The following discussion and analysis of our financial condition and results of operations should be read together with, and is qualified in its entirety by reference to, our unaudited financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this "Quarterly Report"), which have been prepared in accordance with GAAP. The following discussion may contain forward-looking statements based on assumptions we believe to be reasonable. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Quarterly Report, "Cautionary Note Regarding Forward-Looking Statements," and the risks described in Item 1A. "Risk Factors" of the Trust's Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Overview

WisdomTree Bitcoin Fund (the "Trust") is an exchange-traded fund that issues common shares of beneficial interest that are listed on the Cboe BZX Exchange, Inc. under the ticker symbol "BTCW". The Trust is a Delaware statutory trust, formed on March 8, 2021, pursuant to the Delaware Statutory Trust Act. The Trust operates pursuant to the Trust Agreement. The Trust offers Shares only to Authorized Participants in one or more blocks of 5,000 Shares based on the quantity of bitcoin attributable to each Share of the Trust. Each Share represents a fractional undivided beneficial interest in the net assets of the Trust.

The Trust's investment objective is to gain exposure to the price of bitcoin, less expenses and liabilities of the Trust's operations. In seeking to achieve its investment objective, the Trust will hold bitcoin and will value its Shares daily based on the CME CF Bitcoin Reference Rate - New York Variant (the "Reference Rate").

The following discussion and analysis was prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the Trust's financial condition as of September 30, 2026 and its results of operations for the three and nine months ended September 30, 2026 and 2025. It should be read in conjunction with the unaudited financial statements and related notes thereto contained in this Quarterly Report.

Critical Accounting Policies and Estimates

Fair Value Determination

The Trust's investment in bitcoin is recorded on the financial statements at fair value in accordance with ASC 820. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for the asset or liability. ASC 820 defines "principal market" as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity and the reporting entity must have access to the principal (or most advantageous) market at the measurement date. ASC 820 defines "most advantageous market" as the market that maximizes the amount that would be received to sell the asset or minimizes the amount that would be paid to transfer the liability, after taking into account transaction costs and transportation costs. Based on the foregoing, the Trust has determined its principal market for GAAP reporting for its bitcoin investment to be the bitcoin platform operated by Coinbase, Inc. and utilizes an exchange-traded price from that principal market as of 11:59 p.m. Eastern Time on the financial statement measurement date. The Sponsor will perform other procedures (consistent with GAAP) to value an investment in bitcoin when a market quote is not available.

Results of Operations

Selected Financial Highlights for the three and nine months ended September 30, 2026 and 2025

For the Three Months Ended September 30, 2026 Compared to the Three Months Ended September 30, 2025

Net realized and unrealized gain on investment in bitcoin for the three months ended September 30, 2026 was $53,883,882 which includes a net realized loss of $(2,491) on the sale of bitcoin to pay the Sponsor Fee, a net realized gain of $912,981 on the sale of bitcoin to meet redemptions and a net change in unrealized appreciation/depreciation on investment in bitcoin of $52,973,392. Net realized and unrealized gain on investment in bitcoin for the three-month period ended September 30, 2026 was driven by bitcoin price appreciation from $59,101.49 per bitcoin as of June 30, 2026 to $83,697.25 per bitcoin as of September 30, 2026.

Net increase in net assets resulting from operations was $53,786,229 for the three months ended September 30, 2026, which consisted of net investment loss of $(97,653), net realized gain of $910,490 and $52,973,392 net change in unrealized appreciation/depreciation on investment in bitcoin. Net assets increased to $171,942,146 at September 30, 2026 and total return (based on NAV per Share) for the three months ended September 30, 2026 was 41.53%. For the three months ended September 30, 2026, the $35,465,466 net increase in net assets resulted from the aforementioned net increase in net assets resulting from operations partially offset by a $(18,320,763) decrease resulting from capital share transactions.

Bitcoin posted strong gains during the third quarter of 2026, rebounding from significant declines experienced during the first half of the year. The recovery accelerated in August and was supported by renewed investor demand for digital asset products, including substantial net inflows into U.S. spot bitcoin exchange-traded funds. The U.S. Treasury's announcement in August that it would increase its purchases of longer-dated Treasury securities through its liquidity support buyback program also contributed to improving market sentiment. Despite continued geopolitical uncertainty, the Federal Reserve's decision to raise interest rates in September and the failure of the CLARITY Act to advance in the U.S. Senate, bitcoin maintained much of its quarterly gains, reflecting a broader recovery in digital asset markets.

Net realized and unrealized gain on investment in bitcoin for the three months ended September 30, 2025 was $10,822,946 which includes a net realized gain of $46,950 on the sale of bitcoin to pay the Sponsor Fee and a net change in unrealized appreciation on investment in bitcoin of $10,775,996. Net realized and unrealized gain on investment in bitcoin for the three-month period ended September 30, 2025 was driven by bitcoin price appreciation from $107,221.44 per bitcoin as of June 30, 2025 to $114,198.94 per bitcoin as of September 30, 2025.

