Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the Trust's financial condition and results of operations should be read together with, and is qualified in its entirety by reference to, the Trust's unaudited financial statements and related notes included elsewhere in this Quarterly Report, which have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). The following discussion may contain forward-looking statements based on assumptions the Trust believes to be reasonable. The Trust's actual results could differ materially from those discussed in these forward-looking statements. See "Statement Regarding Forward-Looking Statements" above.

You should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, the Trust and the Sponsor undertake no obligation to publicly update or revise any forward-looking statements or the risks, uncertainties or other factors described in this Quarterly Report, as a result of new information, future events or changed circumstances or for any other reason after the date of this Quarterly Report.

Trust Overview

The Trust's registration statement on Form S-1 relating to its continuous public offering of Shares was declared effective by the U.S. Securities and Exchange Commission on September 24, 2026 and the Shares of the Trust were listed on the Exchange on September 29, 2026.

Prior to the commencement of operations on September 28, 2026, on July 28, 2026, BAM purchased 8 Shares at a per-share price of $25.00 for $200.00 in a transaction exempt from registration under Section 4(a)(2) of the 1933 Act (the "Seed Shares"). On September 28, 2026, BAM redeemed the entirety of its 8 Seed Shares for $200 and Bitwise Investment Manager, LLC ("BIM"), an affiliate of the Sponsor, purchased the initial 20,000 Shares of the Trust (the "Seed Baskets") for $500,000, at a per-Share price of $25.00.

The Trust is an exchange-traded product that issues common shares of beneficial interest ("Shares") that are listed on NYSE Arca, Inc. (the "Exchange") under the ticker symbol "NRR." The Trust's primary investment objective is to seek to provide exposure to the value of NEAR held by the Trust, less the expenses of the Trust's operations and other liabilities. The Trust's secondary investment objective is to seek to derive additional NEAR through staking. In seeking to achieve its primary investment objective, the Trust will hold NEAR and establish its net asset value ("NAV") by reference to the CME CF NEAR Protocol-Dollar Reference Rate - New York Variant (the "Pricing Benchmark"). The Trust is sponsored and managed by Bitwise Investment Advisers, LLC (the "Sponsor").

The net assets of the Trust and its Shares are valued on a daily basis with reference to the Pricing Benchmark, a standardized reference rate published by CF Benchmarks Ltd. (the "Benchmark Provider") that is designed to reflect the performance of NEAR in U.S. dollars. The Pricing Benchmark is calculated by the Benchmark Provider based on an aggregation of executed trade flow of major NEAR trading platforms ("Constituent Platforms"). The Pricing Benchmark is calculated as of 4:00 p.m. Eastern time ("ET").

Coinbase Custody Trust Company, LLC ("Coinbase Custody" or the "NEAR Custodian") serves as the custodian for the Trust's NEAR holdings and is responsible for the secure safekeeping of the Trust's NEAR pursuant to a custody agreement (the "NEAR Custody Agreement"). Coinbase Custody was appointed by the Sponsor and is tasked with establishing and maintaining segregated accounts to hold the Trust's NEAR (the "Trust NEAR Accounts"). The NEAR Custodian is a limited-purpose trust company chartered by the New York State Department of Financial Services that provides custody services for digital assets. The NEAR Custodian is not insured by the Federal Deposit Insurance Corporation (the "FDIC") but carries insurance provided by private insurance carriers.

One or more of the Trust NEAR Accounts, designated as the "Trust Staking Account(s)," permits the NEAR held therein to be staked pursuant to the Trust's secondary investment objective. In consideration for permitting its NEAR to be held in the Trust Staking Account(s), the Trust will receive a portion of the additional NEAR earned through the staking. The Sponsor will select one or more trusted staking agents (the "Staking Agents"). Such Staking Agents operate the validators to which the Trust's NEAR has been delegated for staking.

NEAR is a digital asset. Like all digital assets, buying, holding and selling NEAR is very different from buying, holding and selling more conventional investments like stocks and bonds. Stocks represent ownership in a company, entitling shareholders to a portion of the company's profits. Bonds are debt instruments issued by corporations or governments, where the bondholder is a creditor to the issuer that is generally entitled to a stream of income payments. Ownership of stocks and bonds is typically recorded through a centralized system managed by brokers, custodians or clearinghouses. Ownership of NEAR does not entitle its holders to any portion of a company's profits or any stream of income payments. NEAR is a decentralized digital asset and ownership of it is reflected on a decentralized ledger.

