Company: HODL
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0000930413-25-000995
Chunk: 184

Company: VanEck Bitcoin ETF
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1A
Chunk 184
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 of new bitcoin may cause the price
of bitcoin to decline, which could negatively affect an investment in the Trust.

Newly created bitcoin are generated through
a process referred to as “mining.” If entities engaged in bitcoin mining choose not to hold the newly mined bitcoin,
and, instead, make them available for sale, there can be downward pressure on the price of bitcoin. A bitcoin mining operation
may be more likely to sell a higher percentage of its newly created bitcoin, and more rapidly so, if it is operating at a low
profit margin, including due to an increase in electricity costs or a decline in the market price or amount of bitcoin issued
as a mining reward, or if mining operations are unable to arrange alternative sources of financing (e.g., if lenders refuse to
make loans to such miners), thus reducing the price of bitcoin. Lower bitcoin prices may result in further tightening of profit
margins for miners and decreasing profitability, thereby potentially causing even further selling pressure. Diminishing profit
margins and increasing sales of newly mined bitcoin could result in a reduction in the price of bitcoin, which could adversely
impact an investment in the Shares.

Operational cost may exceed the award
for solving blocks or transaction fees. Increased transaction fees may adversely affect the usage of the Bitcoin network.

The Bitcoin network is designed to periodically
reduce the fixed award given to miners for solving new blocks (the “block reward”), most recently in April 2024, when
the block reward reduced from 6.25 to 3.125 bitcoin. Under the source code that governs the Bitcoin network, the supply of new
bitcoin is mathematically controlled so that the number of bitcoin grows at a limited rate pursuant to a pre-set schedule. The
block reward is automatically halved after every 210,000 blocks are added to the Bitcoin blockchain, approximately every 4 years.
As noted above, currently the block reward is 3.125 bitcoin per block. This deliberately controlled rate of bitcoin creation means
that the number of bitcoin in existence will increase at a controlled rate until the number of bitcoin in existence reaches the
pre-determined 21 million bitcoin. As of December 31, 2024, approximately 19.8 million bitcoins were outstanding and the date
when the 21 million bitcoin limitation will be reached is estimated to be the year 2140.

As the block reward continues to decrease
over time, the mining incentive structure may transition to a higher reliance on transaction confirmation fees in order to incentivize