Company: HODL
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0000930413-25-000995
Chunk: 212

Company: VanEck Bitcoin ETF
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1A
Chunk 212
---
 permit an exchange to adopt listing rules
for a product if it is not clear that the exchange’s members would be able to comply with applicable rules when transacting
in the product as designed. To the extent further regulatory clarity emerges, the Sponsor expects the Exchange to seek In-Kind
Regulatory Approval to amend its listing rules to permit the Trust to create and redeem Shares in-kind for bitcoin, in which Authorized
Participants or their designees would deposit bitcoin directly with the Trust or receive bitcoin directly from the Trust. However,
there can be no assurance as to when such regulatory clarity will emerge, or when the Exchange will seek or obtain In-Kind Regulatory
Approval, if at all.

To the knowledge of the Sponsor, exchange-traded products
for all spot-market commodities other than bitcoin, such as gold and silver, employ in-kind creations and redemptions with the
underlying asset. The Sponsor believes that it is generally more efficient, and therefore less costly, for spot commodity exchange-traded
products to utilize in-kind orders rather than cash orders, because there are fewer steps in the process and therefore there is
less operational risk involved when an authorized participant can manage the buying and selling of the underlying asset itself,
rather than depend on an unaffiliated party such as the issuer or sponsor of the exchange-traded product. As such, a spot commodity
exchange-traded product that only employs cash creations and redemptions and does not permit in-kind creations and redemptions
is a novel product that has not been tested, and could be impacted by any resulting operational inefficiencies.

In particular, the Trust’s inability to facilitate
in-kind creations and redemptions could result in the exchange-traded product arbitrage mechanism failing to function as efficiently
as it otherwise would, leading to the potential for the Shares to trade at premiums or discounts to the NAV per Share, and such
premiums or discounts could be substantial. Furthermore, if cash orders are unavailable, either due to the Sponsor’s decision
to reject or suspend such orders or otherwise, it will not be possible for Authorized Participants to redeem or create Shares,
in which case the arbitrage mechanism would be unavailable. This could result in impaired liquidity for the Shares, wider bid/ask
spreads in secondary trading of the Shares and greater costs to investors and other market participants. In addition, the Trust’s
inability to facilitate in-kind creations and redemptions, and resulting reliance on cash creations and redemptions, could cause
the Sponsor to halt or