BCHG 10-K & 10-Q changes, risk factors and insider trading

Summary of Risk Factors

Below is a summary of the principal factors that make an investment in the Shares speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below and should be read in conjunction with the other information included in this Annual Report on Form 10-K, including the Trust’s financial statements and related notes thereto, and our other filings with the SEC, before making an investment decision regarding the Shares. See “Glossary of Defined Terms” for the definition of certain capitalized terms used in this Annual Report. All other capitalized terms used, but not defined, herein have the meanings given to them in the Trust Agreement.

Extreme volatility of trading prices that many digital assets, including BCH, have experienced in recent periods and may continue to experience, could have a material adverse effect on the value of the Shares and the Shares could lose all or substantially all of their value;

The medium-to-long term value of the Shares is subject to a number of factors relating to the capabilities and development of blockchain technologies and to the fundamental investment characteristics of digital assets;

The value of the Shares is dependent on the acceptance of digital assets, such as BCH, which represent a new and rapidly evolving industry;

Digital assets may have concentrated ownership and large sales or distributions by holders of such digital assets could have an adverse effect on the market price of such digital assets;

A temporary or permanent “fork” or a “clone” could adversely affect the value of the Shares;

Recent developments in the digital asset economy have led to extreme volatility and disruption in digital asset markets, a loss of confidence in participants of the digital asset ecosystem, significant negative publicity surrounding digital assets broadly and market-wide declines in liquidity;

The value of the Shares relates directly to the value of BCH held by the Trust, the value of which may be highly volatile and subject to fluctuations;

Because of the holding period under Rule 144, the lack of an ongoing redemption program, and the Trust’s ability to halt creations from time to time, there is no arbitrage mechanism to keep the value of the Shares closely linked to the Index Price and the Shares have historically traded at a substantial premium over, or a substantial discount to, the NAV per Share;

The Shares may trade at a price that is at, above or below the Trust’s NAV per Share as a result of the non-current trading hours between OTCQX and the Digital Asset Trading Platform Market;

The largely unregulated nature and lack of transparency surrounding the operations of Digital Asset Trading Platforms may adversely affect the value of digital assets and, consequently, the value of the Shares;

The limited history of the Index;

Competition from the emergence or growth of other digital assets could have a negative impact on the price of BCH and adversely affect the value of the Shares;

The Trust relies on third-party service providers to perform certain functions essential to the affairs of the Trust and the replacement of such service providers could pose challenges to the safekeeping of the Trust’s BCH and to the operations of the Trust;

Shareholders may suffer a loss on their investment if the Shares trade above or below the Trust’s NAV per Share;

A determination that BCH or any other digital asset is a “security” may adversely affect the value of BCH and the value of the Shares, and result in potentially extraordinary, nonrecurring expenses to, or termination of, the Trust;

Regulatory changes or actions by the U.S. Congress or any U.S. federal or state agencies may affect the value of the Shares or restrict the use of BCH, mining activity or the operation of the Bitcoin Cash Network or the Digital Asset Markets in a manner that adversely affects the value of the Shares;

Changes in the policies of the U.S. Securities and Exchange Commission (the “SEC”) could adversely impact the value of the Shares;

Regulatory changes or other events in foreign jurisdictions may affect the value of the Shares or restrict the use of one or more digital assets, mining activity or the operation of their networks or the Digital Asset Trading Platform Market in a manner that adversely affects the value of the Shares;

The Authorized Participant, the Trust or the Sponsor could be subject to regulation as a money service business or money transmitter, which could result in extraordinary expenses to the Authorized Participant, the Trust or the Sponsor and also result in decreased liquidity for the Shares;

Regulatory changes or interpretations could obligate the Trust or the Sponsor to register and comply with new regulations, resulting in potentially extraordinary, nonrecurring expenses to the Trust;

Conflicts of interest may arise among the Sponsor or its affiliates and the Trust;

The Sponsor’s services may be discontinued, which could be detrimental to the Trust; and If the Custodian resigns or is removed by the Sponsor, or otherwise, without replacement, it could trigger early termination of the Trust.

