin with a value of$70,921 to the Trust in connection with Share creations during the year, partially offset by the withdrawal of 3,469 Bitcoin to pay the foregoing Sponsor's Fee.
Bitcoin Cash Fork
In connection with the Bitcoin Cash hard fork onAugust 1, 2017 , each holder of Bitcoin, including the Trust, passively received an Incidental Right to obtain a number of Bitcoin Cash tokens equal to the number of Bitcoin tokens held by such holder as of that date. The former custodian,Xapo, Inc. , subsequently exercised the Trust's Incidental Rights to obtain Bitcoin Cash tokens without first notifying the Trust that it intended to do so. OnOctober 25, 2017 , the Trust declared a distribution and established a record date for the distribution of Bitcoin Cash held by the Trust to Shareholders of record as of the close of business onNovember 6, 2017 . Based on the price of Bitcoin Cash on its on principal market, as of the record date of$605.90 , the fair market value of the in-kind Bitcoin Cash distribution was$104,518 , resulting in a distribution of$0.61 per outstanding Share based on 170,051,700 Shares issued and outstanding on the record date.
Bitcoin Gold Fork
In connection with the Bitcoin Gold hard fork onOctober 24, 2017 , each holder of Bitcoin, including the Trust, passively received an Incidental Right to obtain a number of Bitcoin Gold tokens equal to the number of Bitcoin tokens held by such holder as of that date. OnNovember 22, 2017 , the Trust declared a distribution and established a record date for the distribution of Bitcoin Gold held by the Trust to Shareholders of record as of the close of business onDecember 4, 2017 . Based on the price of Bitcoin Gold on its on principal market as of the record date of$308.41 , the fair market value of the in-kind Bitcoin Gold distribution was$53,122 , resulting in a distribution of$0.31 per outstanding Share based on 170,051,700 Shares issued and outstanding on the record date.
Bitcoin SegWit2X Fork
In connection with the Bitcoin SegWit2X hard fork onDecember 28, 2017 , each holder of Bitcoin, including the Trust, passively received an Incidental Right to obtain an equal number of Bitcoin SegWit2X. OnDecember 29, 2017 , the Trust declared a distribution and established a record date for the distribution of the Incidental Right to the Bitcoin SegWit2X held by the Trust to Shareholders of record as of the close of business onJanuary 8, 2018 . Due to a lack of observable markets for Bitcoin SegWit2X during the period in which the Trust held the Incidental Rights to Bitcoin SegWit2X and significant uncertainty as to the characteristics of potential market participants for Bitcoin SegWit2X, the Trust determined such Incidental Rights to have a fair value of$0 and no gain or loss was recognized as part of the in-kind Incidental Right distribution. Additionally, onApril 2, 2018 ,Grayscale Investments, LLC , as agent for the Trust, announced that it had, on behalf of the Shareholders on the record date of the distribution of rights to Bitcoin SegWit2X tokens, abandoned the rights to the Bitcoin SegWit2X tokens because it determined that the costs that would be incurred by it in connection with exercising those rights and selling the Bitcoin SegWit2X tokens would exceed the gross proceeds that would be generated by such sales.
Off-Balance Sheet Arrangements
The Trust is not a party to any off-balance sheet arrangements.
Cash Resources and Liquidity
The Trust has not had a cash balance at any time since inception. When selling Bitcoins, Incidental Rights and/or IR Virtual Currency to payAdditional Trust Expenses, the Sponsor endeavors to sell the exact number of Bitcoins, Incidental Rights and/or IR Virtual Currency needed to pay expenses in order to minimize the Trust's holdings of assets other than Bitcoin. As a consequence, the Sponsor expects that the Trust will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period. 68
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In exchange for the Sponsor's Fee, the Sponsor has agreed to assume most of the
expenses incurred by the Trust. As a result, the only ordinary expense of the
Trust during the periods covered by this Annual Report was the Sponsor's Fee.
The Trust is not aware of any trends, demands, conditions or events that are
reasonably likely to result in material changes to its liquidity needs.
Selected Operating Data
For the Year Ended December 31,
2019 2018 2017
(All Bitcoin balances are rounded to the nearest whole Bitcoin)
Bitcoins:
Opening Balance 204,277 175,839 172,095
Creations 61,556 32,281 7,213
Sponsor's Fee, related party (4,641 ) (3,843 ) (3,469 )
Closing balance 261,192 204,277 175,839
Accrued but unpaid Sponsor's
Fee, related party - - -
Net closing balance 261,192 204,277 175,839
Number of Shares:
Opening balance 206,559,100 174,283,200 167,194,300
Creations 62,886,200 32,275,900 7,088,900
Closing balance 269,445,300 206,559,100 174,283,200
As of December 31,
2019 2018 2017(1)
Price of Bitcoin on principal
market(2) $ 7,145.00 $ 3,679.42 $ 14,168.54
NAV per Share(3) $ 6.93 $ 3.64 $ 14.30
Bitcoin Index Price $ 7,200.71 $ 3,760.46 $ 13,340.23
Bitcoin Holdings per Share(4) $ 6.98 $ 3.72 $ 13.46
(1) Share and per Share amounts for periods presented prior to the Share Split
have been retroactively adjusted for the 91-for-1 Share Split of the Trust's
issued and outstanding Shares completed on
(2) The Trust performed an assessment of the principal market at
2019, 2018 and 2017, respectively, and identified the principal market as
Coinbase Pro.
