Fair Value of Investments in Digital Assets

6 Months Ended

Dec. 31, 2022

Fair Value of Investments in Digital Assets

3. Fair Value of Investments in Digital Assets

The Fund Components are held by the Custodian on behalf of the Fund and are carried at fair value. The following table represents the fair value of each Fund Component using the price provided at 4:00 p.m., New York time, by the relevant Digital Asset Exchange Market considered to be its principal market, as determined by the Fund:


Fund Component	Principal Market	December 31, 2022		June 30, 2022
BTC	Coinbase Pro	$	16,556.29	$	18,895.01
ETH	Coinbase Pro	$	1,201.33	$	1,019.72
ADA(1)	Coinbase Pro	$	0.25	$	0.44
MATIC(2)	Coinbase Pro	$	0.76	N/A
SOL(3)	Coinbase Pro	$	10.09	$	31.98
AVAX(4)	Coinbase Pro	$	10.95	$	16.24
DOT(4)(5)	Coinbase Pro	N/A		$	6.81
LTC(5)	Coinbase Pro	N/A		$	51.43
UNI(3)(5)	Coinbase Pro	N/A		$	4.82
LINK(5)(6)	Coinbase Pro	N/A		$	6.04
BCH(5)	Coinbase Pro	N/A		$	99.92

(1)

Effective July 1, 2021, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase ADA in accordance with the Fund Construction Criteria. See Note 5. Portfolio Rebalancing for a description of the portfolio rebalancing.

(2)

Effective October 5, 2022, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase MATIC in accordance with the DLCS Methodology. See Note 5. Portfolio Rebalancing for a description of the portfolio rebalancing.

(3)

Effective October 1, 2021, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase SOL and UNI in accordance with the Fund Construction Criteria. See Note 5. Portfolio Rebalancing for a description of the portfolio rebalancing.

(4)

Effective April 5, 2022, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase DOT and AVAX in accordance with the Fund Construction Criteria. See Note 5. Portfolio Rebalancing for a description of the portfolio rebalancing.

(5)

Effective July 7, 2022, following adoption of the DLCS Methodology, the Fund removed DOT, LTC, UNI, LINK and BCH from the Fund’s portfolio and sold the DOT, LTC, UNI, LINK and BCH holdings to purchase additional tokens of the remaining Fund Components in proportion to their respective weightings. See Note 5. Portfolio Rebalancing for a description of the portfolio rebalancing.

(6)

Effective April 2, 2021, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings and using the cash proceeds to purchase LINK in accordance with the Fund Construction Criteria. See Note 5. Portfolio Rebalancing for a description of the portfolio rebalancing.

The following represents the changes in quantity of each Fund Component and their respective fair values:


(Amounts in thousands, except BTC amounts)	Quantity			Fair Value
BTC balance at June 30, 2021		7,340.02142854		$	255,175
BTC contributed		13.24337963			612
BTC distributed from portfolio rebalancing		(955.65065367	)		(40,252	)
BTC distributed for Manager's Fee, related party		(166.17761410	)		(7,160	)
Net change in unrealized depreciation on investment in BTC		-			(125,363	)
Net realized gain on investment in BTC		-			34,731
BTC balance at June 30, 2022		6,231.43654040		$	117,743
BTC contributed		-			-
BTC contributed from portfolio rebalancing		100.85776946			2,071
BTC distributed for Manager's Fee, related party		(79.86987251	)		(1,573	)
Net change in unrealized depreciation on investment in BTC		-			(16,212	)
Net realized gain on investment in BTC		-			1,488
BTC balance at December 31, 2022		6,252.42443735		$	103,517


