Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 unaudited financial statements and related notes included elsewhere in this Quarterly Report, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.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 set forth under “Part II, Item 1A. Risk Factors” in this Quarterly Report, or in “Part I, Item 1A. Risk Factors” and “Forward-Looking Statements” or other sections of our Annual Report on Form 10-K for the year ended June 30, 2022.
Fund Overview
The Fund is a passive entity that is managed and administered by the Manager and does not have any officers, directors or employees. The Fund holds Fund Components and, from time to time on a periodic basis, issues Creation Baskets in exchange for deposits of Fund Components. As a passive investment vehicle, the Fund’s investment objective is for the value of the Shares to reflect the value of the Fund Components held by the Fund, determined by reference to the Digital Asset Reference Rates and weightings within the Fund, less the Fund’s expenses and other liabilities. To date, the Fund has not met its investment objective and the Shares quoted on OTCQX have not reflected the value of Fund Components, less the Fund’s expenses and other liabilities, but have instead traded at both premiums and discounts to such value, which at times have been substantial. The Fund is not managed like a business corporation or an active investment vehicle.
Prior to July 1, 2022, the Fund determined which Fund Components to hold pursuant to the Target Coverage Ratio Methodology. Effective July 1, 2022, the Manager replaced the Target Coverage Ratio Methodology as the fund construction criteria and adopted the DLCS Methodology. Prior to the adoption of the DLCS Methodology, the Digital Asset Reference Rates used to value the Fund Components were Index Prices or Old Indicative Prices. In connection with the adoption of the DLCS Methodology, the Manager changed the Digital Asset Reference Rates used to value the Fund Components and as of the date of this Quarterly Report, each of the Digital Asset Reference Rates are Indicative Prices. See “Item 1. Business—Investment Objective” and “Item 1. Business—Valuation of Digital Assets and Determination of Digital Asset Holdings” in our Annual Report on Form 10-K for additional information.
Any references in this section to the Digital Reference Rates prior to July 1, 2022 are to the Digital Asset Reference Rates in effect prior to the adoption of the DLCS Methodology. In addition, all references in this section to the Digital Asset Holdings and Digital Asset Holdings per Share of the Fund for periods prior to July 1, 2022 have been calculated using Index Prices and/or Indicative Prices, based on the digital assets held by the Fund pursuant to the Target Coverage Ratio Methodology. All references in this section to the Digital Asset Holdings and Digital Asset Holdings per Share of the Fund for periods subsequent to July 1, 2022 have been calculated using Indicative Prices.
Ethereum Fork on September 15, 2022 (ETHPoW)
Background and Measurement
A “hard fork” of a Digital Asset Network occurs when there is a disagreement among users and validators or miners over modifications to a Digital Asset Network, which are typically made through software upgrades and subsequently accepted or rejected through downloads or lack thereof of the relevant software upgrade by users. If less than a substantial majority of users and validators or miners consent to a proposed modification, and the modification is not compatible with the software prior to its modification, a fork in the blockchain results, with one prong running the pre-modified software and the other running the modified software. The effect of such a fork is the existence of two versions of the relevant Digital Asset Network running in parallel, yet lacking interchangeability. After a fork, holders of the original digital asset typically end up holding equal amounts of the original digital asset and the new digital asset.
The Ethereum Network completed the final stages of an upgrade referred to as the “Merge,” on September 15, 2022, and the Ethereum Network transitioned to a proof-of-stake model. Following the Merge, a hard fork of the Ethereum Network occurred, as certain ETH miners and network participants planned to maintain the proof-of-work consensus mechanism that was removed as part of the Merge. This version of the Ethereum Network was rebranded as Ethereum Proof-of-Work.
Immediately following the hard fork on September 15, 2022, holders of ETH passively received rights to an equal number of ETHPoW (referred to as a “right to the Forked Asset”). At that time, the Fund held approximately 40,653 ETH and the newly created ETHPoW was inaccessible to the Fund. On the date of the hard fork, the rights to the Forked Asset were determined to have no value as there were insufficient observable market inputs to determine the fair value of ETHPoW and the ETHPoW assets were not supported by the Custodian.
22
Furthermore, on September 16, 2022, the Manager of the Fund announced that it had declared a distribution and established a record date for the distribution of the rights to the Forked Asset to the shareholders of record as of the close of business on September 26, 2022 (“Record Date Shareholders”).
Subsequent Measurement and Distribution of Rights to ETHPoW
On September 26, 2022 (the “Record Date”), the Fund distributed the rights to the Forked Asset to obtain approximately 40,653 ETHPoW tokens held by the Fund to the Record Date Shareholders as of the close of business on the Record Date. The right to acquire, or otherwise establish dominion and control over, any ETHPoW as a result of the aforementioned fork in the Ethereum blockchain is referred to as a “right to the Forked Asset” and any such ETHPoW acquired through such a right to the Forked Asset is referred to as the “Forked Asset.”
On the Record Date, the Fund, acting on behalf of the Record Date Shareholders and pursuant to the terms of the LLC Agreement governing the Fund, appointed Grayscale Investments, LLC as agent (in this capacity, the “Agent”) on behalf of the Record Date Shareholders and transferred the rights to the Forked Assets held by the Fund to the Agent on behalf of the Record Date Shareholders. The Fund has no ownership interest in the distributed rights to the Forked Assets, no ability to control the actions of the Agent and no right to receive any information about the rights to the Forked Assets or the disposition thereof or of the underlying Forked Asset from the Record Date Shareholders, the Agent or any other person. As of the Record Date, the Fund determined such rights to the Forked Assets to have a fair value of $0 and no gain or loss was recognized as part of the rights to the Forked Assets distribution, due to the lack of a trading venue accessible to the Authorized Participant of the Fund and uncertainty regarding the ability to safely access and custody the ETHPoW.
Critical Accounting Policies and Estimates
Investment Transactions and Revenue Recognition
The Fund considers investment transactions to be the receipt of Fund Components for Share creations and the delivery of Fund Components for Share redemptions or for payment of expenses in Fund Components. At this time, the Fund is not accepting redemption requests from shareholders. The Fund 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 Manager’s Fee in the Fund Components.
Principal Market and Fair Value Determination
To determine which market is the Fund’s principal market for each Fund Component (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Fund’s net asset value (“NAV”), the Fund follows FASB 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 each Fund Component in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Fund to assume that each Fund Component 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.