(3) As of
calculated using the fair value of Bitcoin based on the price provided by
Coinbase Pro, the Bitcoin Exchange that the Trust currently considers its
principal market, as of
(4)
Price as represented by the Index as of
valuation date.
non-GAAP methodology where the volume-weighted average price is derived from
multiple Bitcoin Exchanges. See "Item 1. Business-Trust Objective and Key
Operating Metrics" for a description of the
Share. The Bitcoin Exchanges used to calculate the Bitcoin Index Price as of
of
calculate the Index Price consisted of Coinbase Pro, Bitstamp, and itBit.
For accounting purposes, the Trust reflects creations and the Bitcoins receivable with respect to such creations on the date of receipt of a notification of a creation but does not issue Shares until the requisite number of Bitcoins is received. At this time, the Trust is not accepting redemption requests from Shareholders. Subject to receipt of regulatory approval from theSEC and approval by the Sponsor in its sole discretion, the Trust may in the future operate a redemption program. The Trust currently has no intention of seeking regulatory approval to operate an ongoing redemption program. As ofDecember 31, 2019 , the Trust had a net closing balance of 261,192.14022299 Bitcoins with a total value of$1,880,768,856 , based on the Bitcoin Index Price of$7,200.71 onDecember 31, 2019 (non-GAAP methodology). As ofDecember 31, 2019 , the total market value of the Trust's Bitcoin based on the principal market (Coinbase Pro) of$7,145.00 onDecember 31, 2019 was$1,866,217,842 . 69
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As ofDecember 31, 2018 , the Trust had a net closing balance of 204,277.35165345 Bitcoins with a total value of$768,176,810 , based on the Bitcoin Index Price of$3,760.46 onDecember 31, 2018 (non-GAAP methodology). As ofDecember 31, 2018 , the Trust had a net closing balance with a total market value of$751,622,174 , based on the principal market (Coinbase Pro) of$3,679.42 onDecember 31, 2018 . As ofDecember 31, 2017 , the Trust had a net closing balance of 175,839.08652196 Bitcoins with a total value of$2,345,733,857 , based on the Bitcoin Index Price of$13,340.23 onDecember 31, 2017 (non-GAAPmethodology). As ofDecember 31, 2017 , the Trust had a net closing balance with a total market value of$2,491,383,131 , based on the principal market (Coinbase Pro) of$14,168.54 onDecember 31, 2017 .
As movements in the price of Bitcoins will directly affect the price of the Shares, investors should understand recent movements in the price of Bitcoin. Investors, however, should also be aware that past movements in the Bitcoin price are not indicators of future movements. Movements may be influenced by various factors, including, but not limited to, government regulation, security breaches experienced by Service Providers, as well as political and economic uncertainties around the world. The following chart illustrates the movement in theTrust's Bitcoin Holdings per Share (as adjusted for the Share Split for periods prior toJanuary 26, 2018 ) versus the Bitcoin Index Price and the Trust's NAV per Share (as adjusted for the Share Split for periods prior toJanuary 26, 2018 ) fromSeptember 25, 2013 toDecember 31, 2019 . For more information on the determination of theTrust's Bitcoin Holdings , see "Item 1. Business-Overview of the Bitcoin Industry and Market-Bitcoin Value-The Index and the Bitcoin Index Price." .. [[Image Removed: LOGO]] The following table illustrates the movements in the Bitcoin Index Price from the beginning of the Trust's operations onSeptember 25, 2013 toDecember 31, 2019 . Since the beginning of the Trust's operations, the Bitcoin Index Price has ranged from$117.03 to$18,756.45 , with the straight average being$3,229.38 . The Sponsor has not observed a material difference between the Bitcoin Index Price and average prices from the constituent Bitcoin Exchanges individually or as a group. End of Last business Period Average High Date Low Date period day Twelve months ended December 31, 2015$ 272.54 $ 459.52 12/18/2015$ 197.54 1/14/2015$ 425.32 $ 425.32 Twelve months ended December 31, 2016$ 565.26 $ 969.43 12/29/2016$ 371.33 2/3/2016$ 954.21 $ 954.21 Twelve months ended December 31, 2017$ 3,942.40 $ 18,756.45 12/18/2017$ 780.71 1/12/2017$ 13,340.23 $ 14,517.67 Twelve months ended December 31, 2018$ 7,497.29 $ 15,736.96 1/5/2018$ 3,228.07 12/14/2018$ 3,760.46 $ 3,760.46 Twelve months ended December 31, 2019$ 7,319.77 $ 12,681.53
September 25, 2013 (the inception of the Trust's operations) to December 31, 2019$ 3,229.38 $ 18,756.45 12/18/2017$ 117.03 10/3/2013$ 7,200.71 $ 7,200.71 70
