Investing in the Trust involves a high degree of risk. As with any investment, there is a risk that you could lose all or a portion of your investment in the Trust.
Must be preceded or accompanied by a prospectus. The Trust’s prospectus can be read here or be obtained by calling 1-844-802-4004.
The Trust is not a registered investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”) and is not required to register under the Investment Company Act. Osprey Funds, LLC (the “Sponsor”) is not registered with the U.S. Securities and Exchange Commission (the “SEC”) as an investment adviser and is not subject to regulation by the SEC, as such, in connection with its activities with respect to the Trust. The Trust is not a commodity pool for purposes of the Commodity Exchange Act, and the Sponsor is not subject to regulation by the Commodity Futures Trading Commission as a commodity pool operator or a commodity trading advisor in connection with its activities with respect to the Trust. Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act or the protections afforded by the Commodity Exchange Act.
THE TRUST AND SPONSOR ARE NOT AFFILIATED WITH BITCOIN.
The Trust’s investment exposure is concentrated in the Bitcoin ecosystem. Risks associated with this exposure may adversely affect the Trust’s net asset value (“NAV”) per share, trading price, yield, total return, and/or ability to meet its investment objective.
The value of the Trust, which focuses on underlying securities in the crypto sector, may be more volatile than a more diversified pooled investment or the market as a whole and may perform differently from the value of a more diversified pooled investment or the market as a whole.
Crypto Asset Risk. The Trust holds Bitcoin, a crypto asset that is native to the Bitcoin blockchain. Crypto assets are subject to extreme volatility, regulatory and tax uncertainty, market manipulation, security breaches, and technological change. The value of the Shares will fluctuate with the price of Bitcoin, which is influenced by adoption of the Bitcoin network, competition from other digital assets and payment technologies, network congestion, forks or changes to the Bitcoin protocol, mining economics, and the behavior of large holders. Digital asset trading venues and counterparties may be less regulated than traditional financial institutions and have experienced fraud, insolvency, hacking, and operational failures, which can negatively impact Bitcoin’s price and the value of the Shares.
Bitcoin and Blockchain Risk. Bitcoin and the Bitcoin network are relatively new innovations and are subject to unique and substantial risks, including software bugs, governance disputes, hard forks, scaling limitations, dependence on internet connectivity, and concentration or disruption of mining activity. Loss, theft, destruction, or compromise of private keys, or failures in the cryptography or security underpinning the Bitcoin network (including from advances in computing such as quantum technology), could result in permanent loss of Bitcoin and a decline in the value of the Shares.
Market and Liquidity Risk. The price of Bitcoin has historically experienced extreme volatility, including rapid appreciations followed by steep drawdowns, and may continue to do so in the future. Events such as failures or hacks of major digital asset platforms, stress in stablecoins, macroeconomic shocks, or public health or geopolitical crises can significantly reduce liquidity, widen spreads, and lead to large, sudden declines in Bitcoin’s price, which could cause the Shares to lose all or substantially all of their value.
Regulatory and Legal Risk. Digital asset markets operate in a rapidly evolving regulatory environment in the United States and abroad. Changes in laws, regulations, guidance, enforcement priorities, or licensing requirements affecting Bitcoin, digital asset platforms, custodians, or the Trust (including potential determinations that Bitcoin is a security or a commodity interest) could increase costs, impair operations, force changes to the Trust’s structure, or require liquidation at a time that is disadvantageous to shareholders. Adverse tax guidance or changes in the treatment of digital assets for tax purposes could also negatively affect the value of Bitcoin and the Shares.
Index and Trust Structure Risk. The Trust is a passive vehicle that seeks to track the price of Bitcoin and is not actively managed to mitigate market declines or network events. The Trust’s net asset value is based on an index and valuation methodologies that may not perfectly reflect the global Bitcoin market and may differ from prices on any particular trading venue or those used in the Trust’s financial statements. The amount of Bitcoin represented by each Share will decline over time as Bitcoin is sold to pay the sponsor’s fee and certain expenses, so absent sufficient increases in the price of Bitcoin, the value of the Shares may decrease over time.
Creation, Redemption and Trading Risk. The ability of authorized participants to create and redeem Shares, and to arbitrage between the trading price of the Shares and the value of the Trust’s Bitcoin, depends on robust operations of the Bitcoin network, the custodian, the prime execution agent, connected trading venues, and the banking system. Disruptions, failures, or regulatory actions affecting any of these, or reduced participation by authorized participants, may cause wider bid‑ask spreads, reduced liquidity, and Shares trading at a premium or discount to net asset value.