(Amounts in thousands, except ETH amounts)	Quantity			Fair Value
ETH balance at June 30, 2021		45,287.78133655		$	101,625
ETH contributed		77.55708625			252
ETH distributed from portfolio rebalancing		(4,990.48482039	)		(12,204	)
ETH distributed for Manager's Fee, related party		(1,015.08319570	)		(3,080	)
Net change in unrealized depreciation on investment in ETH		-			(59,012	)
Net realized gain on investment in ETH		-			12,555
ETH balance at June 30, 2022		39,359.77040671		$	40,136
ETH contributed		-			-
ETH contributed from portfolio rebalancing		1,144.30646254			1,266
ETH distributed for Manager's Fee, related party		(509.03263763	)		(717	)
Net change in unrealized appreciation on investment in ETH		-			6,594
Net realized gain on investment in ETH		-			768
ETH balance at December 31, 2022		39,995.04423162		$	48,047


(Amounts in thousands, except ADA amounts)	Quantity			Fair Value
ADA balance at June 30, 2021		-		$	-
ADA contributed		20,953.270382			46
ADA contributed from portfolio rebalancing		11,178,490.637538			15,389
ADA distributed for Manager's Fee, related party		(282,861.007666	)		(392	)
Net change in unrealized depreciation on investment in ADA		-			(10,650	)
Net realized gain on investment in ADA		-			410
ADA balance at June 30, 2022		10,916,582.900254		$	4,803
ADA contributed		-			-
ADA contributed from portfolio rebalancing		396,962.614260			185
ADA distributed for Manager's Fee, related party		(141,863.622114	)		(58	)
Net change in unrealized depreciation on investment in ADA		-			(1,959	)
Net realized loss on investment in ADA		-			(190	)
ADA balance at December 31, 2022		11,171,681.892400		$	2,781


(Amounts in thousands, except MATIC amounts)	Quantity			Fair Value
MATIC balance at June 30, 2022		-		$	-
MATIC contributed		-			-
MATIC contributed from portfolio rebalancing		2,879,708.35424883			2,409
MATIC distributed for Manager's Fee, related party		(17,305.53285259	)		(16	)
Net change in unrealized depreciation on investment in MATIC		-			(219	)
Net realized gain on investment in MATIC		-			9
MATIC balance at December 31, 2022		2,862,402.82139624		$	2,183


(Amounts in thousands, except SOL amounts)	Quantity			Fair Value
SOL balance at June 30, 2021		-		$	-
SOL contributed		-			-
SOL contributed from portfolio rebalancing		113,222.94565799			15,869
SOL distributed for Manager's Fee, related party		(2,006.81300105	)		(246	)
Net change in unrealized depreciation on investment in SOL		-			(11,864	)
Net realized loss on investment in SOL		-			(202	)
SOL balance at June 30, 2022		111,216.13265694		$	3,557
SOL contributed		-			-
SOL contributed from portfolio rebalancing		6,029.76517467			216
SOL distributed for Manager's Fee, related party		(1,455.09720385	)		(42	)
Net change in unrealized depreciation on investment in SOL		-			(2,408	)
Net realized loss on investment in SOL		-			(154	)
SOL balance at December 31, 2022		115,790.80062776		$	1,169


(Amounts in thousands, except AVAX amounts)	Quantity			Fair Value
AVAX balance at June 30, 2021		-		$	-
AVAX contributed		-			-
AVAX contributed from portfolio rebalancing		89,505.76684675			8,665
AVAX distributed for Manager's Fee, related party		(531.78848214	)		(23	)
Net change in unrealized depreciation on investment in AVAX		-			(6,936	)
Net realized loss on investment in AVAX		-			(261	)
AVAX balance at June 30, 2022		88,973.97836461		$	1,445
AVAX contributed		-			-
AVAX contributed from portfolio rebalancing		8,785.21069538			162
AVAX distributed for Manager's Fee, related party		(1,202.02003652	)		(21	)
Net change in unrealized depreciation on investment in AVAX		-			(442	)
Net realized loss on investment in AVAX		-			(86	)
AVAX balance at December 31, 2022		96,557.16902347		$	1,058