Effective October 3, 2022, the Manager entered into a Participant Agreement with Grayscale Securities, a wholly owned subsidiary of the Manager and an affiliate and related party of the Fund, pursuant to which Grayscale Securities has agreed to act as an Authorized Participant of the Fund. The Participant Agreement provides the procedures for the creation of Shares of the Fund through the Authorized Participant, which are substantially similar to the procedures for the creation of Shares set forth in the Fund’s prior participant agreement with Genesis, except that the Authorized Participant may engage a Liquidity Provider to source Fund Components on behalf of the Authorized Participant in connection with the creation of Shares. Since October 3, 2022, Grayscale Securities is the only acting Authorized Participant of the Fund. Grayscale Securities has engaged Genesis as a Liquidity Provider. Additional Authorized Participants may be added at any time, subject to the discretion of the Manager.
The Fund only receives Fund Components in connection with a creation order from the Authorized Participant (or its Liquidity Provider) and does not itself transact on any Digital Asset Markets. Therefore, the Fund looks to market-based volume and level of activity for Digital Asset Markets. The Fund, through its Authorized Participant(s), or a Liquidity Provider on behalf of the Authorized Participant(s), may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets, each as defined in the FASB ASC Master Glossary. In determining which of the eligible Digital Asset Markets is the Fund’s principal market for each Fund Component, the Fund reviews these criteria in the following order:
•First, the Fund reviews a list of Digital Asset Markets that follow anti-money laundering (“AML”) and know-your-customer (“KYC”) procedures, and non-Digital Asset Exchange Markets that the Fund or Authorized Participant(s) reasonably
23
believe 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 Fund sorts these Digital Asset Markets from high to low by market-based volume and activity of each Fund Component traded on each Digital Asset Market in the trailing twelve months.
•Third, the Fund then reviews pricing fluctuations and the degree of variances in price on Digital Asset Markets to identify any material notable variances that may impact the volume or price information of a particular Digital Asset Market.
•Fourth, the Fund then selects a Digital Asset Market as its principal market for such Fund Component based on the highest market volume, activity and price stability in comparison to the other Digital Asset Markets on the list. Based on information reasonably available to the Fund, Exchange Markets have the greatest volume and level of activity for the Fund Components. The Fund therefore looks to accessible Exchange Markets as opposed to the Brokered Market, Dealer Market and Principal-to-Principal Markets to determine its principal market for each Fund Component. As a result of the aforementioned analysis, an Exchange Market has been selected as the Fund’s principal market for each Fund Component.
The Fund determines its principal market for each Fund Component (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 Digital Asset Market’s trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Fund has access to, or (iii) if recent changes to each Digital Asset Market’s price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Fund’s determination of its principal market for each Fund Component.
The cost basis of each Fund Component received in connection with a creation order is recorded by the Fund at the fair value of such Fund Component at 4:00 p.m., New York time, on the creation date for financial reporting purposes. The cost basis recorded by the Fund may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.
Investment Company Considerations
The Fund 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 Fund uses fair value as its method of accounting for digital assets in accordance with its classification as an investment company for accounting purposes. The Fund is not a registered investment company under the Investment Company Act. 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.
Review of Financial Results (unaudited)
Financial Highlights for the three and six months ended December 31, 2022 and 2021
(All amounts in the following table and the subsequent paragraphs, except Share, per Share, each Fund Component and price of each Fund Component amounts, are in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Six Months Ended December 31, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net realized and unrealized (loss) gain on investments in digital assets |
|
$ |
(29,312 |
) |
|
$ |
33,352 |
|
|
$ |
(12,668 |
) |
|
$ |
135,298 |
|
Net (decrease) increase in net assets resulting from operations |
|
$ |
(30,420 |
) |
|
$ |
29,591 |
|
|
$ |
(15,097 |
) |
|
$ |
128,704 |
|
Net assets |
|
$ |
158,755 |
|
|
$ |
496,947 |
|
|
$ |
158,755 |
|
|
$ |
496,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized loss on investments in digital assets for the three months ended December 31, 2022 was ($29,312), which includes a realized gain of $1,397 on the transfer of digital assets to pay the Manager’s Fee, and net change in unrealized depreciation on investments in digital assets of ($30,709). Net decrease in net assets resulting from operations was ($30,420) for the three months ended December 31, 2022, which consisted of the net realized and unrealized loss on investments in digital assets, plus the Manager’s Fee of $1,108. Net assets decreased to $158,755 at December 31, 2022, a 16% decrease for the three month period. The decrease in net assets resulted from decreases in Fund Components prices for the period ended December 31, 2022, and from the withdrawal of approximately 40 BTC, 253 ETH, 70,636 ADA, 732 SOL, 610 AVAX and 17,305 MATIC to pay the foregoing Manager’s Fee.
24
Net realized and unrealized gain on investments in digital assets for the three months ended December 31, 2021 was $33,352, which includes a realized gain of $6,213 on the transfer of digital assets to pay the Manager’s Fee, a realized gain of $11,653 as a result of the quarterly rebalance of digital assets, and net change in unrealized appreciation on investments in digital assets of $15,486. Net increase in net assets resulting from operations was $29,591 for the three months ended December 31, 2021, which consisted of the net realized and unrealized gain on investments in digital assets, less the Manager’s Fee of $3,761. Net assets increased to $496,947 at December 31, 2021, a 6% increase for the three month period. The increase in net assets resulted from the price appreciation in the BTC and ETH Fund Components during the period, partially offset by the withdrawal of approximately 41 BTC, 257 ETH, 666 SOL, 72,871 ADA, 1,340 UNI, 151 LTC, 1,014 LINK and 44 BCH to pay the foregoing Manager’s Fee.
Net realized and unrealized loss on investments in digital assets for the six months ended December 31, 2022 was ($12,668), which includes a realized gain of $739 on the transfer of digital assets to pay the Manager’s Fee, a realized loss of ($13,763) as a result of the quarterly rebalance of digital assets, and net change in unrealized appreciation on investments in digital assets of $356. Net decrease in net assets resulting from operations was ($15,097) for the six months ended December 31, 2022, which consisted of the net realized and unrealized loss on investments in digital assets, plus the Manager’s Fee of $2,429. Net assets decreased to $158,755 at December 31, 2022, a 9% decrease for the six month period. The decrease in net assets primarily resulted from the decrease in the price of BTC, as well as certain other Fund Components, and from the withdrawal of approximately 80 BTC, 509 ETH, 1,455 SOL, 96 UNI, 3 BCH, 10 LTC, 65 LINK, 141,864 ADA, 1,202 AVAX, 135 DOT, and 17,305 MATIC to pay the foregoing Manager’s Fee for the period ended December 31, 2022.