Custody and Cybersecurity Risk. The Trust’s Bitcoin is controlled by private cryptographic keys held by third-party custodians and trading intermediaries. Loss, theft, destruction, or compromise of these keys due to hacking, operational failures, software bugs, or insider malfeasance could result in a partial or total loss of the Trust’s Bitcoin, which may not be covered by insurance or recourse to the custodian or other service providers.
Index and Pricing Risk. The Trust’s net asset value depends on a Bitcoin reference index and pricing inputs from a limited number of digital asset trading venues. Disruptions, outages, data errors, manipulation, or extreme volatility at these venues, or flaws in the index methodology, may cause the Shares’ value to deviate from the broader Bitcoin market or trade at a premium or discount to the value of the Trust’s Bitcoin.
Concentration and Competition Risk. Bitcoin represents a concentrated exposure to a single digital asset and investment theme. The value of Bitcoin and the Shares could be adversely affected by large holders selling significant amounts of Bitcoin, competition from other cryptocurrencies, stablecoins, central bank digital currencies, or other Bitcoin investment vehicles, and shifting market preferences among digital asset products.
Service Provider and Operational Risk. The Trust relies on multiple unaffiliated service providers, including the sponsor, trustee, administrator, custodian, prime execution agent, index provider, and authorized participants, for critical functions. Failures, financial distress, errors, cybersecurity incidents, or termination of services by any of these providers, or disruptions to banking, payment, or trading infrastructure, could impair creations and redemptions, hinder normal operations, or lead to losses for shareholders.
Regulatory and Classification Risk. Evolving laws and regulations may change how Bitcoin, the Trust, or its service providers are regulated, including potential treatment of Bitcoin as a security or commodity interest. New licensing, registration, disclosure, or compliance obligations for the Trust, sponsor, or trustee—or an inability or decision not to comply—could increase costs, restrict operations, force changes to the Trust’s structure, or result in liquidation at a time that is disadvantageous to investors.
Tax and Structural Risk. The tax treatment of digital assets and the Trust is uncertain and may change, including with respect to grantor trust status and U.S. federal, state, local, or non-U.S. tax rules. Investors may be subject to taxable income from the Trust (for example, from Bitcoin sales to pay fees and expenses) without a corresponding cash distribution, and future tax guidance or events such as forks could increase the Trust’s tax-related costs or adversely affect the value of Bitcoin and the Shares.
Fork and Protocol Change Risk. The Bitcoin network may experience “forks” or other protocol changes that split the blockchain or alter key network characteristics. Such events may create uncertainty about which asset represents “Bitcoin,” disrupt pricing and liquidity, affect index calculations or custody arrangements, and require the Trust or its service providers to make discretionary decisions that could negatively impact the value of the Shares.
Network and Mining Risk. The security and value of Bitcoin depend on the continued operation, economic incentives, and geographic and entity dispersion of miners validating transactions on the Bitcoin network. Declining mining rewards, rising energy costs, regulatory restrictions on mining, concentration of hash power, or successful attacks or collusion by miners could reduce network security, impair transaction processing, diminish confidence in Bitcoin, and negatively affect the price of Bitcoin and the Shares.
Stablecoin and Market Structure Risk. Although the Trust does not invest in stablecoins, Bitcoin trading activity and liquidity on many digital asset platforms are heavily intertwined with major stablecoins. Instability, loss of confidence, regulatory actions, or failures of stablecoin issuers or their reserves could disrupt trading, impair liquidity, distort Bitcoin prices, and adversely affect the value of the Shares.
Marketing Agent: Foreside Fund Services, LLC, member FINRA, not affiliated with REX Shares, Osprey Funds, or the Trust.
CF BENCHMARKS LTD INDEX DATA IS USED UNDER LICENSE AS A SOURCE OF INFORMATION FOR CERTAIN OSPREY PRODUCTS. CF BENCHMARKS LTD, ITS LICENSORS AND AGENTS HAVE NO OTHER CONNECTION TO OSPREY PRODUCTS AND SERVICES AND DO NOT SPONSOR, ENDORSE, RECOMMEND OR PROMOTE ANY OSPREY PRODUCTS OR SERVICES. CF BENCHMARKS ITS LICENSORS AND AGENTS HAVE NO OBLIGATION OR LIABILITY IN CONNECTION WITH THE OSPREY PRODUCTS AND SERVICES. CF BENCHMARKS ITS LICENSORS AND AGENTS DO NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF ANY INDEX AND SHALL NOT HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