(Amounts in thousands, except DOT amounts)	Quantity			Fair Value
DOT balance at June 30, 2021		-		$	-
DOT contributed		-			-
DOT contributed from portfolio rebalancing		330,149.03708006			7,576
DOT distributed for Manager's Fee, related party		(1,961.54350143	)		(24	)
Net change in unrealized depreciation on investment in DOT		-			(5,103	)
Net realized loss on investment in DOT		-			(214	)
DOT balance at June 30, 2022		328,187.49357863		$	2,235
DOT contributed		-			-
DOT distributed from portfolio rebalancing		(328,052.64509826	)		(2,247	)
DOT distributed for Manager's Fee, related party		(134.84848037	)		(1	)
Net change in unrealized appreciation on investment in DOT		-			5,103
Net realized loss on investment in DOT		-			(5,090	)
DOT balance at December 31, 2022		-		$	-


(Amounts in thousands, except LTC amounts)	Quantity			Fair Value
LTC balance at June 30, 2021		26,184.80079374		$	3,707
LTC contributed		47.39510812			9
LTC distributed from portfolio rebalancing		(1,901.21497737	)		(281	)
LTC distributed for Manager's Fee, related party		(605.89374115	)		(83	)
Net change in unrealized depreciation on investment in LTC		-			(2,315	)
Net realized gain on investment in LTC		-			183
LTC balance at June 30, 2022		23,725.08718334		$	1,220
LTC contributed		-			-
LTC distributed from portfolio rebalancing		(23,715.33881688	)		(1,177	)
LTC distributed for Manager's Fee, related party		(9.74836646	)		(1	)
Net change in unrealized appreciation on investment in LTC		-			574
Net realized loss on investment in LTC		-			(616	)
LTC balance at December 31, 2022		-		$	-


(Amounts in thousands, except UNI amounts)	Quantity			Fair Value
UNI balance at June 30, 2021		-		$	-
UNI contributed		-			-
UNI contributed from portfolio rebalancing		236,778.41720026			5,483
UNI distributed for Manager's Fee, related party		(4,091.39411814	)		(54	)
Net change in unrealized depreciation on investment in UNI		-			(3,937	)
Net realized loss on investment in UNI		-			(370	)
UNI balance at June 30, 2022		232,687.02308212		$	1,122
UNI contributed		-			-
UNI distributed from portfolio rebalancing		(232,591.41465073	)		(1,236	)
UNI distributed for Manager's Fee, related party		(95.60843139	)		-
Net change in unrealized appreciation on investment in UNI		-			3,937
Net realized loss on investment in UNI		-			(3,823	)
UNI balance at December 31, 2022		-		$	-


(Amounts in thousands, except LINK amounts)	Quantity			Fair Value
LINK balance at June 30, 2021		153,327.61595468		$	2,956
LINK contributed		310.46132900			8
LINK contributed from portfolio rebalancing		9,391.16255779			143
LINK distributed for Manager's Fee, related party		(4,041.64897033	)		(78	)
Net change in unrealized depreciation on investment in LINK		-			(2,016	)
Net realized loss on investment in LINK		-			(53	)
LINK balance at June 30, 2022		158,987.59087114		$	960
LINK contributed		-			-
LINK distributed from portfolio rebalancing		(158,922.26469191	)		(989	)
LINK distributed for Manager's Fee, related party		(65.32617923	)		-
Net change in unrealized appreciation on investment in LINK		-			3,726
Net realized loss on investment in LINK		-			(3,697	)
LINK balance at December 31, 2022		-		$	-


(Amounts in thousands, except BCH amounts)	Quantity			Fair Value
BCH balance at June 30, 2021		7,379.46217362		$	3,845
BCH contributed		13.60904594			8
BCH distributed from portfolio rebalancing		(906.97968581	)		(388	)
BCH distributed for Manager's Fee, related party		(171.88324722	)		(74	)
Net change in unrealized depreciation on investment in BCH		-			(2,830	)
Net realized gain on investment in BCH		-			70
BCH balance at June 30, 2022		6,314.20828653		$	631
BCH contributed		-			-
BCH distributed from portfolio rebalancing		(6,311.61385070	)		(660	)
BCH distributed for Manager's Fee, related party		(2.59443583	)		-
Net change in unrealized appreciation on investment in BCH		-			1,662
Net realized loss on investment in BCH		-			(1,633	)
BCH balance at December 31, 2022		-		$	-

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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