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The following table illustrates the movements in the price of Bitcoin, as
reported on the Trust's principal market, from the beginning of the Trust's
operations on
End of Last business
Period Average High Date Low Date period day
Twelve months ended December 31,
2015 $ 272.68 $ 469.00 11/4/2015 $ 184.84 1/14/2015 $ 431.88 $ 431.88
Twelve months ended December 31,
2016 $ 566.31 $ 968.08 12/28/2016 $ 369.18 2/3/2016 $ 966.02 $ 959.92
Twelve months ended December 31,
2017 $ 3,987.48 $ 19,433.21 12/16/2017 $ 793.04 1/11/2017 $ 14,168.54 $ 14,440.01
Twelve months ended December 31,
2018 $ 7,517.17 $ 16,849.50 1/6/2018 $ 3,164.61 12/14/2018 $ 3,679.42 $ 3,679.42
Twelve months ended December 31,
2019 $ 7,356.06 $ 13,849.81 September 25, 2013 (the inception of the Trust's operations) to December 31, 2019$ 3,245.49 $ 19,433.21 12/16/2017$ 110.83 10/2/2013$ 7,145.00 $ 7,145.00 Secondary Market Trading The Trust's Shares have been quoted on OTCQX under the symbol GBTC sinceMarch 26, 2015 . The price of the Shares as quoted on OTCQX has varied significantly from theBitcoins Holdings per Share. FromMay 5, 2015 toDecember 31, 2019 , the maximum premium of the closing price of the Shares quoted on OTCQX over the value of theTrust's Bitcoin Holdings per Share was 142% and the average premium was 41%. Moreover, the closing price of the Shares as, quoted on OTCQX at4:00 p.m. ,New York time, on each business day, has only been quoted at a discount onOctober 28, 2015 . The discount on that day was 0.1%. As ofDecember 31, 2019 , the Trust's shares were quoted on OTCQX at a premium of 17% to theTrust's Bitcoin Holdings per Share. The following table sets out the range of high and low closing prices for the Shares as reported by OTCQX, the Trust's NAV per Share and theTrust's Bitcoin Holdings per Share for each of the quarters sinceJanuary 1, 2017 . High Low Bitcoin Bitcoin Holdings Holdings NAV per per NAV per per OTCQX Share(2) Share(3) OTCQX Share(2) Share(3) 2017 First quarter(1) 1.60 1.32 1.31 1.14 0.82 0.80 Second quarter(1) 6.00 3.03 2.90 1.30 1.11 1.08 Third quarter(1) 11.04 4.95 4.87 3.80 1.89 2.04 Fourth quarter(1) 38.05 19.62 18.94 6.87 4.27 4.19 2018 First quarter(1) 25.69 16.99 15.87 10.05 6.89 6.80 Second quarter 16.88 9.84 9.67 10.55 5.87 5.89 Third quarter 12.26 8.24 8.23 7.85 6.07 5.89 Fourth quarter 7.88 6.59 6.55 3.84 3.13 3.20 2019 First quarter 4.99 4.08 4.02 3.84 3.31 3.32 Second quarter 17.08 13.56 12.37 4.97 4.07 4.05 Third quarter 16.35 12.25 12.41 9.83 7.75 7.81 Fourth quarter 11.82 9.48 9.30 8.01 6.39 6.56
(1) Per Share amounts have been retroactively adjusted for the 91-for-1 Share
Split of the Trust's issued and outstanding Shares completed on
2018.
(2) The NAV is calculated using the fair value of Bitcoins based on the price
provided by the Bitcoin Market that the Trust considers its principal market,
which since
(3)
represented by the Index as of
date.
methodology where the volume-weighted average price is derived from multiple
Bitcoin Exchanges. See "Item 1. Business-Trust Objective and Key Operating
Metrics." The Bitcoin Exchanges used to calculate the Bitcoin Index Price
from
OKCoin, Kraken and Coinbase Pro. Effective
Provider removed OKCoin from the Index due to a suspension in withdrawals.
Bitfinex was also previously included in the Index and was removed on
2017 due to difficulties withdrawing fiat currencies from its Taiwanese
banks, and as a result, it stopped accepting incoming wires, leading to
volatility in the price of Bitcoin on Bitfinex. In response to removing
Bitfinex, the Index Provider added Kraken to the Index on
inconsistencies in the trade data timestamps. From
the end of the first quarter of 2018, the Bitcoin Exchanges used to calculate
the Bitcoin Index Price are Bitstamp, itBit and Coinbase Pro. On
2019, the Index Provider added back Kraken and also added Bittrex to the
Index.
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The following chart sets out the historical closing prices for the Shares as
reported by OTCQX and the
[[Image Removed: LOGO]]
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The following chart sets out the historical premium and discount for the Shares
as reported by OTCQX and the
[[Image Removed: LOGO]]Jumpstart Our Business Startups Act of 2012
The JOBS Act permits the Trust, as an "emerging growth company," to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. The Trust has elected to "opt out" of this provision and, as a result, will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies that are not emerging growth companies. This decision to opt out of the extended transition period under the JOBS Act is irrevocable.
© Edgar Online, source
