Company: HODL
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0000930413-25-000995
Chunk: 56

Company: VanEck Bitcoin ETF
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1
Chunk 56
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ly evolved over the past several years from individual users mining with computer processors, graphics processing units and
first-generation ASIC (application-specific integrated circuit) machines. New processing power is predominantly added to the Bitcoin
network currently by “professionalized” mining operations. Such operations may use proprietary hardware or sophisticated
ASIC machines acquired from ASIC manufacturers. Significant capital is necessary for mining operations to acquire this hardware,
lease operating space (often in data centers or warehousing facilities), afford electricity costs and employ technicians to operate
the mining farms. As a result, professionalized mining operations are of a greater scale than prior Bitcoin network validators
and have more defined, regular expenses and liabilities. In addition, mining operations may choose to immediately sell bitcoin
earned from their operations into the global bitcoin market. In past years, individual miners are believed to have been more likely
to hold newly mined bitcoin for more extended periods. The immediate selling of newly mined bitcoin would increase the supply
of bitcoin on the bitcoin market, creating downward pressure on the price of bitcoin.

33 

A professional mining operation operating
at a low profit margin may be more likely to sell a higher percentage of its newly mined bitcoin rapidly, and it may partially
or completely cease operations if its profit margin is negative. In a low profit margin environment, a higher percentage of the
new bitcoin mined each day will be sold into the bitcoin market more rapidly, thereby reducing bitcoin prices. The network effect
of reduced profit margins resulting in greater sales of newly mined bitcoin could result in a reduction in the price of bitcoin
that could adversely affect an investment in the Trust.

Congestion or delay in the Bitcoin network
may delay purchases or sales of bitcoin by the Trust.

The size of each block on the Bitcoin Blockchain
is currently limited, and is significantly below the level that centralized systems can provide. Increased transaction volume
could result in delays in the recording of transactions due to congestion in the Bitcoin network. Moreover, unforeseen system
failures, disruptions in operations, or poor connectivity may also result in delays in the recording of transactions on the Bitcoin
network. Any delay in the Bitcoin network could affect the Trust’s ability to buy or sell bitcoin at an advantageous price,
or may create the opportunity for a bad actor to double spend bitcoin, resulting in decreased confidence in the Bitcoin network.
Over the longer term, delays in confirming transactions could reduce the attractiveness to merchants and other commercial parties
as a means of payment. As a result, the Bitcoin network and the value of the Trust would be adversely affected.