The Trust will not use derivatives that could subject the Trust to additional counterparty and credit risks. The Sponsor believes that the design of the Trust will enable certain investors to more effectively and efficiently implement strategic and tactical asset allocation

strategies that use NEAR by investing in the Shares rather than purchasing, holding and trading NEAR directly.

Results of Operations^

For the period from September 28, 2026 (commencement of operations) through September 30, 2026*

1. Net assets in the above table are calculated in accordance with U.S. GAAP based on the principal market price for NEAR that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date.

During the period September 28, 2026 (commencement of operations) through September 30, 2026, the Trust's net assets increased from $200 on September 28, 2026 (commencement of operations) to $52,003,884 on September 30, 2026. The increase in the Trust's net assets resulted primarily from additions of 9,811,856.9692 NEAR with a value of $50,531,225 in connection with Share creations, and 13.2579 NEAR received from Staking Rewards, with a value of $70 during the period. For the period, there were no dispositions of NEAR from the Trust.

Net investment income (loss) for the period September 28, 2026 (commencement of operations) through September 30, 2026 was $(737) which included income from Staking Rewards of $105 and expenses of $842. Total expenses for the period September 28, 2026 (commencement of operations) through September 30, 2026 were $842, which included $807 in Sponsor Fee and $35 in Staking Fees.

Net realized and change in unrealized gain on investment in NEAR for the period September 28, 2026 (commencement of operations) through September 30, 2026 was $1,478,485, which included a realized gain of $3 from the transfer of NEAR for staking activities, and a change in unrealized appreciation on investment in NEAR of $1,478,482. Net realized and change in unrealized gain on investment in NEAR for the period resulted primarily from NEAR price appreciation from $4.79 on September 28, 2026 (commencement of operations) to $5.38 on September 30, 2026. Net increase in net assets resulting from operations for the period September 28, 2026 (commencement of operations) through September 30, 2026 was $1,477,748, which consisted of the net realized and unrealized gain (loss) on investment in NEAR and net investment (loss) of $737.

* No comparative period presented as the Trust commenced operations September 28, 2026.

Net Assets

As of September 30, 2026*, the Trust held a net closing balance of 9,811,870.2271 NEAR with a total market value of $52,787,862 based on the NEARUSD_NY price of $5.38 used to determine the Trust's NAV. The total market value of the Trust's NEAR held was $52,009,780 based on the price of NEAR (Lukka Prime Rate) in the principal market (Coinbase) of $5.30, used to determine the Trust's Principal Market NAV.

Liquidity and Capital Resources

The Trust agreed to pay the unitary Sponsor Fee of 0.75% per annum of the Trust's NEAR holdings. As a result, the only ordinary expense of the Trust is expected to be the Sponsor Fee. In exchange for the Sponsor Fee, the Sponsor has agreed to assume and pay the normal operating expenses of the Trust, which include the Trustee's monthly fee and out-of-pocket expenses, the fees of the Trust's regular service providers (Cash Custodian, NEAR Custodian, Prime Execution Agent, Marketing Agent, Transfer Agent and Administrator), exchange listing fees, tax reporting fees, SEC registration fees, printing and mailing costs, audit fees and up to $500,000 per annum in ordinary legal fees and expenses. The Sponsor may determine in its sole discretion to assume legal fees and expenses of the Trust in excess of $500,000 per annum. The Sponsor will also pay the costs of the Trust's organization.

The Trust may incur certain extraordinary, non-recurring expenses that are not assumed by the Sponsor, including, but not limited to, taxes and governmental charges, any applicable brokerage commissions, financing fees, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the Shareholders (including, for

example, in connection with any fork of the NEAR Protocol, any Incidental Rights (as defined below) and any IR Asset (as defined below)), any indemnification of the Cash Custodian, NEAR Custodian, Prime Execution Agent, Transfer Agent, Administrator or other agents, service providers or counterparties of the Trust, and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters.

