Company: HODL
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0000930413-25-000995
Chunk: 125

Company: VanEck Bitcoin ETF
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1
Chunk 125
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 Bitcoin network might be required,
and a loss of public confidence in the Bitcoin network could result. Alternatively, bitcoin could face obstacles to use or in
the United Kingdom, which could reduce adoption. Courts in other jurisdictions could take similar positions. These or other possible
outcomes could lead to a decrease in the value of bitcoin, which could negatively impact the value of the Shares.

Tax Risk

The treatment of the Trust for U.S. federal income
tax purposes is uncertain.

The Sponsor intends to take the position that the Trust
is properly treated as a grantor trust for U.S. federal income tax purposes. Assuming that the Trust is a grantor trust, the Trust
will not be subject to U.S. federal income tax. Rather, if the Trust is a grantor trust, each beneficial owner of Shares will
be treated as directly owning its pro rata share of the Trust’s assets and a pro rata portion of the Trust’s income,
gain, losses and deductions will “flow through” to each beneficial owner of Shares.

The Trust may take certain positions with respect to
the tax consequences of Incidental Rights and IR Virtual Currency. If the IRS were to disagree with, and successfully challenge,
any of these positions, the Trust might not qualify as a grantor trust. In addition, the Sponsor has committed to cause the Trust
to irrevocably abandon any Incidental Rights and IR Virtual Currency to which the Trust may become entitled in the future. However,
there can be no assurance that these abandonments would be treated as effective for U.S. federal income tax purposes, or that
the Sponsor will continue to cause the Trust to irrevocably abandon any Incidental Rights and IR Virtual Currency if there are
future regulatory developments that would make it feasible for the Trust to retain those assets. If the Trust were treated as
owning any asset other than bitcoins as of any date on which it creates or redeems Shares, it may likely cease to qualify as a
grantor trust for U.S. federal income tax purposes.

Because of the evolving nature of digital currencies,
it is not possible to predict potential future developments that may arise with respect to digital currencies, including forks,
airdrops and other similar occurrences. Assuming that the Trust is currently a grantor trust for U.S. federal income tax purposes,
certain future developments could render it impossible, or impracticable, for the Trust to continue to be treated as a grantor
trust for such purposes.

69

If the Trust is not properly