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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fall or otherwise diverge from NAV. If the arbitrage mechanism is not effective, purchases or sales of Shares on the secondary market could occur at a premium or discount to NAV, which could harm Shareholders by causing them buy Shares at a price higher than the value of the underlying portfolio holdings held by the Fund or sell Shares at a price lower than the value of the underlying portfolio holdings held by the Fund, causing Shareholders to suffer losses. Even with regulatory approval for in-kind transactions, the Fund may not be able to successfully implement in-kind creation and redemption transactions, which could put the Fund at a disadvantage compared to other crypto asset ETPs that are able to implement in-kind creations and redemptions. The Fund may experience a loss if it is required to sell cash equivalents at a price lower than the price at which they were acquired

If the Fund is required to sell its
cash equivalents at a price lower than the price at which they were acquired, the Fund will experience a loss. This loss may adversely
impact the price of the Shares and may decrease the correlation between the price of the Shares and the spot price of the Eligible Assets.
The value of cash equivalents held by the Fund generally moves inversely with movements in interest rates. The prices of longer maturity
securities are subject to greater market fluctuations as a result of changes in interest rates. While the short-term nature of the Fund’s
investments in cash equivalents should minimize the interest rate risk to which the Fund is subject, it is possible that the cash equivalents
held by the Fund will decline in value.

Risks Related to Lack of Liquidity

Certain of the Fund’s investments
could become illiquid, which could cause large losses to investors

The Fund’s holdings may be more
difficult to liquidate at favorable prices in periods of illiquid markets and losses may be incurred during the period in which positions
are being liquidated. If the Fund’s ability to obtain exposure to the Eligible Assets in accordance with its investment objective
is disrupted for any reason including, because of limited liquidity in crypto asset markets, or a disruption in the crypto asset markets,
the Fund may not be able to achieve its investment objective and may experience significant losses. Any disruption in the Fund’s
ability to obtain exposure to the Eligible Assets may negatively impact the Fund’s performance.

A market disruption,
such as a government taking regulatory or other actions that disrupt the crypto asset market, can also make it difficult to
liquidate a position. Unexpected market illiquidity may cause major losses to investors at any time or from time to time. In
addition, the Fund does not intend at this time to establish a credit facility, which would provide an additional source of
liquidity, but instead will rely only on the cash and cash equivalents that it holds to meet its liquidity needs. The anticipated
value of the positions in the Eligible Assets that the Sponsor will acquire or enter into for the Fund increases the liquidity
risk.

Buying and selling activity associated
with the purchase and redemption may adversely affect an investment in the Shares

The Sponsor’s purchase of assets
in connection with basket creation orders may cause the price of the Eligible Assets to increase, which will result in higher prices for
the Shares. Increases in the Eligible Assets’ prices may also occur as a result of purchases by other market participants who attempt
to benefit from an increase in the market price of crypto assets when baskets are created. The market price of Eligible Assets may therefore
decline immediately after baskets are created.

Selling activity associated with sales
of assets by the Sponsor in connection with redemption orders may decrease the Eligible Assets’ prices, which will result in lower
prices for the Shares. Decreases in the Eligible Assets’ prices may also occur as a result of selling activity by other market participants.

In addition to the effect that purchases
and sales of the Eligible Assets by the Sponsor and other market participants may have on the price of the Eligible Assets, other exchange-traded
products or large private investment vehicles with similar investment vehicles (if developed) could represent a substantial portion of
demand for the Eligible Assets at any given time and the sales and purchases by such investments may impact the price of the Eligible
Assets. If the price of the Eligible Assets declines, the trading price of the Shares will generally also decline.

The inability of Authorized Participants
and market makers to hedge their crypto exposure may adversely affect the liquidity of Shares and the value of an investment in the Shares

Authorized Participants and market
makers will generally want to hedge their exposure in connection with basket creation and redemption orders. To the extent Authorized
Participants and market makers are unable to hedge their exposure due to market conditions (e.g., insufficient liquidity in the market,
inability to locate an appropriate hedge counterparty, extreme volatility in the price of the Eligible Assets, wide spreads between prices
quotes on different crypto platforms, etc.), such conditions may make it difficult to create or redeem Baskets or cause them to not create
or redeem Baskets. In addition, the hedging mechanisms employed by Authorized Participants and market makers to hedge their exposure to
the Eligible Assets may not function as intended, which may make it more difficult for them to enter into such transactions. Such events
could negatively impact the market price of Shares and the spread at which Shares trade on the open market. To the extent Authorized Participants
wish to use futures to hedge their exposure, note that while growing in recent years, the market for exchange-traded crypto futures contracts
has a limited trading history and operational experience and may be less liquid, more volatile and more vulnerable to economic, market
and industry changes than more established futures markets. The liquidity of the market will depend on, among other things, the adoption
of crypto assets and the commercial and speculative interest in the market.

Arbitrage transactions intended
to keep the price of Shares closely linked to the price of the Eligible Assets may be problematic if the process for the creation and
redemption of Baskets encounters difficulties, which may adversely affect an investment in the Shares

If the processes of creation and redemption
of the Shares encounter any unanticipated difficulties, potential market participants who would otherwise be willing to purchase or redeem
baskets to take advantage of any arbitrage opportunity arising from discrepancies between the price of the Shares and the price of the
underlying assets may not take the risk that, as a result of those difficulties, they may not be able to realize the profit they expect.
If this is the case, the liquidity of Shares may decline, and the price of the Shares may fluctuate independently of the price of the
Eligible Assets and may fall.

Examples of such unanticipated difficulties
in the creation and redemption process might include, but are not limited to, operational failures such as technological malfunctions
in the trade execution or settlement systems, delays or inaccuracies in data feeds, or disruptions in the communication channels used
to transmit creation and redemption orders. Regulatory changes or legal challenges could also impose unforeseen hurdles, potentially leading
to delays or restrictions in the processing of creation and redemption orders. Furthermore, liquidity issues in the crypto asset market
itself could impede the ability to acquire or dispose of the Eligible Assets efficiently, thereby affecting the creation and redemption
of baskets.

The liquidity of the Shares may
be adversely affected by changes in participation by Authorized Participants, market makers, or minimum share levels

The liquidity and market price of the
Shares depend significantly on the continued participation of Authorized Participants, market makers, and other key secondary-market participants.
Only Authorized Participants may engage in direct creation or redemption transactions with the Fund, and the Fund has a limited number
of such institutions. If one or more Authorized Participants or major market makers withdraw, become unable to process orders, or cease
activities, the Fund may experience trading halts, increased bid/ask spreads, or Shares trading at a discount to NAV, potentially leading
to limited liquidity or even delisting.

Additionally, there may be instances
where an Authorized Participant is unable to proceed with or complete a redemption order, particularly during periods of market disruption,
exchange suspensions, or emergencies. In such cases, declining asset values may result in reduced cash distributions or a loss to Authorized
Participants, which can further decrease secondary market liquidity. During these periods, fewer buyers may be available and overall trading
in Shares may decline.