SEC Filing Document

Company: T. Rowe Price Active Crypto ETF
Ticker: 
CIK: 2089855
Filing Type: S-1
Document Type: S-1
Date Filed: 2025-10-22
Accession Number: 0001999371-25-015832
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2089855/000199937125015832/activecrypto-s1_102225.htm

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identified by a block height as if they were progressively piled up starting from a height of zero. The first block of the Bitcoin Blockchain is known as the Genesis block, assigned a height of 0 (zero), and was created on January 3, 2009. Whilst in traditional financial ledgers, a central authority is responsible for updating users’ balances and preventing the same balance to be spent twice, the Bitcoin System introduces a cost for network participants to add new blocks of transactions to the Bitcoin Blockchain. This consists of creating a proof-of-work by solving a highly costly cryptographic problem by trial and error and broadcasting the obtained solution to other network participants for verification. A key feature of proof-of-work is its asymmetry: the proof generator needs to expend large amounts of computational power to generate it, whereas others can easily verify that the proof is valid at a negligible cost.

The solution to the
proof-of-work problem creates a cryptographic hash that sets a unique identifier for every block and includes an imprint of all the
transactions included in the block as well as the identifier of the block’s immediate predecessor. This generates a strong
cryptographic tie among the blocks in the Bitcoin Blockchain and implies that rebuilding the transaction history from a height
smaller than or equal to the current one would demand regenerating all the cumulative proof-of-work from that point until the
current block. Given the necessary computational cost, the bigger the pile of blocks stacked above a specific block, the smaller the
likelihood for the information included in it to be changed, effectively making it immutable after enough proof-of-work is generated
on top of it. At any height, if two diverging versions of the Bitcoin Blockchain exist, a bifurcation referred to as a blockchain
fork, the consensual version of the Bitcoin Blockchain is defined as the chain with the largest cumulative proof-of-work,
establishing Bitcoin’s so-called fork choice rule. These rules establish a mechanism for the Bitcoin Blockchain to be appended
over time and for the Bitcoin Network to reach consensus on bitcoin ownership and transaction history. Therefore, proof-of-work is
generally referred to as the consensus mechanism of the Bitcoin System.

The built-in incentive element of the
Bitcoin System is bitcoin, which is issued over time as a subsidy that rewards network participants responsible for generating proof-of-work
and, thus, adding new blocks to the Bitcoin Blockchain. Since they invest in computational equipment and expend electricity in exchange
for newly-issued coins, there exists a clear similarity between this activity and the mining of precious metals such as gold or silver.
The creation of proof-of-work is thus popularly referred to as bitcoin mining, and network participants engaging in the activity are called
bitcoin miners. Users of the Bitcoin Network might also pay transaction fees in bitcoin to gain priority over others in having their transactions
included in a new block. The fees paid by all transactions in a mined block are reverted to the successful miner alongside the mining
subsidy.

To make sure that the creation of blocks
and thus the issuance of new bitcoin occur on average every 10 minutes, the Bitcoin System has a built-in difficulty adjustment that tunes
the cost of generating a valid proof-of-work every interval of 2,016 blocks — approximately every two weeks — starting from
the Genesis block. If some miners get more specialized and are able to mine blocks faster than 10 minutes on average, the difficulty is
increased when the next cycle of 2,016 blocks starts. On the other hand, if some miners have to shut down operations and blocks start
being appended to the blockchain with an average interval exceeding 10 minutes, difficulty is decreased as of the beginning of the next
cycle of 2,016 blocks. The computational power of a miner is measured by its capacity to compute cryptographic hashes in the attempt to
generate a valid proof-of-work. The collective computational power of the Bitcoin Network is known as the network’s hash rate.

