Company: ABTC
Filing Date: 2025-07-22
Form Type: S-4/A
Source: 0001213900-25-066299
Chunk: 108

Company: American Bitcoin Corp.
Filing Date: 2025-07-22
Form: S-4/A
Chunk 108
---
 time, ABTC may enter into certain hedging transactions to mitigate ABTC’s exposure to the market price of Bitcoin. Engaging in hedging transactions may expose ABTC to risks associated with such transactions, including counterparty risk. Hedging against a decline in the values of portfolio investments caused by volatile Bitcoin market prices does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions decline for other reasons. Such hedging transactions may also limit the opportunity for gain if the values of the portfolio investments should increase. Moreover, it may not be possible to hedge against a particular fluctuation that is so generally anticipated by the markets that a hedging transaction at an acceptable price is unavailable. In light of these and other factors, ABTC may not be successful in mitigating ABTC’s exposure to volatile Bitcoin prices through any hedging transactions it undertakes. The Bitcoin reward for successfully uncovering a block will halve several times in the future and Bitcoin’s value may not adjust to compensate ABTC for the reduction in the rewards it receives from its mining efforts. Halving is a process incorporated into many proof -of-workconsensus algorithms that reduces the coin reward paid to Bitcoin miners over time according to a pre -determinedschedule. This reduction in reward spreads out the release of digital assets over a long period of time resulting in an ever smaller number of coins being mined. At a predetermined block, the mining reward is cut in half, hence the term “halving.” For example, the mining reward for Bitcoin declined from 6.25 to 3.125 Bitcoin on April 19, 2024. This process is scheduled to occur once every 210,000 blocks, until the total amount of Bitcoin rewards issued reaches 21 million. As the number of Bitcoin awarded for solving a block in a blockchain decreases, ABTC’s ability to achieve profitability becomes more difficult. While the Bitcoin price has had a history of price fluctuations around the halving of its rewards, there is no guarantee that in future periods when a halving occurs the price change will be favorable or would compensate for the reduction in mining reward. If a corresponding and proportionate increase in the trading price of Bitcoin or a proportionate decrease in mining difficulty does not follow these anticipated halving events, the revenue ABTC earns from its Bitcoin mining operations would see a corresponding decrease, which would have a material adverse effect on ABTC’s business, financial condition and results of operations. If the award of Bitcoin rewards for solving blocks and transaction fees