The Trust does not hold a cash balance except in connection with the creation and redemption of Baskets (blocks of 10,000 Shares) or to pay expenses not assumed by the Sponsor. To pay for expenses not assumed by the Sponsor that are denominated in U.S. dollars, the Sponsor, on behalf of the Trust, may sell the Trust's NEAR as necessary to pay such expenses. The cash proceeds of the sale will be sent to the Sponsor, which will use such proceeds to pay the expenses. Any remaining cash will be distributed back to the Cash Custodian. The Sponsor expects that the Trust will have an immaterial amount of cash flow from its operations and that its cash balance will be insignificant at the end of each reporting period. The Trust's only sources of cash are proceeds from the sale of Baskets and NEAR. The Trust will not borrow to meet liquidity needs.

On September 28, 2026 (commencement of operations), the Trust began staking its NEAR pursuant to staking arrangements with the Staking Agent and earns Staking Rewards in the form of additional NEAR. The amount of Staking Rewards received by the Trust is influenced by factors including NEAR Protocol conditions, protocol-level reward rates, the amount of NEAR held by the Trust and the portion of the Trust's NEAR that is staked, and the Trust does not expect Staking Rewards to be earned at a consistent rate. Staking also introduces operational and liquidity considerations, including that NEAR that has been unstaked is not transferable for the unstaking period required under NEAR Protocol rules and the Trust's dependence on its Staking Agent for the execution of staking activities.

Pursuant to the Trust's staking arrangements and the Trust Agreement, a portion of gross Staking Rewards, equal to 33% of the additional NEAR generated by the staking of the Trust's NEAR, is allocated among the Staking Agent and the Sponsor (the "Staking Expenses"), with the remainder retained by the Trust. Staking Rewards retained by the Trust increase the Trust's NEAR holdings, while distributions or sales of NEAR reduce the Trust's NEAR holdings. The Trust may distribute Staking Rewards (in NEAR or cash from the sale of NEAR) to shareholders at the Sponsor's discretion and subject to the Trust Agreement.

Under normal circumstances, the Sponsor anticipates that it will engage in staking with respect to all of the Trust's NEAR, except for NEAR held in the Liquidity Reserve and pursuant to other short-term and temporary exigencies. Under current NEAR Protocol rules, unstaked NEAR is subject to an unstaking period of two to four epochs (each epoch is targeted to last approximately seven to twelve hours) before it becomes freely transferable and, under normal market conditions, the unstaking period is expected to be approximately 48 hours.

Accordingly, the Trust intends to meet Redemption Orders on a "T+2" basis. At the outset of the Trust, the Liquidity Reserve, which is composed of an amount of unstaked NEAR that is freely transferable and may be used to satisfy Redemption Orders, is expected to be composed of approximately 0% of the Trust's NEAR holdings, although the Sponsor may change the amount of NEAR comprising the Liquidity Reserve in its sole discretion pursuant to the Liquidity Policies. However, there may be circumstances in which the unstaking period lasts longer than two days, impairing the Trust's ability to satisfy Redemption Orders on a T+2 basis. This means that the Trust will not be able to make redemption distributions on the second business day following a properly submitted and accepted Redemption Order, without taking additional action. This risk is especially heightened during periods of heightened market volatility. A circumstance where the Trust was unable to satisfy Redemption Orders could have significant negative consequences for the Trust. Disruptions to the Trust's creation and redemption mechanism could widen the bid-ask spreads for the Shares or cause Shares to trade at an increased premium or discount to NAV.

Although the Sponsor monitors and manages liquidity risk pursuant to the Liquidity Policies, there remains a possibility that Redemption Orders could exceed the unstaked NEAR available for immediate withdrawal. In such cases, the Sponsor may delay settlement of a Redemption Order (i.e., long settle the Redemption Order) or temporarily suspend the right of redemption entirely. Monitoring and risk management procedures, while designed to mitigate such risks, cannot eliminate them entirely, particularly in the event of extreme or unforeseen market conditions, sudden spikes in Redemption Orders, or operational disruptions. There is no assurance that the Sponsor's Liquidity Policies will prove successful and that there may be times when the Trust may delay settlement of a Redemption Order or temporarily suspend the right of redemption entirely. While pursuant to the terms of the Authorized Participant Agreements the Trust may have the ability to defer settlement for a certain time if there are insufficient unstaked assets to meet Redemption Orders (long settlement), there can be no assurance that this will be sufficient to meet all Redemption Orders or that the Trust's contractual long settlement right will be adequate to meet the Trust's settlement obligation to Authorized Participants. If not, the Trust could be in default to such Authorized Participants. As a result, investors may still face delays or restrictions on redemptions if the volume of requests surpasses the Trust's available unstaked NEAR, or the Trust could face penalties, costs, damages, or other losses in connection with its settlement obligations to Authorized Participants, which could adversely affect the value or liquidity of, or cause losses in connection with an investment in the Shares. If Authorized Participants are unable to reliably redeem Baskets within the expected timeframe, they may decline to provide such services to the Trust, which would cause additional increases in bid-ask spreads and larger premiums and discounts. Furthermore, the Sponsor and the Trust's service providers could face reputational and regulatory scrutiny which could

ultimately have a negative impact on the Trust. Investors seeking an investment that is not subject to heightened liquidity risk should not purchase Shares.