Net realized and unrealized gain on investments in digital assets for the six months ended December 31, 2021 was $135,298, which includes a realized gain of $4,938 on the transfer of digital assets to pay the Manager’s Fee, a realized gain of $26,632 as a result of the quarterly rebalance of digital assets, and net change in unrealized appreciation on investments in digital assets of $103,728. Net increase in net assets resulting from operations was $128,704 for the six months ended December 31, 2021, which consisted of the net realized and unrealized gain on investments in digital assets, less the Manager’s Fee of $6,594. Net assets increased to $496,947 at December 31, 2021, a 35% increase for the six month period. The increase in net assets resulted from the contribution of approximately 13 BTC, 77 ETH, 13 BCH, 47 LTC, 310 LINK and 20,953 ADA, with a total value of $935 to the Fund in connection with Share creations during the period, partially offset by the withdrawal of approximately 86 BTC, 519 ETH, 666 SOL, 143,630 ADA, 1,340 UNI, 311 LTC, 2,062 LINK and 90 BCH to pay the foregoing Manager’s Fee.
Cash Resources and Liquidity
The Fund has not had a cash balance at any time since inception. When selling Fund Components and/or Forked Assets to pay Additional Fund Expenses on behalf of the Fund, the Manager endeavors to sell the exact number of Fund Components and/or Forked Assets needed to pay expenses in order to minimize the Fund’s holdings of assets other than the Fund Components. As a consequence, the Manager expects that the Fund will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period. Furthermore, the Fund is not a party to any off-balance sheet arrangements.
In exchange for the Manager’s Fee, the Manager has agreed to assume most of the expenses incurred by the Fund. As a result, the only ordinary expense of the Fund during the periods covered by this Quarterly Report was the Manager’s Fee. The Fund 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Six Months Ended December 31, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
(All Fund Component balances are rounded to the nearest whole number) |
|
BTC: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
6,391 |
|
|
|
7,083 |
|
|
|
6,231 |
|
|
|
7,340 |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
13 |
|
Portfolio rebalancing(1)(2)(3)(4)(5)(6) |
|
|
(99 |
) |
|
|
(432 |
) |
|
|
101 |
|
|
|
(657 |
) |
Manager's Fee, related party |
|
|
(40 |
) |
|
|
(41 |
) |
|
|
(80 |
) |
|
|
(86 |
) |
Closing balance |
|
|
6,252 |
|
|
|
6,610 |
|
|
|
6,252 |
|
|
|
6,610 |
|
Accrued but unpaid Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net closing balance |
|
|
6,252 |
|
|
|
6,610 |
|
|
|
6,252 |
|
|
|
6,610 |
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ETH: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
40,612 |
|
|
|
41,481 |
|
|
|
39,360 |
|
|
|
45,288 |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
77 |
|
Portfolio rebalancing(1)(2)(3)(4)(5)(6) |
|
|
(364 |
) |
|
|
(569 |
) |
|
|
1,144 |
|
|
|
(4,191 |
) |
Manager's Fee, related party |
|
|
(253 |
) |
|
|
(257 |
) |
|
|
(509 |
) |
|
|
(519 |
) |
Closing balance |
|
|
39,995 |
|
|
|
40,655 |
|
|
|
39,995 |
|
|
|
40,655 |
|
Accrued but unpaid Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net closing balance |
|
|
39,995 |
|
|
|
40,655 |
|
|
|
39,995 |
|
|
|
40,655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADA: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
11,296,824 |
|
|
|
11,206,827 |
|
|
|
10,916,583 |
|
|
|
- |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
20,953 |
|
Portfolio rebalancing(2)(3)(4)(5)(6) |
|
|
(54,506 |
) |
|
|
393,666 |
|
|
|
396,963 |
|
|
|
11,650,299 |
|
Manager's Fee, related party |
|
|
(70,636 |
) |
|
|
(72,871 |
) |
|
|
(141,864 |
) |
|
|
(143,630 |
) |
Closing balance |
|
|
11,171,682 |
|
|
|
11,527,622 |
|
|
|
11,171,682 |
|
|
|
11,527,622 |
|
Accrued but unpaid Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net closing balance |
|
|
11,171,682 |
|
|
|
11,527,622 |
|
|
|
11,171,682 |
|
|
|
11,527,622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MATIC: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Portfolio rebalancing(6) |
|
|
2,879,708 |
|
|
|
- |
|
|
|
2,879,708 |
|
|
|
- |
|
Manager's Fee, related party |
|
|
(17,305 |
) |
|
|
- |
|
|
|
(17,305 |
) |
|
|
- |
|
Closing balance |
|
|
2,862,403 |
|
|
|
- |
|
|
|
2,862,403 |
|
|
|
- |
|
Accrued but unpaid Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net closing balance |
|
|
2,862,403 |
|
|
|
- |
|
|
|
2,862,403 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOL: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
114,746 |
|
|
|
- |
|
|
|
111,216 |
|
|
|
- |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Portfolio rebalancing(3)(4)(5)(6) |
|
|
1,777 |
|
|
|
106,015 |
|
|
|
6,030 |
|
|
|
106,015 |
|
Manager's Fee, related party |
|
|
(732 |
) |
|
|
(666 |
) |
|
|
(1,455 |
) |
|
|
(666 |
) |
Closing balance |
|
|
115,791 |
|
|
|
105,349 |
|
|
|
115,791 |
|
|
|
105,349 |
|
Accrued but unpaid Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net closing balance |
|
|
115,791 |
|
|
|
105,349 |
|
|
|
115,791 |
|
|
|
105,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVAX: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
94,096 |
|
|
|
- |
|
|
|
88,974 |
|
|
|
- |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Portfolio rebalancing(4)(5)(6) |
|
|
3,071 |
|
|
|
- |
|
|
|
8,785 |
|
|
|
- |
|
Manager's Fee, related party |
|
|
