“Custodian Fee”— Fee payable
to the Custodian for services it provides to the Trust, which the
Sponsor shall pay to the Custodian as a Sponsor-paid Expense.
“DCG”— Digital Currency
Group, Inc.
“Digital Asset Account”— A
segregated custody account controlled and secured by the Custodian
to store private keys, which allow for the transfer of ownership or
control of the Trust’s Bitcoins on the Trust’s behalf.
“Digital Asset Exchange”— An
electronic marketplace where exchange participants may trade, buy
and sell Bitcoins based on bid-ask trading. The largest Digital
Asset Exchanges are online and typically trade on a 24-hour basis, publishing transaction
price and volume data.
“Digital Asset Exchange
Market”— The global exchange market for the trading of
Bitcoins, which consists of transactions on electronic Digital
Asset Exchanges.
“Digital Asset Holdings”— The
aggregate value, expressed in U.S. dollars, of the Trust’s assets
(other than U.S. dollars or other fiat currency), less its
liabilities (which include estimated accrued but unpaid fees and
expenses) calculated in the manner set forth under “Item 1.
Business—Valuation of Bitcoin and Determination of Digital Asset
Holdings” in our Annual Report. See also “Item 1.
Business—Investment Objective” in our Annual Report for a
description of the Trust’s NAV, as calculated in accordance with
GAAP.
“Digital Asset Holdings Fee Basis
Amount”— The amount on which the Sponsor’s Fee for the Trust
is based, as calculated in the manner set forth under “Item 1.
Business—Valuation of Bitcoin and Determination of Digital Asset
Holdings” in our Annual Report.
“Digital Asset Market”— A
“Brokered Market,” “Dealer Market,” “Principal-to-Principal Market”
or “Exchange Market,” as each such term is defined in the Financial
Accounting Standards Board Accounting Standards Codification Master
Glossary.
“DSTA”— The Delaware
Statutory Trust Act, as amended.
“DTC”— The Depository Trust
Company. DTC is a limited purpose trust company organized under New
York law, a member of the U.S. Federal Reserve System and a
clearing agency registered with the SEC. DTC will act as the
securities depository for the Shares.
“Exchange Act”— The
Securities Exchange Act of 1934, as amended.
“FINRA”— The Financial
Industry Regulatory Authority, Inc., which is the primary regulator
in the United States for broker-dealers, including Authorized
Participants.
“GAAP”— United States
generally accepted accounting principles.
“Genesis”— Genesis Global
Trading, Inc., a wholly owned subsidiary of Digital Currency Group,
Inc., which as of the date of this Quarterly Report, is the only
acting Liquidity Provider.
“Grayscale Securities”—
Grayscale Securities, LLC, a wholly owned subsidiary of the
Sponsor, which as of the date of this Quarterly Report, is the only
acting Authorized Participant.
“Incidental Rights”— Rights
to acquire, or otherwise establish dominion and control over, any
virtual currency or other asset or right, which rights are incident
to the Trust’s ownership of Bitcoins and arise without any action
of the Trust, or of the Sponsor or Trustee on behalf of the
Trust.
“Index”— The CoinDesk Bitcoin
Price Index (XBX).
“Index License Agreement”—
The license agreement, dated as of February 1, 2022, between
the Index Provider and the Sponsor governing the Sponsor’s use of
the Index for calculation of the Index Price.
“Index Price” — The U.S.
dollar value of a Bitcoin derived from the Digital Asset Exchanges
that are reflected in the Index, calculated at 4:00 p.m., New York
time, on each business day. See “Item 1. Business—Overview of the
Bitcoin Industry and Market—Bitcoin Value—The Index and the Index
Price” in our Annual Report for a description of how the Index
Price is calculated. For purposes of the Trust Agreement, the term
Bitcoin Index Price shall mean the Index Price as defined
herein.
“Index Provider”— CoinDesk
Indices, Inc., a Delaware corporation that publishes the Index. DCG
is the indirect parent company of CoinDesk Indices, Inc. As a
result, CoinDesk Indices, Inc. is an affiliate of the Sponsor and
the Trust and is considered a related party of the Trust.
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