The trading prices of many digital assets, including BCH, have experienced extreme volatility throughout their existence, including in recent periods, and may continue to do so. For instance, following significant increases throughout the majority of 2020, digital asset prices, including BCH, experienced significant volatility throughout 2021 and 2022. This volatility became extreme in November 2022 when FTX, then a major Digital Asset Trading Platform, halted customer withdrawals. See “—Recent developments in the digital asset economy have led to extreme volatility and disruption in digital asset markets, a loss of confidence in participants of the digital asset ecosystem, significant negative publicity surrounding digital assets broadly and market-wide declines in liquidity.” Digital asset prices, including BCH, have continued to fluctuate widely through the date of this Annual Report.

Furthermore, changes in U.S. political leadership and economic policies may create uncertainty that materially affects the price of BCH and the Trust’s Shares. For example, on March 6, 2025, President Trump signed an Executive Order to establish a Strategic Bitcoin Reserve and a United States Digital Asset Stockpile. Pursuant to this Executive Order, the Strategic Bitcoin Reserve will be capitalized with Bitcoin owned by the Department of Treasury that was forfeited as part of criminal or civil asset forfeiture proceedings, and the Secretaries of Treasury and Commerce are authorized to develop budget-neutral strategies for acquiring additional bitcoin, provided that those strategies impose no incremental costs on American taxpayers. Conversely, the Digital Asset Stockpile will consist of all digital assets other than Bitcoin owned by the Department of Treasury that were forfeited in criminal or civil asset forfeiture proceedings, but the U.S. government will not acquire additional assets for the U.S. Digital Asset Stockpile beyond those obtained through such proceedings. The anticipation of a U.S. government-funded strategic cryptocurrency reserve had motivated large-scale purchases of certain digital assets in the expectation of the U.S. government acquiring BCH to fund such reserve, and the market price of such digital assets decreased significantly as a result of the ultimate content of the Executive Order. Any similar action or omission by the U.S. federal administration or other government authorities with respect to BCH or other digital assets may negatively and significantly impact the price of BCH and the Trust’s Shares.

Digital assets such as BCH were only introduced within the past two decades, and the medium-to-long term value of the Shares is subject to a number of factors relating to the capabilities and development of blockchain technologies and to the fundamental investment characteristics of digital assets.

Digital asset networks and related protocols are in the early stages of development. Given the recency of the development of digital asset networks and related protocols, digital assets and the underlying digital asset networks and related protocols may not function as intended and parties may be unwilling to use digital assets, which would dampen the growth, if any, of digital asset networks and related protocols.

The loss of access to a private key required to access a digital asset may be irreversible. If a private key is lost and no backup of the private key is accessible, or if the private key is otherwise compromised, the owner would be unable to access the digital asset corresponding to that private key.

Digital asset networks and related protocols are dependent upon the internet. A disruption of the internet or a digital asset network or related protocol, such as the Bitcoin Cash Network, would affect the ability to transfer digital assets, including BCH, and, consequently, their value.

The acceptance of software patches or upgrades to a digital asset network by a significant, but not overwhelming, percentage of the users and miners in a digital asset network, such as the Bitcoin Cash Network, could result in a “fork” in such network’s blockchain, resulting in the operation of multiple separate blockchain networks.

Digital asset mining operations can consume significant amounts of electricity, which may have a negative environmental impact and give rise to public opinion against allowing, or government regulations restricting, the use of electricity for mining operations. Additionally, miners may be forced to cease operations during an electricity shortage or power outage.

Many digital asset networks face significant scaling challenges and are being upgraded with various features to increase the speed and throughput of digital asset transactions. These attempts to increase the volume of transactions may not be effective.

The open-source structure of many digital asset network protocols, such as the protocol for the Bitcoin Cash Network, means that developers and other contributors are generally not directly compensated for their contributions in maintaining and developing such protocols. As a result, the developers and other contributors of a particular digital asset may lack a financial incentive to maintain or develop the network or may lack the resources to adequately address emerging issues. Alternatively, some developers may be funded by companies whose interests are at odds with other participants in a particular digital asset network. A failure to properly monitor and upgrade the protocol of the Bitcoin Cash Network could damage that network.

Moreover, in the past, flaws in the source code for digital asset networks and related protocols have been exposed and exploited, including flaws that disabled some functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets. The cryptography underlying BCH could prove to be flawed or ineffective, or developments in mathematics and/or technology, including advances in digital computing, algebraic geometry and quantum computing, could result in such cryptography becoming ineffective. In any of these circumstances, a malicious actor may be able to take the Trust’s BCH, which would adversely affect the value of the Shares. Moreover, functionality of the Bitcoin Cash Network may be negatively affected by such an exploit such that it is no longer attractive to users, thereby dampening demand for BCH. Even if another digital asset other than BCH were affected by similar circumstances, any reduction in confidence in the source code or cryptography underlying digital asset networks and related protocols generally could negatively affect the demand for digital assets and therefore adversely affect the value of the Shares.