(610 |
) |
|
|
- |
|
|
|
(1,202 |
) |
|
|
- |
|
Closing balance |
|
|
96,557 |
|
|
|
- |
|
|
|
96,557 |
|
|
|
- |
|
Accrued but unpaid Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net closing balance |
|
|
96,557 |
|
|
|
- |
|
|
|
96,557 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DOT: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
- |
|
|
|
- |
|
|
|
328,187 |
|
|
|
- |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Portfolio rebalancing(4)(5) |
|
|
- |
|
|
|
- |
|
|
|
(328,052 |
) |
|
|
- |
|
Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
(135 |
) |
|
|
- |
|
Closing balance |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Accrued but unpaid Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net closing balance |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTC: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
- |
|
|
|
25,349 |
|
|
|
23,725 |
|
|
|
26,185 |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
47 |
|
Portfolio rebalancing(1)(2)(3)(4)(5) |
|
|
- |
|
|
|
(1,332 |
) |
|
|
(23,715 |
) |
|
|
(2,055 |
) |
Manager's Fee, related party |
|
|
- |
|
|
|
(151 |
) |
|
|
(10 |
) |
|
|
(311 |
) |
Closing balance |
|
|
- |
|
|
|
23,866 |
|
|
|
- |
|
|
|
23,866 |
|
Accrued but unpaid Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net closing balance |
|
|
- |
|
|
|
23,866 |
|
|
|
- |
|
|
|
23,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNI: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
- |
|
|
|
- |
|
|
|
232,687 |
|
|
|
- |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Portfolio rebalancing(3)(4)(5) |
|
|
- |
|
|
|
213,332 |
|
|
|
(232,591 |
) |
|
|
213,332 |
|
Manager's Fee, related party |
|
|
- |
|
|
|
(1,340 |
) |
|
|
(96 |
) |
|
|
(1,340 |
) |
Closing balance |
|
|
- |
|
|
|
211,992 |
|
|
|
- |
|
|
|
211,992 |
|
Accrued but unpaid Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net closing balance |
|
|
- |
|
|
|
211,992 |
|
|
|
- |
|
|
|
211,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LINK: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
- |
|
|
|
166,050 |
|
|
|
158,987 |
|
|
|
153,328 |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
310 |
|
Portfolio rebalancing(1)(2)(3)(4)(5) |
|
|
- |
|
|
|
(4,669 |
) |
|
|
(158,922 |
) |
|
|
8,791 |
|
Manager's Fee, related party |
|
|
- |
|
|
|
(1,014 |
) |
|
|
(65 |
) |
|
|
(2,062 |
) |
Closing balance |
|
|
- |
|
|
|
160,367 |
|
|
|
- |
|
|
|
160,367 |
|
Accrued but unpaid Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net closing balance |
|
|
- |
|
|
|
160,367 |
|
|
|
- |
|
|
|
160,367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BCH: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
- |
|
|
|
7,279 |
|
|
|
6,314 |
|
|
|
7,380 |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
13 |
|
Portfolio rebalancing(1)(2)(3)(4)(5) |
|
|
- |
|
|
|
(313 |
) |
|
|
(6,311 |
) |
|
|
(381 |
) |
Manager's Fee, related party |
|
|
- |
|
|
|
(44 |
) |
|
|
(3 |
) |
|
|
(90 |
) |
Closing balance |
|
|
- |
|
|
|
6,922 |
|
|
|
- |
|
|
|
6,922 |
|
Accrued but unpaid Manager's Fee, related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net closing balance |
|
|
- |
|
|
|
6,922 |
|
|
|
- |
|
|
|
6,922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
|
15,867,400 |
|
|
|
15,867,400 |
|
|
|
15,867,400 |
|
|
|
15,837,800 |
|
Creations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
29,600 |
|
Closing balance |
|
|
15,867,400 |
|
|
|
15,867,400 |
|
|
|
15,867,400 |
|
|
|
15,867,400 |
|
27
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
|
2022 |
|
|
2021 |
|
Prices of digital assets on principal market |
|
|
|
|
|
|
BTC |
|
$ |
16,556.29 |
|
|
$ |
45,867.86 |
|
ETH |
|
$ |
1,201.33 |
|
|
$ |
3,644.75 |
|
ADA(2) |
|
$ |
0.25 |
|
|
$ |
1.29 |
|
MATIC(6) |
|
$ |
0.76 |
|
|
N/A |
|
SOL(3) |
|
$ |
10.09 |
|
|
$ |
168.25 |
|
AVAX(4) |
|
$ |
10.95 |
|
|
N/A |
|
LTC(5) |
|
N/A |
|
|
$ |
144.08 |
|
UNI(3)(5) |
|
N/A |
|
|
$ |
16.83 |
|
LINK(1)(5) |
|
N/A |
|
|
$ |
19.07 |
|
BCH(5) |
|
N/A |
|
|
$ |
420.63 |
|
|
|
|
|
|
|
|
NAV per Share |
|
$ |
10.01 |
|
|
$ |
31.32 |
|
|
|
|
|
|
|
|
Digital Asset Reference Rates(7) |
|
|
|
|
|
|
BTC |
|
$ |
16,557.57 |
|
|
$ |
45,869.35 |
|
ETH |
|
$ |
1,201.84 |
|
|
$ |
3,644.98 |
|
ADA(2) |
|
$ |
0.25 |
|
|
$ |
1.29 |
|
MATIC(6) |
|
$ |
0.76 |
|
|
N/A |
|
SOL(3) |
|
$ |
10.06 |
|
|
$ |
168.22 |
|
AVAX(4) |
|
$ |
10.98 |
|
|
N/A |
|
LTC(5) |
|
N/A |
|
|
$ |
144.08 |
|
UNI(3)(5) |
|
N/A |
|
|
$ |
16.82 |
|
LINK(1)(5) |
|
N/A |
|
|
$ |
19.07 |
|
BCH(5) |
|
N/A |
|
|
$ |
420.55 |
|
|
|
|
|
|
|
|
Digital Asset Holdings per Share(8) |
|
$ |
10.01 |
|
|
$ |
31.32 |
|
(1)Effective April 2, 2021, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase LINK in accordance with the Target Coverage Ratio Methodology.
(2)Effective July 1, 2021, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase ADA in accordance with the Target Coverage Ratio Methodology.
(3)Effective October 1, 2021, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase SOL and UNI in accordance with the Target Coverage Ratio Methodology.
(4)Effective April 5, 2022, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase DOT and AVAX in accordance with the Target Coverage Ratio Methodology.
(5)Effective July 7, 2022, following adoption of the DLCS Methodology, the Fund removed DOT, LTC, UNI, LINK and BCH from the Fund’s portfolio and sold the DOT, LTC, UNI, LINK and BCH holdings to purchase additional tokens of the remaining Fund Components in proportion to their respective weightings.