In the event that the Trust is not able to unstake an amount of NEAR sufficient to meet Redemption Orders received by the Trust, pursuant to the Liquidity Policies, the Trust may utilize a Contingent Liquidity Arrangement. Under such an arrangement, the Trust may enter into a credit facility that allows the Trust to borrow cash or NEAR to meet its current obligations. If the Trust draws cash or NEAR under any such credit facility, the Trust may incur additional expenses in the form of interest on its indebtedness or other costs of borrowing. In addition, the Sponsor, on behalf of the Trust, may seek to engage in a transaction with a third-party pursuant to which the Trust will exchange staked NEAR (that will be freely transferable upon completion of the unstake period) ("Moderately Liquid NEAR") for NEAR that is unstaked and freely transferable ("Highly Liquid NEAR"). The Highly Liquid NEAR that the Trust receives in this transaction will be used to satisfy the applicable Redemption Orders. The amount of NEAR sold by the Trust under such circumstances will be the minimum necessary to satisfy the applicable Redemption Orders. Such trades are expected to occur at a spread, requiring the Trust to deliver a greater quantity of Moderately Liquid NEAR in order to receive an equivalent amount of Highly Liquid NEAR.

The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs.

Off-Balance Sheet Arrangements and Contractual Obligations

As of September 30, 2026, the Trust has not used, nor does it expect to use in the future, special purpose entities to facilitate off-balance sheet financing arrangements and has no loan guarantee arrangements or off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions related to certain risks service providers undertake in performing services which are in the best interests of the Trust. While the Trust's exposure under such indemnification provisions cannot be estimated, these general business indemnifications are not expected to have a material impact on the Trust's financial position.

Sponsor Fee payments made to the Sponsor are calculated at an annual rate of 0.75% of the Trust's NEAR holdings. As such, the Sponsor cannot anticipate the payment amounts that will be required under these arrangements for future periods since the Trust's holdings of NEAR will vary in the normal course of business operations.

No material changes have occurred during the period from September 28, 2026 (commencement of operations) through September 30, 2026.

Critical Accounting Policies

The financial statements and accompanying notes are prepared in accordance with U.S. GAAP. The preparation of these financial statements relies on estimates and assumptions that impact the Trust's financial position and results of operations. These estimates and assumptions affect the Trust's application of accounting policies. Below is a summary of accounting policies on cash, investment valuation and investment company considerations. There were no material estimates involving a significant level of estimation uncertainty that had or are reasonably likely to have had a material impact on the Trust's financial condition used in the preparation of the financial statements. In addition, please refer to Note 2 to the Financial Statements included in this report for further discussion of the Trust's accounting policies.

Cash

Cash represents cash deposits held at financial institutions and Digital Asset exchanges. Cash in a bank deposit account, at times, may exceed U.S. federally insured limits. The Trust has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on such bank deposits.

Staked NEAR and Staking Rewards

NEAR held by the Trust is delegated through Attestant, Ltd., an affiliate of the Sponsor (the "Staking Agent"), to the NEAR Protocol ("staked") for purposes of validating a node or multiple nodes on the network. NEAR staked on the NEAR Protocol receives rewards in the form of NEAR ("Staking Rewards"). Staking Rewards are variable and will accrue to the benefit of the Trust, net of delegator fees. NEAR Staking Rewards are measured at fair value on the date they are accrued. Under current NEAR Protocol rules, NEAR that has been unstaked is subject to an unstaking period of two to four epochs (each epoch is targeted to last approximately seven to twelve hours), during which it ceases to earn Staking Rewards and cannot be transferred. Under normal market conditions, the unstaking period is expected to be approximately 48 hours.

