Tue, Mar 25, 8:35 PM (33 days ago)
**Summary of Financial Performance and Strategic Overview** **Financial Performance:** - **Revenue:** The Fund's total revenue for the year ended December 31, 2024, was $10,717,016, driven by significant gains on cryptocurrency futures contracts. - **Net Income:** The Fund reported a net income of $10,581,435 for the same period, reflecting strong financial performance. - **Expenses:** Total expenses for the year were $135,581, with the majority being management fees and operational costs. - **Earnings per Share:** The net asset value (NAV) per share increased from $50.74 to $106.00, indicating a substantial growth in shareholder value. - **Market Position:** The Fund's shares are traded on NYSE Arca under the ticker symbol "DEFI," with 140,000 shares outstanding as of December 31, 2024. **Strategic Overview:** - **Investment Strategy:** The Fund's investment objective is to track the daily changes in the price of the Nasdaq Bitcoin Reference Price - Settlement (NQBTCS), less expenses. The Fund primarily invests in bitcoin and bitcoin futures contracts listed on the Chicago Mercantile Exchange (CME). - **Merger and Rebranding:** On January 3, 2024, the Fund completed a merger with the Hashdex Bitcoin Futures ETF, and on March 26, 2024, it was renamed to Hashdex Bitcoin ETF to reflect its new investment strategy of holding spot bitcoin. - **Risk Management:** The Fund employs a strategy to maximize its holdings in physical bitcoin, aiming for at least 95% of its assets to be invested in spot bitcoin, with up to 5% in bitcoin futures contracts and cash equivalents. **Future Outlook:** - **Market Conditions:** The Fund expects to continue benefiting from the increasing adoption and price appreciation of bitcoin. The Sponsor will monitor market conditions to ensure the Fund's investment strategy aligns with its objectives. - **Regulatory Environment:** The Fund will navigate the evolving regulatory landscape for cryptocurrencies, ensuring compliance with SEC and CFTC regulations. **Risk Factors:** - **Market Risk:** The Fund is exposed to the volatility of the bitcoin market, which can affect the value of its investments. - **Operational Risk:** The Fund relies on third-party service providers for custody, administration, and trading, which could pose operational risks. - **Regulatory Risk:** Changes in regulations could impact the Fund's ability to operate and invest in bitcoin and bitcoin futures contracts. **Financial Condition:** - **Liquidity:** The Fund maintains liquidity through cash and cash equivalents, which are used to meet margin requirements and operational expenses. - **Capital Structure:** The Fund's capital structure is designed to support its investment strategy, with a focus on holding physical bitcoin and managing risk through futures contracts. **Market Position Changes:** - **Competitive Landscape:** The Fund faces competition from other bitcoin ETFs and investment products. The Sponsor will continue to innovate and adapt to maintain a competitive edge. - **Investor Demand:** The Fund has seen significant investor demand, particularly following the approval of spot bitcoin ETFs in the USA, which has driven the increase in shares outstanding. This summary provides a concise overview of the Fund's financial performance, strategic initiatives, and future outlook, highlighting key financial metrics and strategic decisions that impact the Fund's market position and investor value.