(6)Effective October 5, 2022, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase MATIC in accordance with the DLCS Methodology.
(7)Prior to July 1, 2022, the Digital Asset Reference Rates were all Index Prices except DOT and AVAX, which were Old Indicative Prices. Effective July 1, 2022 and for the six months ended December 31, 2022, the Digital Asset Reference Rate for each Fund Component is an Indicative Price. As a result, the Digital Asset Reference Rates as of December 31, 2022 are not directly comparable to the Digital Asset Reference Rates as of December 31, 2021.
(8)Prior to July 1, 2022, the Digital Asset Holdings per Share was calculated based on the Fund Components held by the Fund pursuant to the Target Coverage Ratio Methodology. Effective July 1, 2022 and for the six months ended December 31, 2022, Digital Asset Holdings per Share is calculated based on the Fund Components held by the Fund pursuant to the DLCS Methodology. As a result, the Digital Asset Holdings per Share as of December 31, 2022 is not directly comparable to the Digital Asset Holdings per Share as of December 31, 2021. See “Item 1. Business—Investment Objective” and “Item 1.
28
Business—Valuation of Digital Assets and Determination of Digital Asset Holdings” in our Annual Report on Form 10-K for additional information.
For accounting purposes, the Fund reflects creations and the Fund Components 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 Fund Components is received. At this time, the Fund is not accepting redemption requests from shareholders. Subject to receipt of regulatory approval from the SEC and approval by the Manager in its sole discretion, the Fund may in the future operate a redemption program. The Fund currently has no intention of seeking regulatory approval to operate an ongoing redemption program.
As of December 31, 2022, the Fund had a net closing balance with a value of $158,781,878, based on the Digital Asset Reference Rates in effect under the DLCS Methodology (non-GAAP methodology). As of December 31, 2022, the Fund had a total market value of $158,755,046, based on the principal market prices.
As of December 31, 2021, the Fund had a net closing balance with a value of $496,961,188, based on the Digital Asset Reference Rates in effect under the Target Coverage Ratio Methodology (non-GAAP methodology). As of December 31, 2021, the Fund had a total market value of $496,947,824, based on the principal market prices.
Historical Fund Component Prices
As movements in the price of each Fund Component will directly affect the price of the Shares, investors should understand recent movements in the price of each Fund Component. Investors, however, should also be aware that past movements in each of the Fund Component prices 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 the Fund's Digital Asset Holdings per Share, based on the Digital Asset Reference Rate of each Fund Component, versus the Fund's net asset value per Share, as calculated in accordance with GAAP from February 1, 2018 to December 31, 2022. Prior to July 1, 2022, the Digital Asset Holdings per Share was calculated based on the Fund Components held by the Fund pursuant to the Target Coverage Ratio Methodology and using Index Prices or Old Indicative Prices. Effective July 1, 2022, and for the six months ended December 31, 2022, the Digital Asset Holdings per Share is calculated based on the Fund Components held by the Fund pursuant to the DLCS Methodology and using Indicative Prices. As a result, the Digital Asset Holdings per Share for periods subsequent to July 1, 2022 are not directly comparable to the Digital Asset Holdings per Share in periods prior to July 1, 2022.
29
Bitcoin
The following table illustrates the movements in the Digital Asset Reference Rate for BTC from the beginning of the Fund’s operations on February 1, 2018 to December 31, 2022. Prior to July 1, 2022, the Digital Asset Reference Rate for BTC was an Index Price for BTC. Effective July 1, 2022, the Digital Asset Reference Rate for BTC is an Indicative Price for BTC. As a result, the Digital Asset Rates for BTC for periods subsequent to July 1, 2022 are not directly comparable to the Digital Asset Reference Rates for BTC for periods prior to July 1, 2022. Since the beginning of the Fund’s operations, the Digital Asset Reference Rate has ranged from $3,164.99 to $67,352.59, with the straight average being $20,442.02 through December 31, 2022. The Manager has not observed a material difference between the Digital Asset Reference Rate and average prices from the constituent Digital Asset Exchanges individually or as a group.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Reference Rate |
|
|
Date |
|
Digital Asset Reference Rate |
|
|
Date |
|
End of
period |
|
|
Last
business
day |
|
February 1, 2018 to December 31, 2018 |
|
$ |
7,021.76 |
|
|
$ |
11,740.56 |
|
|
2/20/2018 |
|
$ |
3,164.99 |
|
|
12/14/2018 |
|
$ |
3,679.42 |
|
|
$ |
3,679.42 |
|
Twelve months ended December 31, 2019 |
|
$ |
7,355.63 |
|
|
$ |
13,838.57 |
|
|
6/26/2019 |
|
$ |
3,358.99 |
|
|
2/7/2019 |
|
$ |
7,144.93 |
|
|
$ |
7,144.93 |
|
Twelve months ended December 31, 2020 |
|
$ |
11,103.62 |
|
|
$ |
29,185.50 |
|
|
12/31/2020 |
|
$ |
4,941.00 |
|
|
3/16/2020 |
|
$ |
29,185.50 |
|
|
$ |
29,185.50 |
|
Twelve months ended December 31, 2021 |
|
$ |
47,420.39 |
|
|
$ |
67,352.59 |
|
|
11/9/2021 |
|
$ |
29,311.80 |
|
|
1/1/2021 |
|
$ |
45,869.35 |
|
|
$ |
45,869.35 |
|
Twelve months ended December 31, 2022 |
|
$ |
28,194.51 |
|
|
$ |
47,980.44 |
|
|
3/28/2022 |
|
$ |
15,786.90 |