Under normal circumstances, the Sponsor anticipates that it will engage in staking with respect to all of the Trust's NEAR, except for NEAR held in the "Liquidity Reserve," which is the portion of the Trust's NEAR holdings that are unstaked and are freely transferable

and available to meet redemptions. As of September 30, 2026, the Trust does not intend to utilize the Liquidity Reserve. The Trust intends to stake 100% of the Trust's NEAR. Because the Trust anticipates staking substantially all of its NEAR holdings, the Trust has adopted liquidity risk policies and procedures (the "Liquidity Policies") to monitor and manage the Liquidity Reserve. These policies and procedures are reasonably designed to ensure that the Trust is able to satisfy redemptions without incurring the risk of significant dilution of the remaining Shareholders' interest in the Trust.

Staking Rewards are earned by the Trust in NEAR, which is a non-cash consideration, as the validator with whom the Trust has staked its NEAR validates transactions on the NEAR Protocol. The Trust has concluded that the validator is the principal to the validation activities giving rise to the Staking Rewards and, therefore, the Trust recognizes only the net amount (i.e., net of the Staking Rewards retained by the validator) of NEAR to which it is entitled for staking its NEAR with the validator.

Investment Valuation - Principal Market Net Asset Value ("NAV")

To determine which market is the Trust's principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust's net asset value in accordance with U.S. GAAP ("Principal Market NAV" and "Principal Market NAV per Share"), the Trust follows ASC Topic 820-10, Fair Value Measurement, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for NEAR in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Trust to assume that NEAR is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.

The Trust only receives NEAR in connection with a creation order from the Authorized Participant (or a Liquidity Provider) and does not itself transact on any Digital Asset Markets. Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets. The Authorized Participant(s), or a Liquidity Provider, may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets ("Trading Platform Markets"), each as defined in the FASB ASC Master Glossary (collectively, "Digital Asset Markets").

In determining which of the eligible Digital Asset Markets is the Trust's principal market, the Trust reviews these criteria in the following order:

First, the Trust reviews a list of Digital Asset Markets that are U.S. accessible, have historically provided publicly available data, and are exchanges that Bitwise normally transacts on. Specifically, the Trust utilizes a third-party valuation vendor, Lukka, Inc., to identify publicly available, well established and reputable crypto asset exchanges selected in its sole discretion.

Second, Lukka, Inc. sorts these Digital Asset Markets from high to low by market-based volume and level of activity of NEAR traded on each Digital Asset Market. For the period from September 28, 2026 (commencement of operations) through September 30, 2026, this sort was performed for Digital Asset Markets for the period mid-August through mid-September 2026.

Third, Lukka, Inc. then reviews pricing fluctuations and the degree of variances in price on each Digital Asset Market during the 60 minutes prior to 4:00 p.m. ET for NEAR to identify any material variances that may impact the volume or price information of a particular Digital Asset Market.

Fourth, Lukka, Inc. then selects a Digital Asset Market as its principal market based on the highest market-based volume level of activity and price stability in comparison to the other Digital Asset Markets on the list.

As of September 30, 2026, Lukka, Inc. included Binance, Bitfinex, Bitflyer, Bitstamp, Bullish, Bybit, Coinbase, Crypto.com, Gate.io, Gemini, HitBTC, Huobi, Kraken, KuCoin, LMAX, MEXC Global, OKX and Poloniex as its primary Exchange Markets under consideration.

At September 30, 2026, the principal market and the principal market price for NEAR, which is composed of the majority of the Trust's assets as of September 30, 2026, was Coinbase with a price of $5.30. This quoted price is an unadjusted price in an active market for identical NEAR.

The Trust determines its principal market (or in the absence of a principal market the most advantageous market) annually and conducts a quarterly analysis to determine (i) if there have been recent changes to each Digital Asset Market's trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Trust has access to, or (iii) if recent changes to each Digital Asset Market's price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Trust's determination of its principal market.

The cost basis of the NEAR received by the Trust in connection with a creation order is recorded by the Trust at the fair value of NEAR 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.

Investment Company Considerations

The Trust is an investment company for U.S. GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services - Investment Companies. The Trust uses fair value as its method of accounting for NEAR in accordance with its classification as an investment company for accounting purposes. The Trust is not a registered investment company under the Investment Company Act of 1940. U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and these differences could be material.

Please refer to Note 2 to the financial statements included in this Quarterly Report for further discussion of the Trust's Significant Accounting Policies.