Company: HBAR
Filing Date: 2025-09-09
Form Type: S-1
Source: 0000950170-25-113803
Chunk: 63

Company: Grayscale Hedera Trust ETF
Filing Date: 2025-09-09
Form: S-1
Chunk 63
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 than the Shares, including through direct investments in HBAR and other financial vehicles, including securities backed by or linked to HBAR and digital asset financial vehicles similar to the Trust. In particular, the Trust and the Sponsor face competition with respect to the creation of competing exchange-traded spot HBAR products, among other digital asset vehicles, several of which have applications pending before the SEC or that have already received SEC approval. Whether the Trust is successful in maintaining its scale and achieving its intended competitive position may be impacted by a range of factors, including the Trust’s timing in entering the market relative to competing spot HBAR exchange-traded products and its fee structure relative to those competing products. The Trust’s competitors may offer a more liquid secondary market for their shares, and/or may charge a substantially lower fee than the Sponsor’s Fee or expense ratio now or in the future. If the Trust fails to continue to maintain or grow sufficient scale due to competition, the Sponsor may have difficulty raising sufficient revenue to cover the costs associated with maintaining the Trust and such shortfalls could impact the Sponsor’s ability to properly invest in robust ongoing operations and controls of the Trust to minimize the risk of operating events, errors, or other forms of losses to the shareholders. Furthermore, the Trust may fail to continue to attract adequate liquidity in the secondary market due to such competition, resulting in a small number of Authorized Participants willing to make a market in the Shares, which in turn could result in the Shares trading at a significant premium or discount for extended periods. Likewise, market and financial conditions,

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and other conditions beyond the Sponsor’s control, may make it more attractive to gain exposure to HBAR through other vehicles, rather than the Trust.

In addition, to the extent digital asset financial vehicles other than the Trust tracking the price of HBAR are formed and represent a significant proportion of the demand for HBAR, large purchases or redemptions of the securities of these digital asset financial vehicles, or private funds holding HBAR, could negatively affect the Index Price, the NAV, the NAV per Share, the value of the Shares, the Principal Market NAV and the Principal Market NAV per Share. Accordingly, there can be no assurance that the Trust will be able to maintain its scale and achieve its intended competitive positioning relative to competitors, which could adversely affect the performance of the Trust and the value of the Shares.

Congestion or delay in the Hedera Network may delay purchases or sales of HBAR by the Trust.

Increased transaction volume could result in delays in the