Moreover, because digital assets, including BCH, have existed for a short period of time and are continuing to be developed, there may be additional risks to digital asset networks and related protocols that are impossible to predict as of the date of this Annual Report.

The Trust is not managed like a business corporation or an active investment vehicle.

Includes the total number of Shares that are not restricted securities as such term is defined under Rule 144.

Includes Cede & Co. as nominee for DTC for the Shares traded on OTCQX but not its direct participants. Therefore, this number does not include the individual holders who have bought/sold Shares on OTCQX or transferred their eligible Shares to their brokerage accounts.

The cost basis of the BCH received by the Trust in connection with a creation order is recorded by the Trust at the fair value of BCH at 4:00 p.m., New York time, on the creation date for financial reporting purposes. The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

Net realized and unrealized gain on investment in BCH for the year ended June 30, 2025 was $48,629, which includes a realized loss of ($17) on the transfer of BCH to pay the Sponsor’s Fee and net change in unrealized appreciation on investment in BCH of $48,646. Net realized and unrealized gain on investment in BCH for the year was driven by BCH price appreciation from $391.88 per BCH as of June 30, 2024, to $517.38 per BCH as of June 30, 2025. Net increase in net assets resulting from operations was $44,964 for the year ended June 30, 2025, which consisted of the net realized and unrealized gain on investment in BCH, less the Sponsor’s Fee of $3,665. Net assets increased to $202,961 at June 30, 2025, a 50% increase for the year. The increase in net assets resulted from the aforementioned BCH price appreciation and the contribution of approximately 57,238 BCH with a value of $22,983 to the Trust in connection with Share creations during the year, partially offset by the withdrawal of approximately 9,481 BCH to pay the foregoing Sponsor’s Fee.

Net realized and unrealized gain on investment in BCH for the year ended June 30, 2024 was $22,755, which includes a realized loss of ($450) on the transfer of BCH to pay the Sponsor’s Fee and net change in unrealized appreciation on investment in BCH of $23,205. Net realized and unrealized gain on investment in BCH for the year was driven by BCH price appreciation from $302.01 per BCH as of June 30, 2023, to $391.88 per BCH as of June 30, 2024. Net increase in net assets resulting from operations was $20,286 for the year ended June 30, 2024, which consisted of the net realized and unrealized gain on investment in BCH, less the Sponsor’s Fee of $2,469. Net assets increased to $135,014 at June 30, 2024, a 47% increase for the year. The increase in net assets resulted from the aforementioned BCH price appreciation and the contribution of approximately 47,623 BCH with a value of $22,716 to the Trust in connection with Share creations during year, partially offset by the withdrawal of approximately 7,759 BCH to pay the foregoing Sponsor’s Fee.

The Trust performed an assessment of the principal market at June 30, 2025, 2024 and 2023, and identified the principal market as Coinbase.

As of June 30, 2025, 2024 and 2023, the Principal Market NAV per Share was calculated using the fair value of BCH based on the price provided by Coinbase, the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date. Prior to February 7, 2024, Principal Market NAV was referred to as NAV and Principal Market NAV per Share was referred to as NAV per Share.

As of June 30, 2025, the Trust had a net closing balance with a value of $202,846,976, based on the Index Price (non-GAAP methodology). As of June 30, 2025, the Trust had a total market value of $202,960,739, based on the Digital Asset Market price of BCH on the Trust’s principal market (Coinbase).

As of June 30, 2024, the Trust had a net closing balance with a value of $135,031,069, based on the Index Price (non-GAAP methodology). As of June 30, 2024, the Trust had a total market value of $135,013,842, based on the Digital Asset Market price of BCH on the Trust’s principal market (Coinbase).

As of June 30, 2023, the Trust had a net closing balance with a value of $92,094,095, based on the Index Price (non-GAAP methodology). As of June 30, 2023, the Trust had a total market value of $92,011,836, based on the Digital Asset Market price of BCH on the Trust’s principal market (Coinbase).

