Company: HODL
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0000930413-25-000995
Chunk: 34

Company: VanEck Bitcoin ETF
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1
Chunk 34
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 basis for the portion of its pro rata share of the bitcoin held in the Trust that is sold to fund the redemption, as determined
in the manner described in the paragraph that is two paragraphs above this one. A redemption of some or all of a Shareholder’s
Shares in exchange for the cash received from such sale is not expected to be treated as a separate taxable event to the Shareholder.

An in-kind redemption of some or all of a Shareholder’s Shares
in exchange for the underlying bitcoin represented by the Shares redeemed generally will not be a taxable event to the Shareholder.
The Shareholder’s tax basis for the bitcoin received in the in-kind redemption generally will be the same as the Shareholder’s
tax basis for the portion of its pro rata share of the bitcoin held in the Trust immediately prior to the in-kind redemption that
is attributable to the Shares redeemed. The Shareholder’s holding period with respect to the bitcoin received should include
the period during which the Shareholder held the Shares redeemed in kind. A subsequent sale of the bitcoin received by the Shareholder
will be a taxable event, unless a nonrecognition provision of the Code applies to such sale.

After any sale or redemption of less than all of a Shareholder’s
Shares, the Shareholder’s tax basis for its pro rata share of the bitcoin held in the Trust immediately after such sale or
redemption generally will be equal to its tax basis for its share of the total amount of the bitcoin held in the Trust immediately
prior to the sale or redemption, less the portion of such basis which is taken into account in determining the amount of gain or
loss recognized by the Shareholder upon such sale or, in the case of a redemption, that is treated as the basis of the bitcoin
received by the Shareholder in the redemption.

If a hard fork occurs in the Bitcoin Blockchain, the Trust could
hold both the original bitcoin and the alternative new asset. The IRS has held that a hard fork resulting in the creation of new
units of cryptocurrency is a taxable event giving rise to ordinary income. Moreover, the Trust Agreement requires that, if such
a transaction occurs, the Trust will as soon as possible, and subject to the Custody Agreement, direct the Bitcoin Custodian to
distribute the alternative new asset in-kind to the Sponsor, as

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agent for the Shareholders, and the Sponsor will arrange to sell
the new alternative asset and for the proceeds to be distributed to the Shareholders. The receipt, distribution