Bitcoin
Supply

The value of bitcoin depends on its
supply (which is limited) as well as its demand across its trading venues. The supply of bitcoin follows a predefined issuance schedule
since Bitcoin’s conception. After every multiple of 210,000 blocks, the issuance of bitcoin per block is reduced in half. These
events are referred to as “halvings.” Bitcoin’s mining subsidy started at 50 bitcoin per mined block and remained
constant until the first halving in November 2012 (at 210,000 blocks), dropping the mining subsidy to 25 bitcoin. The second
halving occurred in July 2016 (at 420,000 blocks), dropping the subsidy per block to 12.5 bitcoin. The third halving took
place in May 2020 (at 630,000 blocks), dropping the subsidy per block to 6.25 bitcoin. The fourth happened in April 2024
(at 840,000), dropping the subsidy per block to 3.125 bitcoin which will persist until height 1,049,999.

By design, the supply of bitcoin is
intentionally limited to 21 million units, making bitcoin a disinflationary asset, that is, with a rate of supply growth that decreases
over time until reaching zero when the last satoshi is mined. The maximum cap and the disinflationary nature of bitcoin makes it a potential
candidate for digital store of value, an investment thesis that is still gaining traction among investors worldwide. As of October 2025,
there are approximately 19.93 million bitcoins in circulation.

Bitcoin
Network, Protocol, Clients and Network Upgrades

Bitcoin is maintained on the decentralized,
open source, peer-to-peer computer network, the Bitcoin Network. No single entity owns or operates the Bitcoin Network. The Bitcoin Network
is accessed through software and governs bitcoin’s creation and movement. The source code for the Bitcoin Network, often referred
to as the Bitcoin Protocol, is open-source, and anyone can contribute to its development.

Proof-of-work, the fork choice rule,
the difficulty adjustment and the supply schedule of bitcoin comprise the Bitcoin Protocol, the full set rules that users of the Bitcoin
System must agree on in order to participate in the Bitcoin Network. Implementations of the Bitcoin Protocol are called “Bitcoin
Clients.” These are open-source codes that can be maintained by anyone and used by any individual wishing to join the Bitcoin Network.
Every computer running an instance of a Bitcoin Client is called a node.

The infrastructure of the Bitcoin Network
is collectively maintained by its participants, which include miners, developers, and users. Miners register transactions and provide
security to the Bitcoin Network. Developers maintain and contribute updates to the Bitcoin Clients. Users access the Bitcoin Network either
running their own node or communicating with the node run by a third-party server. Anyone can be a user, developer, or miner, but not
all Bitcoin Network participants need to run a node.

Bitcoin is “stored” on
a digital transaction ledger commonly known as a “blockchain.” A blockchain is a distributed database that is continuously
updated and reconciled among certain users and is protected by cryptography. The bitcoin blockchain contains a complete record and history
for each bitcoin transaction.

New bitcoins are created through a
process called “mining.” Miners use specialized computer software and hardware to solve a highly complex mathematical problem
presented by the Bitcoin Protocol. The first miner to successfully solve the problem is permitted to add a block of transactions to the
bitcoin blockchain. The new block is then confirmed through acceptance by a majority of users who maintain versions of the blockchain
on their individual computers. Miners that successfully add a block to the bitcoin blockchain are automatically rewarded with a fixed
amount of bitcoin for their effort plus any transaction fees paid by transferors whose transactions are recorded in the block. This reward
system is how new bitcoin enters circulation and is the mechanism by which versions of the blockchain held by users on a decentralized
network are kept in consensus.

The Bitcoin Protocol is thus an open-source
project with no official company or group in control, and anyone can review the underlying code for its clients. There are, however, a
number of individual developers that regularly contribute to a specific Bitcoin Client known as the “bitcoin core” (Bitcoin
Core). Developers of the Bitcoin Core loosely oversee the development of the source code. There are many other compatible versions of
the Bitcoin Protocol, but Bitcoin Core is the most widely adopted and currently provides the de facto standard for the Bitcoin Protocol.
Bitcoin Core developers are able to access, and can alter, the client’s source code and, as a result, they are responsible for quasi-official
releases of updates and other changes to the Bitcoin Core. Upgrade proposals to the Bitcoin protocol can be created by any individual
as a Bitcoin Improvement Proposal (BIP).