|
|
11/21/2022 |
|
$ |
16,557.57 |
|
|
$ |
16,536.90 |
|
February 1, 2018 to December 31, 2022 |
|
$ |
20,442.02 |
|
|
$ |
67,352.59 |
|
|
11/9/2021 |
|
$ |
3,164.99 |
|
|
12/14/2018 |
|
$ |
16,557.57 |
|
|
$ |
16,536.90 |
|
The following table illustrates the movements in the Digital Asset Market price of BTC, as reported on the Fund’s principal market for BTC, from the beginning of the Fund’s operations on February 1, 2018 to December 31, 2022. Since the beginning of the Fund’s operations, the price of BTC has ranged from $3,164.61 to $67,371.70, with the straight average being $20,442.02 through December 31, 2022:
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Market Price |
|
|
Date |
|
Digital Asset Market Price |
|
|
Date |
|
End of
period |
|
|
Last
business
day |
|
February 1, 2018 to December 31, 2018 |
|
$ |
7,021.08 |
|
|
$ |
11,770.00 |
|
|
2/20/2018 |
|
$ |
3,164.61 |
|
|
12/14/2018 |
|
$ |
3,679.42 |
|
|
$ |
3,679.42 |
|
Twelve months ended December 31, 2019 |
|
$ |
7,356.06 |
|
|
$ |
13,849.81 |
|
|
6/26/2019 |
|
$ |
3,358.79 |
|
|
2/7/2019 |
|
$ |
7,145.00 |
|
|
$ |
7,145.00 |
|
Twelve months ended December 31, 2020 |
|
$ |
11,103.80 |
|
|
$ |
29,185.05 |
|
|
12/31/2020 |
|
$ |
4,950.39 |
|
|
3/16/2020 |
|
$ |
29,185.05 |
|
|
$ |
29,185.05 |
|
Twelve months ended December 31, 2021 |
|
$ |
47,420.71 |
|
|
$ |
67,371.70 |
|
|
11/9/2021 |
|
$ |
29,295.98 |
|
|
1/1/2021 |
|
$ |
45,867.86 |
|
|
$ |
45,867.86 |
|
Twelve months ended December 31, 2022 |
|
$ |
28,194.16 |
|
|
$ |
47,982.33 |
|
|
3/28/2022 |
|
$ |
15,766.93 |
|
|
11/21/2022 |
|
$ |
16,556.29 |
|
|
$ |
16,561.21 |
|
February 1, 2018 to December 31, 2022 |
|
$ |
20,442.02 |
|
|
$ |
67,371.70 |
|
|
11/9/2021 |
|
$ |
3,164.61 |
|
|
12/14/2018 |
|
$ |
16,556.29 |
|
|
$ |
16,561.21 |
|
Ethereum
The following table illustrates the movements in the Digital Asset Reference Rate for ETH from the beginning of the Fund’s operations on February 1, 2018 to December 31, 2022. Prior to July 1, 2022, the Digital Asset Reference Rate for ETH was an Index Price for ETH. Effective July 1, 2022, the Digital Asset Reference Rate for ETH is an Indicative Price for ETH. As a result, the Digital Asset Rates for ETH for periods subsequent to July 1, 2022 are not directly comparable to the Digital Asset Reference Rates for ETH for periods prior to July 1, 2022. Since the beginning of the Fund’s operations, the Digital Asset Reference Rate has ranged from $82.41 to $4,776.32, with the straight average being $1,146.78 through December 31, 2022. The Manager has not observed a material difference between the Digital Asset Reference Rate and average prices from the constituent Digital Asset Exchanges included in the relevant index individually or as a group.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Reference Rate |
|
|
Date |
|
Digital Asset Reference Rate |
|
|
Date |
|
End of
period |
|
|
Last
business
day |
|
February 1, 2018 to December 31, 2018 |
|
$ |
423.69 |
|
|
$ |
1,015.13 |
|
|
2/1/2018 |
|
$ |
82.41 |
|
|
12/14/2018 |
|
$ |
130.84 |
|
|
$ |
130.84 |
|
Twelve months ended December 31, 2019 |
|
$ |
180.52 |
|
|
$ |
350.60 |
|
|
6/26/2019 |
|
$ |
102.84 |
|
|
2/6/2019 |
|
$ |
127.84 |
|
|
$ |
127.84 |
|
Twelve months ended December 31, 2020 |
|
$ |
307.03 |
|
|
$ |
752.13 |
|
|
12/30/2020 |
|
$ |
109.83 |
|
|
3/16/2020 |
|
$ |
745.01 |
|
|
$ |
745.01 |
|
Twelve months ended December 31, 2021 |
|
$ |
2,775.83 |
|
|
$ |
4,776.32 |
|
|
11/9/2021 |
|
$ |
731.87 |
|
|
1/1/2021 |
|
$ |
3,644.98 |
|
|
$ |
3,644.98 |
|
Twelve months ended December 31, 2022 |
|
$ |
1,987.71 |
|
|
$ |
3,816.94 |
|
|
1/4/2022 |
|
$ |
913.51 |
|
|
6/18/2022 |
|
$ |
1,201.84 |
|
|
$ |
1,195.54 |
|
February 1, 2018 to December 31, 2022 |
|
$ |
1,146.78 |
|
|
$ |
4,776.32 |
|
|
11/9/2021 |
|
$ |
82.41 |
|
|
12/14/2018 |
|
$ |
1,201.84 |
|
|
$ |
1,195.54 |
|
The following table illustrates the movements in the Digital Asset Market price of ETH, as reported on the Fund’s principal market for ETH, from the beginning of the Fund’s operations on February 1, 2018 to December 31, 2022. Since the beginning of the Fund’s operations, the price of ETH has ranged from $82.34 to $4,776.95, with the straight average being $1,146.84 through December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Market Price |
|
|
Date |
|
Digital Asset Market Price |
|
|
Date |
|
End of
period |
|
|
Last
business
day |
|
February 1, 2018 to December 31, 2018 |
|
$ |
423.65 |
|
|
$ |
1,013.98 |
|
|
2/1/2018 |
|
$ |
82.34 |
|
|
12/14/2018 |
|
$ |
130.90 |
|
|
$ |
130.90 |
|
Twelve months ended December 31, 2019 |
|
$ |
180.54 |
|
|
$ |
350.76 |
|
|
6/26/2019 |
|
$ |
102.88 |
|
|
2/6/2019 |
|
$ |
127.86 |
|
|
$ |
127.86 |
|
Twelve months ended December 31, 2020 |
|
$ |
307.02 |
|
|
$ |
751.88 |
|
|
12/30/2020 |
|
$ |
110.29 |
|
|
3/16/2020 |
|
$ |
744.99 |
|
|
$ |
744.99 |
|
Twelve months ended December 31, 2021 |
|
$ |
2,775.91 |
|
|
$ |
4,776.95 |
|
|
11/9/2021 |
|
$ |
731.87 |
|
|
1/1/2021 |
|
$ |
3,644.75 |
|
|
$ |
3,644.75 |
|
Twelve months ended December 31, 2022 |
|
$ |
1,987.98 |
|
|
$ |
3,816.02 |
|
|
1/4/2022 |
|
$ |
913.24 |
|
|
6/18/2022 |
|
$ |
1,201.33 |
|
|
$ |
1,196.81 |
|
February 1, 2018 to December 31, 2022 |
|
$ |
1,146.84 |
|
|
$ |
4,776.95 |
|
|
11/9/2021 |
|
$ |
82.34 |
|
|
12/14/2018 |
|
$ |
1,201.33 |
|
|
$ |
1,196.81 |
|
Cardano
Effective July 1, 2021, the Manager adjusted the Fund’s portfolio in connection with its quarterly review by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase ADA in accordance with the Target Coverage Ratio Methodology.
