Bitwise Chainlink ETF 10-K: Investor Report Analysis

Executive Summary

The Bitwise Chainlink ETF (the “Trust”) is an exchange-traded product listed on NYSE Arca, Inc., with the primary objective to provide exposure to Chainlink (LINK), a leading decentralized oracle network. The Trust issues common shares that trade on the secondary market, allowing investors to gain direct price exposure to Chainlink without handling digital asset custody themselves.

Key Points for Investors

• Investment Objective: The Trust’s main goal is to track the value of Chainlink held by the Trust, net of operating expenses. NAV is calculated daily based on the CME CF Chainlink-Dollar Reference Rate (New York Variant), with potential for future changes in pricing methodology at the Sponsor’s discretion.
• Sponsor and Custodian: Bitwise Investment Advisers, LLC acts as Sponsor. Chainlink is held in custody by specified digital asset custodians. The Sponsor may switch custodians as it sees fit.
• Shares Outstanding: As of March 16, 2026, the Trust had 830,000 shares outstanding.
• Trading and Arbitrage: Shares are traded on NYSE Arca and may trade at premiums or discounts to NAV. The Trust utilizes the CME Chainlink Real Time Price to calculate an Indicative Trust Value (ITV), updated every 15 seconds during trading hours. Discrepancies between ITV and NAV could incentivize arbitrage trades, potentially affecting share price.
• Pricing Benchmark and Methodology:
  • Pricing is based on the CME CF Chainlink-Dollar Reference Rate, which aggregates transactions across multiple platforms and computes a volume-weighted median every five minutes.
  • The Sponsor reserves the right to change the benchmark if it believes another index better aligns with the Trust’s objectives or if market pricing diverges materially.
  • Any change in pricing methodology would be disclosed to shareholders through SEC filings.
• Fees and Expenses:
  • Sponsor Fee may be temporarily waived or rebated for large investors at the Sponsor’s discretion, with notice provided via website or SEC filings.
  • Administrative, custodian, and marketing fees are paid out of Trust assets.
• Emerging Growth Company Status:
  • The Trust is classified as an “emerging growth company” under the JOBS Act, allowing for reduced reporting requirements.
  • The Trust will not provide auditor attestation on internal controls, comply with certain new audit rules unless determined by the SEC, or provide some disclosures required of larger companies.
  • This status will expire either upon reaching revenue/debt thresholds or five years after IPO.

Risks and Price-Sensitive Information

• Regulatory Risk:
  • A major risk is the possibility that Chainlink could be determined by the SEC or other regulatory bodies to be a “security”. Such a determination would severely impact the ability to trade, clear, or custody Chainlink in the U.S., likely causing a material adverse impact on Chainlink’s price and the Trust’s share value.
  • The Sponsor does not engage in legal analysis to determine Chainlink’s status as a security. Instead, it relies on public information and industry views, which may not be definitive.
  • Any enforcement action or court decision would be expected to have an immediate negative impact on both Chainlink and Trust shares.
• Market and Operational Risks:
  • Chainlink’s price is subject to high volatility, and may be influenced by unregulated trading platforms, manipulation, or sudden market developments.
  • Technology developments, adoption rates, regulatory changes, and global economic conditions (including pandemics) can materially affect Chainlink’s value and Trust performance.
• Benchmark Change Risk:
  • The Sponsor can change the pricing benchmark if it feels the current benchmark diverges from global market prices or no longer aligns with investment objectives.
  • Such changes could lead to significant NAV adjustments, impacting share value.
• Creation and Redemption Suspension:
  • The Sponsor may suspend creation/redemption privileges, which could cause shares to trade at significant premiums or discounts to NAV, affecting liquidity and price stability.
• Arbitrage and Market Price Discrepancies:
  • ITV and NAV may diverge due to calculation differences, incentivizing arbitrage trades that can impact share price.
  • Shares may trade at prices materially different from NAV, depending on market demand and Chainlink liquidity.
• Fee Waivers and Rebates:
  • Temporary fee waivers or rebates for large investors may impact net returns and could influence institutional participation, potentially affecting share price.
• No Employees:
  • The Trust itself has no employees; all operations are managed by external parties, increasing dependency on Sponsor and Service Providers.

Additional Information

• SEC Reporting and Governance: The Trust has no unresolved staff comments and incorporates no documents by reference.
• Shareholder Notifications: Any major changes (benchmark, fee waivers, creation/redemption suspension) will be disclosed via SEC filings, website, or Form 8-K reports.
• Trading Status: The Trust is a non-accelerated filer, smaller reporting company, and an emerging growth company.

Potential Share Price Drivers

• Regulatory Actions: Any SEC or government action regarding Chainlink asset classification could cause immediate and significant price movement.
• Changes in Benchmark or Pricing Methodology: NAV recalculation or benchmark changes may materially affect share price.
• Suspension of Creation/Redemption: May lead to large premiums/discounts relative to NAV.
• Fee Adjustments: Temporary waivers or rebates can affect net returns and attract institutional activity.
• Market Volatility: Chainlink’s inherent volatility, market manipulation, or technology changes can directly impact share value.

Disclaimer

The information provided is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell securities. Investors should review all SEC filings and consult with their financial advisors before making investment decisions. The Bitwise Chainlink ETF is subject to significant risks, including regulatory, operational, and market risks, which may materially impact the value of shares.

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