Secondary Market Trading

The Trust’s Shares have been quoted on OTCQX under the symbol BCHG since August 18, 2020. The price of the Shares as quoted on OTCQX has varied significantly from the NAV per Share. From August 18, 2020 to June 30, 2025, the maximum premium of the closing price of the Shares quoted on OTCQX over the value of the Trust’s NAV per Share was 1,852%, the average premium was 238%, the maximum discount of the closing price of the Shares quoted on OTCQX below the value of the Trust's NAV per Share was 59%, and the average discount was 21%. The closing price of the Shares, as quoted on OTCQX at 4:00 p.m., New York time, on each business day between August 18, 2020 and June 30, 2025, has been quoted at a discount on 612 days. As of June 30, 2025, the last business day of the period, the Trust’s Shares were quoted on OTCQX at a discount of 10% to the Trust’s NAV per Share.

The following table sets out the range of high and low closing prices for the Shares as reported by OTCQX, the Trust’s Principal Market NAV per Share calculated in accordance with U.S. GAAP and the Trust’s NAV per Share for each of the quarters of the prior three years.

The Principal Market NAV is calculated using the fair value of BCH based on the price provided by the Digital Asset Market that the Trust considers its principal market, which is Coinbase. Prior to February 7, 2024, Principal Market NAV was referred to as NAV and Principal Market NAV per Share was referred to as NAV per Share. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Principal Market and Fair Value Determination.”

The Trust’s NAV per Share is derived from the Index Price as represented by the Index as of 4:00 p.m., New York time, on the valuation date. The Index Price is calculated using non-GAAP methodology and is not used in the Trust’s financial statements. Prior to February 7, 2024, NAV was referred to as Digital Asset Holdings and NAV per Share was referred to as Digital Asset Holdings per Share. See “Item 1. Business—Valuation of BCH and Determination of NAV.”

The cost basis of the BCH received by the Trust in connection with a creation order is recorded by the Trust at the fair value of BCH at 4:00 p.m., New York time, on the creation date for financial reporting purposes. The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

The Trust performed an assessment of the principal market at December 31, 2025 and 2024, and identified the principal market as Coinbase.

As of December 31, 2025 and 2024, the Principal Market NAV per Share was calculated using the fair value of BCH based on the price provided by Coinbase, the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date. Prior to February 7, 2024, Principal Market NAV was referred to as NAV and Principal Market NAV per Share was referred to as NAV per Share.

(3)

The Trust’s NAV per Share is derived from the Index Price, as represented by the Index as of 4:00 p.m., New York time, on the valuation date. The Trust’s NAV per Share is calculated using a non-GAAP methodology where the price is derived from multiple Digital Asset Trading Platforms. Prior to February 7, 2024, NAV was referred to as Digital Asset Holdings and NAV per Share was referred to as Digital Asset Holdings per Share. See “Item 1. Business—Overview of the BCH Industry and Market—BCH Value—The Index and the Index Price” in our Annual Report for a description of the Index and the Index Price. The Digital Asset Trading Platforms included in the Index (the “Constituent Trading Platforms”) as of December 31, 2025 were Kraken, LMAX Digital, Bitstamp by Robinhood, Crypto.com, Bitfinex, Gemini, OKX, Bullish and Bybit. On January 20, 2026, the Index Provider added Binance and Gate to the Index due to the trading platforms meeting the Index Provider’s conditions for inclusion, and removed Bitfinex due to the trading platform failing to meet the Index Provider’s conditions for inclusion, as part of its scheduled monthly review. The Digital Asset Trading Platforms included in the Index as of December 31, 2024 were Coinbase, Kraken, LMAX Digital, Bitstamp by Robinhood and Crypto.com. See “Item 1. Business—Valuation of BCH and Determination of NAV” in our Annual Report for a description of the Trust’s NAV per Share.

As of December 31, 2025, the Trust had a net closing balance with a value of $231,908,361, based on the Index Price (non-GAAP methodology). As of December 31, 2025, the Trust had a total market value of $231,803,771, based on the Digital Asset Market price of BCH on the Trust’s principal market (Coinbase).

As of December 31, 2024, the Trust had a net closing balance with a value of $169,555,016, based on the Index Price (non-GAAP methodology). As of December 31, 2024, the Trust had a total market value of $169,757,530, based on the Digital Asset Market price of BCH on the Trust’s principal market (Coinbase).