31
The following table illustrates the movements in the Digital Asset Reference Rate from the addition of the token to the Fund’s portfolio on July 1, 2021 to December 31, 2022. Prior to July 1, 2022, the Digital Asset Reference Rate for ADA was an Index Price for ADA. Effective July 1, 2022, the Digital Asset Reference Rate for ADA is an Indicative Price for ADA. As a result, the Digital Asset Rates for ADA for periods subsequent to July 1, 2022 are not directly comparable to the Digital Asset Reference Rates for ADA for periods prior to July 1, 2022. Since the token was added to the Fund’s portfolio, the Digital Asset Reference Rate for ADA has ranged from $0.24 to $2.99, with the straight average being $1.05 through December 31, 2022. The Manager has not observed a material difference between the Digital Asset Reference Rate for ADA and average prices from the constituent Digital Asset Exchanges included in the relevant index individually or as a group.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Reference Rate |
|
|
Date |
|
Digital Asset Reference Rate |
|
|
Date |
|
End of
period |
|
|
Last business day |
|
July 1, 2021 to December 31, 2021 |
|
$ |
1.87 |
|
|
$ |
2.99 |
|
|
9/3/2021 |
|
$ |
1.08 |
|
|
7/20/2021 |
|
$ |
1.29 |
|
|
$ |
1.29 |
|
Twelve months ended December 31, 2022 |
|
$ |
0.64 |
|
|
$ |
1.54 |
|
|
1/17/2022 |
|
$ |
0.24 |
|
|
12/29/2022 |
|
$ |
0.25 |
|
|
$ |
0.24 |
|
July 1, 2021 to December 31, 2022 |
|
$ |
1.05 |
|
|
$ |
2.99 |
|
|
9/3/2021 |
|
$ |
0.24 |
|
|
12/29/2022 |
|
$ |
0.25 |
|
|
$ |
0.24 |
|
The following table illustrates the movements in the Digital Asset Market price of ADA, as reported on the Fund’s principal market for ADA, from the addition of the token to the Fund’s portfolio on July 1, 2021 to December 31, 2022. Since the addition of the token to the Fund’s portfolio, the price of ADA has ranged from $0.24 to $2.99, with the straight average being $1.05 through December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Market Price |
|
|
Date |
|
Digital Asset Market Price |
|
|
Date |
|
End of
period |
|
|
Last business day |
|
July 1, 2021 to December 31, 2021 |
|
$ |
1.87 |
|
|
$ |
2.99 |
|
|
9/3/2021 |
|
$ |
1.08 |
|
|
7/20/2021 |
|
$ |
1.29 |
|
|
$ |
1.29 |
|
Twelve months ended December 31, 2022 |
|
$ |
0.64 |
|
|
$ |
1.54 |
|
|
1/17/2022 |
|
$ |
0.24 |
|
|
12/29/2022 |
|
$ |
0.25 |
|
|
$ |
0.25 |
|
July 1, 2021 to December 31, 2022 |
|
$ |
1.05 |
|
|
$ |
2.99 |
|
|
9/3/2021 |
|
$ |
0.24 |
|
|
12/29/2022 |
|
$ |
0.25 |
|
|
$ |
0.25 |
|
Polygon
Effective October 5, 2022, the Manager adjusted the Fund’s portfolio in connection with its quarterly review by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase MATIC in accordance with the DLCS Methodology.
The following table illustrates the movements in the Digital Asset Reference Rate from the addition of the token to the Fund’s portfolio on October 5, 2022 to December 31, 2022. The Digital Asset Reference Rate for MATIC is an Indicative Price for MATIC. Since the token was added to the Fund’s portfolio, the Digital Asset Reference Rate for MATIC has ranged from $0.76 to $1.27, with the straight average being $0.88 through December 31, 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Reference Rate |
|
|
Date |
|
Digital Asset Reference Rate |
|
|
Date |
|
End of
period |
|
|
Last business day |
|
October 5, 2022 to December 31, 2022 |
|
$ |
0.88 |
|
|
$ |
1.27 |
|
|
11/7/2022 |
|
$ |
0.76 |
|
|
12/30/2022 |
|
$ |
0.76 |
|
|
$ |
0.76 |
|
The following table illustrates the movements in the Digital Asset Market price of MATIC, as reported on the Fund’s principal market for MATIC, from the addition of the token to the Fund’s portfolio on October 5, 2022 to December 31, 2022. Since the addition of the token to the Fund’s portfolio, the price of MATIC has ranged from $0.76 to $1.26, with the straight average being $0.88 through December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Market Price |
|
|
Date |
|
Digital Asset Market Price |
|
|
Date |
|
End of
period |
|
|
Last business day |
|
October 5, 2022 to December 31, 2022 |
|
$ |
0.88 |
|
|
$ |
1.26 |
|
|
11/7/2022 |
|
$ |
0.76 |
|
|
12/30/2022 |
|
$ |
0.76 |
|
|
$ |
0.76 |
|
32
Solana
Effective October 1, 2021, the Manager adjusted the Fund’s portfolio in connection with its quarterly review by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase SOL in accordance with the Target Coverage Ratio Methodology.
