SEC Filing Document

Company: T. Rowe Price Active Crypto ETF
Ticker: 
CIK: 2089855
Filing Type: S-1/A
Document Type: S-1/A
Date Filed: 2026-03-16
Accession Number: 0001999371-26-005896
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2089855/000199937126005896/active-s1a_031626.htm

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Word Count: 1312
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Lightning Network. Similar to the adoption of the Lightning Network, inscriptions and Taproot Assets are still experimental technologies and might be subject to significant risks. Bitcoin wallets and transactions Users of the Bitcoin Network must either run a Bitcoin Client or use a Bitcoin wallet. To initiate a Bitcoin transaction, users generate one or more unique pairs of private and public keys, the latter being used to receive funds, and the former to authenticate transactions and send bitcoin. These pairs can be hierarchically derived from a single set of words known as a seed phrase. As their names suggest, public keys can be safely shared with anyone in the network, whereas private keys should be kept secret. This is analogous to the use of a bank account, with a public key similar to the bank identifier and branch number, and the private key the analogue to the account’s transaction password.

A private-public key pair is
generated using asymmetric cryptographic, meaning that deriving a public key from its corresponding private key is easy, whereas
guessing a private key from a known public key is virtually impossible. The generation of the pair and the signing of transactions
is securely carried out using a device disconnected from the internet, maintaining the secrecy of the private key and the custody
of bitcoins in a so-called cold wallet. If a private key is at least once exposed to the internet, it turns the corresponding wallet
into a so-called hot wallet, exposing the user to the risk of theft of funds by a malicious actor that might gain access to the
device during the time of internet exposure. Therefore, security and ownership of bitcoins rely heavily on the proper management
of private keys, as these keys are the only way to authorize transactions. This property guarantees the possibility of secure custody
of bitcoins without counterparty risk and the ability for a user to be the only network participant knowing the private key to
its wallet. On the other hand, losing a private key means losing access to the associated funds permanently, similar to a bearer
asset like cash, and exposing it to the internet creates the risk of a malicious actor becoming able to drain funds from the wallet.

Bitcoin Markets

In the Bitcoin market, participants
range from individual end-users who utilize bitcoin for peer-to-peer transactions, to merchants who accept bitcoin as payment for
goods and services. Despite its potential, bitcoin has not yet achieved widespread adoption as a mainstream payment method. Investors
also represent a significant portion of market participants, purchasing bitcoin as a speculative asset or as part of a diversified
investment portfolio. These transactions occur both on bitcoin spot markets and over-the-counter (OTC) markets, with the former
being more accessible to retail investors and the latter catering to institutional entities handling large volumes of bitcoin.

In addition to using bitcoin
to purchase goods and services, investors may purchase and sell bitcoin to speculate as to the value of bitcoin in the bitcoin
market, or as a long-term investment to diversify their portfolio. The value of bitcoin within the market is determined, in part,
by the supply of and demand for bitcoin in the global bitcoin market, market expectations for the adoption of bitcoin as a store
of value, the number of merchants that accept bitcoin as a form of payment, and the volume of peer-to-peer transactions, among
other factors.

Bitcoin spot markets typically
permit investors to open accounts with the market and then purchase and sell bitcoin via websites or through mobile applications
on a prefunded basis. Prices for trades on bitcoin spot markets are typically reported publicly. An investor opening a trading
account must deposit an accepted government-issued currency into their account with the spot market, or a previously acquired crypto
asset, before they can purchase or sell assets on the spot market. The process of establishing an account with a bitcoin market
and trading bitcoin is different from, and should not be confused with, the process of users sending bitcoin from one bitcoin address
to another bitcoin address on the Bitcoin Blockchain. This latter process is an activity that occurs on the Bitcoin Network, while
the former is an activity that occurs entirely within the order book operated by the spot market. The spot market typically records
the investor’s ownership of bitcoin in its internal books and records, rather than on the Bitcoin Blockchain. The spot market
ordinarily does not transfer bitcoin to the investor on the Bitcoin Blockchain unless the investor makes a request to the exchange
to withdraw the bitcoin in his or her exchange account to an off-exchange bitcoin wallet.

In addition, bitcoin futures
and options trading occur on exchanges in the U.S. regulated by the CFTC. The market for CFTC-regulated trading of bitcoin derivatives
has developed substantially.

Although bitcoin was the first
crypto asset, in the ensuing years, the number of other crypto assets (such as ether), market participants and companies in the
space has increased significantly. The category and protocols are still being defined and evolving.

Bitcoin has generally exhibited
high price volatility relative to more traditional asset classes. One volatility measure, standard deviation, is based on the variability
of historical price returns. A higher standard deviation indicates a wider dispersion of past price returns and thus greater historical
volatility.

Ether (ETH)

Ethereum is an entire system,
responsible for maintaining the ledger of ether ownership and enabling the transfer of ether among parties, as well as the components
of the Ethereum system such as the Ethereum Network, the Ethereum Blockchain, the Ethereum Protocol and the Ethereum Clients (together,
the “Ethereum System”). The native crypto asset to the Ethereum Network is ether.

Ethereum is a permissionless,
decentralized and peer-to-peer computer network of nodes that enables developers to build and deploy the so-called smart contracts
and decentralized apps (dApps) on a global scale. The Ethereum Network improves on the capabilities of the Bitcoin Network by allowing,
in addition to simple ether transfers, the creation of the smart contracts (software that are automatically executed when predetermined
terms and conditions are met). Smart contracts permit the creation of crypto assets with various properties and the deployment
of decentralized applications on Ethereum.

Ether, the native crypto asset
of the Ethereum Network, serves as a unit of account, allowing for peer-to-peer transactions and incentivizing network participants.
Every ether is fractionable to the eighteenth decimal place, with its smallest fraction equal to 0.000000000000000001 ether and
called a wei.

The computational environment
of the Ethereum Network is known as the Ethereum Virtual Machine (EVM), and computational cycles in the EVM consume so-called gas
units which are denominated in fractions of ether and expressed in Gwei (short for “gigawei” or one billion wei or
one billionth of one ether). The EVM is similar to an engine, while ether is the fuel that propels it. Ether is therefore known
as the “gas” token of the Ethereum Network. Ether may also be used to pay for goods and services, stored for future
use, or converted to government-backed currency such as the dollar. The value of ether is not backed by any government, corporation,
or other identified body.

Ethereum Blockchain and
Consensus Mechanism

Similar to Bitcoin, transactions
on Ethereum are broadcasted over the Ethereum Network and registered in blocks, which are set to occur every 12 seconds. Ethereum
blocks collectively track the full transaction history, the accounts and balances of users and contracts in the “Ethereum
System,” and other blockchain data that collectively are referred to as the state of Ethereum. Ethereum ensures that its
state transition is deterministic, meaning that given the same initial state and set of transactions, all nodes in the Ethereum
Network are able to compute the same final state. Blocks are organized in a chain forming the “Ethereum Blockchain,”
starting from the “genesis block” at height 0 (zero), which was created on July 30, 2015.