Company: HODL
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0000930413-25-000995
Chunk: 210

Company: VanEck Bitcoin ETF
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1A
Chunk 210
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 from NAV. Furthermore, in the event that the market for
bitcoin should become relatively illiquid and thereby materially restrict opportunities for arbitraging, the price of Shares may
diverge from the value of bitcoin.

In addition, the use of cash creations and redemptions,
as opposed to in-kind creations and redemptions, creates transaction costs of buying and selling bitcoin that are not present
in an in-kind model. These costs include the bid-ask spread along with the operational costs from the labor and overhead involved
in calculating, executing, monitoring, and accounting for transactions in the bitcoin markets and related cash movements. Furthermore,
there are timing costs involved in the risk that the bitcoin price moves between the time when the NAV is established for a creation/redemption
and the time when the bitcoin is traded (“slippage”). In addition, Liquidity Providers must settle bitcoin transactions
with the Trust within a contractually specified time period, subject to customary exceptions. If the Liquidity Provider fails
to perform its obligations within the contractually specified time period, the Trust would seek to use an alternate Liquidity
Provider to execute the bitcoin transaction. However, the pricing or terms of the ultimate bitcoin transaction conducted through
the alternate Liquidity Provider, if one is available, after the failure of the original Liquidity Provider to perform its obligations
could deviate, potentially significantly, from the pricing or terms of the transaction that the Trust originally entered with
the original Liquidity Provider. Transaction costs and slippage would be reduced if the Trust were permitted to use an in-kind
creation and redemption model. The Trust’s Authorized Participant Agreement provides that transaction costs and slippage
related to Basket creation and redemption are the responsibility of the Authorized Participant. Whether Authorized Participants
and Liquidity Providers as market participants will find it economically viable or commercially attractive to participate in a
cash creation and redemption model for a bitcoin exchange-traded product like the Trust, including a cash creation and redemption
model where the Trust selects the Liquidity Provider with whom it executes transactions to buy or sell bitcoin and the Authorized
Participant is not permitted to designate the Liquidity Provider from whom bitcoin is purchased or sold in connection with the
Authorized Participant’s Basket subscription or redemption, is not known; however, there is a risk they will not. If the
Trust is unable to attract sufficient Authorized Participants and Liquidity Providers, it will be unable to maintain an efficient
arbitrage mechanism for keeping the trading price of the Shares in line with NAV and the value of