The following table illustrates the movements in the Digital Asset Reference Rate from the addition of the token to the Fund’s portfolio on October 1, 2021 to December 31, 2022. Prior to July 1, 2022, the Digital Asset Reference Rate for SOL was an Index Price for SOL. Effective July 1, 2022, the Digital Asset Reference Rate for SOL is an Indicative Price for SOL. As a result, the Digital Asset Rates for SOL for periods subsequent to July 1, 2022 are not directly comparable to the Digital Asset Reference Rates for SOL for periods prior to July 1, 2022. Since the token was added to the Fund’s portfolio, the Digital Asset Reference Rate for SOL has ranged from $8.37 to $254.78, with the straight average being $85.38 through December 31, 2022. The Manager has not observed a material difference between the Digital Asset Reference Rate for SOL and average prices from the constituent Digital Asset Exchanges included in the relevant index individually or as a group.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Reference Rate |
|
|
Date |
|
Digital Asset Reference Rate |
|
|
Date |
|
End of
period |
|
|
Last business day |
|
October 1, 2021 to December 31, 2021 |
|
$ |
193.72 |
|
|
$ |
254.78 |
|
|
11/6/2021 |
|
$ |
141.71 |
|
|
10/11/2021 |
|
$ |
168.22 |
|
|
$ |
168.22 |
|
Twelve months ended December 31, 2022 |
|
$ |
58.07 |
|
|
$ |
177.75 |
|
|
1/1/2022 |
|
$ |
8.37 |
|
|
12/29/2022 |
|
$ |
10.06 |
|
|
$ |
9.93 |
|
October 1, 2021 to December 31, 2022 |
|
$ |
85.38 |
|
|
$ |
254.78 |
|
|
11/6/2021 |
|
$ |
8.37 |
|
|
12/29/2022 |
|
$ |
10.06 |
|
|
$ |
9.93 |
|
The following table illustrates the movements in the Digital Asset Market price of SOL, as reported on the Fund’s principal market for SOL, from the addition of the token to the Fund’s portfolio on October 1, 2021 to December 31, 2022. Since the addition of the token to the Fund’s portfolio, the price of SOL has ranged from $8.29 to $254.44, with the straight average being $85.38 through December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Market Price |
|
|
Date |
|
Digital Asset Market Price |
|
|
Date |
|
End of
period |
|
|
Last business day |
|
October 1, 2021 to December 31, 2021 |
|
$ |
193.73 |
|
|
$ |
254.44 |
|
|
11/6/2021 |
|
$ |
141.68 |
|
|
10/11/2021 |
|
$ |
168.25 |
|
|
$ |
168.25 |
|
Twelve months ended December 31, 2022 |
|
$ |
58.07 |
|
|
$ |
177.75 |
|
|
1/1/2022 |
|
$ |
8.29 |
|
|
12/29/2022 |
|
$ |
10.09 |
|
|
$ |
9.86 |
|
October 1, 2021 to December 31, 2022 |
|
$ |
85.38 |
|
|
$ |
254.44 |
|
|
11/6/2021 |
|
$ |
8.29 |
|
|
12/29/2022 |
|
$ |
10.09 |
|
|
$ |
9.86 |
|
Avalanche
Effective April 5, 2022, the Manager adjusted the Fund’s portfolio in connection with its quarterly review by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase AVAX in accordance with the Target Coverage Ratio Methodology.
The following table illustrates the movements in the Digital Asset Reference Rate from the addition of the token to the Fund’s portfolio on April 5, 2022 to December 31, 2022. Prior to July 1, 2022, the Digital Asset Reference Rate for AVAX was an Old Indicative Price for AVAX. Effective July 1, 2022, the Digital Asset Reference Rate for AVAX is an Indicative Price for AVAX. As a result, the Digital Asset Rates for AVAX for periods subsequent to July 1, 2022 are not directly comparable to the Digital Asset Reference Rates for AVAX for periods prior to July 1, 2022. Since the token was added to the Fund’s portfolio, the Digital Asset Reference Rate for AVAX has ranged from $10.79 to $95.06, with the straight average being $26.13 through December 31, 2022. The Manager has not observed a material difference between the Digital Asset Reference Rate for AVAX and average prices from the constituent Digital Asset Exchanges included in the relevant index individually or as a group.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Reference Rate |
|
|
Date |
|
Digital Asset Reference Rate |
|
|
Date |
|
End of
period |
|
|
Last business day |
|
April 5, 2022 to December 31, 2022 |
|
$ |
26.13 |
|
|
$ |
95.06 |
|
|
4/5/2022 |
|
$ |
10.79 |
|
|
12/29/2022 |
|
$ |
10.98 |
|
|
$ |
10.87 |
|
33
The following table illustrates the movements in the Digital Asset Market price of AVAX, as reported on the Fund’s principal market for AVAX, from the addition of the token to the Fund’s portfolio on October 1, 2021 to December 31, 2022. Since the addition of the token to the Fund’s portfolio, the price of AVAX has ranged from $10.76 to $93.01, with the straight average being $25.98 through December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
Period |
|
Average |
|
|
Digital Asset Market Price |
|
|
Date |
|
Digital Asset Market Price |
|
|
Date |
|
End of
period |
|
|
Last business day |
|
April 5, 2022 to December 31, 2022 |
|
$ |
25.98 |
|
|
$ |
93.01 |
|
|
4/5/2022 |
|
$ |
10.76 |
|
|
12/29/2022 |
|
$ |
10.95 |
|
|
$ |
10.89 |
|
The following chart sets out the historical closing prices for the Shares as reported by OTCQX and the Fund’s Digital Asset Holdings per Share. Prior to July 1, 2022, the Digital Asset Holdings per Share was calculated based on the Fund Components held by the Fund pursuant to the Target Coverage Ratio Methodology and using Index Prices or Old Indicative Prices. Effective July 1, 2022 and for the six months ended December 31, 2022, the Digital Asset Holdings per Share is calculated based on the Fund Components held by the Fund pursuant to the DLCS Methodology and using Indicative Prices. As a result, the Digital Asset Holdings per Share for periods subsequent to July 1, 2022 are not directly comparable to the Digital Asset Holdings per Share in periods prior to July 1, 2022.
GDLC Premium/(Discount): GDLC Share Price vs. Digital Asset Holdings per Share ($)
34
The following chart sets out the historical premium and discount for the Shares as reported by OTCQX and the Fund’s Digital Asset Holdings per Share. Prior to July 1, 2022, the Digital Asset Holdings per Share was calculated based on the Fund Components held by the Fund pursuant to the Target Coverage Ratio Methodology and using Index Prices or Old Indicative Prices. Effective July 1, 2022 and for the six months ended December 31, 2022, the Digital Asset Holdings per Share is calculated based on the Fund Components held by the Fund pursuant to the DLCS Methodology and using Indicative Prices. As a result, the Digital Asset Holdings per Share for periods subsequent to July 1, 2022 are not directly comparable to the Digital Asset Holdings per Share in periods prior to July 1, 2022.
GDLC Premium/(Discount): GDLC Share Price vs. Digital Asset Holdings per Share (%)
35
