Company: HODL
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0000930413-25-001795
Chunk: 5

Company: VanEck Bitcoin ETF
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 5
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 on the average cost method. Under ASC Topic 946, the average cost
method is an accepted method to determine realized gains and losses on the sale of bitcoin. Proceeds received by the Trust from
the issuance of baskets consist of bitcoin. Deposits of bitcoin are held by Gemini Trust Company, LLC (the “Bitcoin Custodian”)
and are also held at Coinbase Custody Trust Company, LLC (the “Additional Bitcoin Custodian”, and collectively the
“Bitcoin Custodians”), on behalf of the Trust until (i) delivered out in connection with redemptions of baskets or
cash or (ii) sold by the Sponsor, which may be facilitated by the Bitcoin Custodians, to pay fees due to the Sponsor and Trust
expenses and liabilities not assumed by the Sponsor.

 E. Calculation of Net Asset Value

The Trust’s net asset value (“NAV”) is calculated
based on the Trust’s net asset holdings as reconciled to the Bitcoin Custodians’ accounts on a market approach, determined
on a daily basis in accordance with the MarketVectorTM Bitcoin Benchmark Rate price at 4:00 pm EST. The Trust’s
NAV per Share is calculated by

6

VANECK BITCOIN ETF

Notes to Unaudited Financial Statements (continued)

March 31, 2025

taking the current market value of its total assets, subtracting
any liabilities, and then dividing that total by the total number of outstanding Shares. The Trust Agreement gives the Sponsor
the exclusive authority to determine the Trust’s NAV and the Trust’s NAV per Share, which it has delegated to the Administrator.

  F. Federal Income Taxes

The Trust is treated as a grantor trust for federal income tax
purposes and, therefore, no provision for federal income taxes is required. Any interest, expenses, gains and losses are passed
through to the holders of Shares of the Trust. The Sponsor has reviewed the tax positions for the period presented and has determined
that no provision for income tax is required in the Trust’s financial statements.

 G. Segment Reporting

The Sponsor acts as the Trust’s chief operating decision
maker (“CODM”), assessing performance and making decisions about resource allocation. The CODM has determined that
the Trust has a single operating segment based on the fact that the Trust’s long-term strategic asset allocation is pre-determined
in accordance with the terms of its prospectus, with a defined investment strategy which is executed by the Sponsor.

 H. Interim financial statements

The financial statements included