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: 2026-02-11
Accession Number: 0001999371-26-003054
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2089855/000199937126003054/active-s1a_021126.htm

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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 the bitcoin blockchain contains a complete record and history for each bitcoin transaction.

Miners, who are creating
new bitcoins, 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).

However, due to a lack of central
authority, the release of updates to the Bitcoin Core or other Bitcoin Clients by their developers does not guarantee that the
updates will be automatically adopted by the other network participants. Users and miners must accept any changes made to the source
code by downloading the proposed modification and that modification is effective only with respect to those Bitcoin users and miners
who choose to download it and run. As a practical matter, a modification to the source code becomes part of the Bitcoin Network
only if it is accepted by individuals that collectively form a majority of the Bitcoin Network. If a modification is accepted by
only a small percentage of users and miners, a division will occur such that one network will run the pre-modification source code
and the other network will run the modified source code. Such a division is known as a “hard fork.” To avoid network
splits, the Bitcoin community chooses to implement BIPs via soft forks, which are backward-compatible updates and thus optional
in nature, meaning multiple versions of the same Bitcoin Client can coexist in the Bitcoin Network.

Development of Bitcoin Clients
has increasingly focused on amendments to the Bitcoin Protocol to enhance speed and scalability. For example, in August 2017, a
BIP known as “segregated witness” was adopted in a Bitcoin soft fork. Among other things, it enables so-called second
layer solutions, such as the “Lightning Network,” or payment channels, which could potentially allow greater speed
and a greater number of transactions that the Bitcoin Network can process in a given time interval (i.e., transaction throughput).
The Lightning Network is an open-source decentralized network that enables the instant off-blockchain transfer of bitcoin without
requiring a trusted third party. The Lightning Network uses bidirectional payment channels, which work as follows: an on-blockchain
transaction is required to open a channel, which can later be closed through another on-blockchain transaction. Once a channel
is open, value can be transferred instantly between counterparties engaging in bitcoin transactions without such transactions being
broadcasted to the Bitcoin Network. This enables increased transaction throughput and reduces the computational burden on the Bitcoin
Network. The Lightning Network is currently a subject of ongoing research and development and does not yet have material adoption
as of August 2024, with approximately 5,200 bitcoins in total liquidity deposited in its payment channels.

Other uses of segregated witness
include smart contracts (which are programs that automatically execute on a blockchain) and distributed registers built into, built
atop, or pegged alongside the Bitcoin Blockchain. For example, one white paper published by the blockchain technology company Blockstream
Corporation Inc. calls for the use of “pegged sidechains” to develop programming environments built within blockchain
ledgers that can interact with and rely on the security of the Bitcoin Network and blockchain while remaining independent thereof.
Applications of this concept include open-source projects such as RSK (Rootstock), which seeks to create novel open-source smart
contract platforms built on the Bitcoin Blockchain to allow automated, condition-based payments with increased speed and scalability.

Such research and development
projects may utilize bitcoin as tokens for the facilitation of their non-financial uses, thereby potentially increasing demand
for bitcoin and the utility of the Bitcoin Network as a whole. Conversely, to the extent that such projects operate on the Bitcoin
Blockchain, they may increase the data flow on the Bitcoin Network and could either “bloat” the size of the blockchain
or result in slower confirmation times. At this time, such projects remain in early stages and have not been materially integrated
into the blockchain or Bitcoin Network.

The latest Bitcoin soft fork
known as “Taproot” was activated in November 2021, introducing a new scheme for digital signatures, enhancing the privacy
of more complex Bitcoin scripts and optimizing block space usage for multi-signature transactions. Taproot has become more prominent
since late 2022 with the launch of Bitcoin inscriptions, which uses Taproot functionality to assign pieces of information to distinct
satoshis. Also, Taproot is being used in the implementation of Taproot Assets, a novel programmability layer built on top of Bitcoin
that allows users to create other crypto assets on the Bitcoin Blockchain, while using them at fast speeds and low costs over the
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.