Net increase in net assets resulting from operations was $10,709,537 for the three months ended September 30, 2025, which consisted of net investment loss of $(113,409), net realized gain of $46,950 and $10,775,996 net increase in unrealized appreciation on investment in bitcoin. Net assets increased to $181,996,514 at September 30, 2025 and total return (based on NAV per Share) for the three months ended September 30, 2025 was 6.44%. For the three months ended September 30, 2025, the $16,123,907 net increase in net assets resulted from the aforementioned net increase in net assets resulting from operations in addition to a $5,414,370 increase resulting from capital share transactions.

Bitcoin posted positive returns in the third quarter of 2025 as supportive regulatory developments related to digital assets in the United States, such as the digital assets market structure bill, the CLARITY Act, and the Anti-CBDC Surveillance State Act progressed, and the passage of the stablecoin-focused legislation, the GENIUS Act. The broader macroeconomic backdrop also lent support, with the restart of the Federal Reserve's easing cycle supporting the appetite for digital asset products.

For the three months ended September 30, 2026, the Trust recorded a net increase in net assets resulting from operations of $53.8 million, compared to $10.7 million for the corresponding period in 2025. This increase was primarily attributable to higher net realized and unrealized gains on bitcoin investments of $53.9 million in 2026, compared to $10.8 million in 2025, reflecting significantly greater bitcoin price appreciation during the third quarter of 2026. Total return (based on NAV per Share) was 41.53% in 2026, compared to 6.44% in 2025. The increase in net assets resulting from operations in 2026 was partially offset by $18.3 million in net redemptions, whereas the corresponding period in 2025 benefited from $5.4 million in net capital share creations.

For the Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025

Net realized and unrealized loss on investment in bitcoin for the nine months ended September 30, 2026 was $(1,317,251) which includes a net realized gain of $12,367 on the sale of bitcoin to pay the Sponsor Fee, a net realized gain of $912,981 on the sale of bitcoin to meet redemptions and a net change in unrealized appreciation/depreciation on investment in bitcoin of $(2,242,599). Net realized and unrealized loss on investment in bitcoin for the nine-month period ended September 30, 2026 was driven by bitcoin price depreciation from $87,418.55 per bitcoin as of December 31, 2025 to $83,697.25 per bitcoin as of September 30, 2026.

Net decrease in net assets resulting from operations was $(1,601,685) for the nine months ended September 30, 2026, which consisted of net investment loss of $(284,434), net realized gain of $925,348 and $(2,242,599) net change in unrealized appreciation/depreciation on investment in bitcoin. Net assets increased to $171,942,146 at September 30, 2026 and total return (based on NAV per Share) for the nine months ended September 30, 2026 was (4.44)%. For the nine months ended September 30, 2026, the $32,255,154 net increase in net assets resulted from a $33,856,839 increase resulting from capital share transactions, partially offset by a $(1,601,685) decrease resulting from operations.

Bitcoin experienced significant volatility during the first nine months of 2026, declining substantially during the first half of the year before rebounding in the third quarter. During the first six months, bitcoin prices faced downward pressure from persistent inflation concerns, elevated interest rates, geopolitical uncertainty and substantial outflows from U.S. spot bitcoin exchange-traded funds. Market sentiment improved during the third quarter, particularly in August and September, as renewed institutional demand, positive fund flows and the U.S. Treasury's announcement of expanded liquidity support buybacks contributed to a recovery in digital asset prices. However, concerns regarding the Federal Reserve's monetary policy outlook and continued uncertainty surrounding digital asset regulation, including the failure of the CLARITY Act to advance in the Senate, remained headwinds. Despite the substantial recovery in the third quarter, bitcoin ended the nine-month period modestly below its December 31, 2025 levels.

Net realized and unrealized gain on investment in bitcoin for the nine months ended September 30, 2025 was $7,954,435 which includes a net realized gain of $164,386 on the sale of bitcoin to pay the Sponsor Fee, a net realized gain of $56,238,619 on the sale of bitcoin to meet redemptions and a net decrease in unrealized appreciation on investment in bitcoin of $(48,448,570). Net realized and unrealized gain on investment in bitcoin for the nine months ended September 30, 2025 was driven by bitcoin price appreciation from $93,358.58 per bitcoin as of December 31, 2024 to $114,198.94 per bitcoin as of September 30, 2025.

Net increase in net assets resulting from operations was $7,540,751 for the nine-month period ended September 30, 2025, which consisted of net investment loss of $(413,684), net realized gain of $56,403,005 and $(48,448,570) net decrease in unrealized appreciation on investment in bitcoin. Net assets decreased to $181,996,514 at September 30, 2025 and total return (based on NAV per Share) for the nine-month period ended September 30, 2025 was 22.10%. For the nine months ended September 30, 2025, the $(178,520,718) net decrease in net assets resulted from the aforementioned net increase in net assets resulting from operations offset by a $(186,061,469) net decrease resulting from capital share transactions.

Bitcoin posted strong gains in the first three quarters of 2025. After experiencing losses early in the year due to a dip in sentiment and the Bybit hack that temporarily fueled crypto-related cybersecurity concerns, bitcoin rebounded in the second and third quarters. Recovering sentiment and the supportive digital assets-related regulatory developments in the United States, such as the adoption of the GENIUS Act, provided tailwinds for digital assets overall. The lead-up to the U.S. federal government shutdown also contributed to a supportive backdrop for bitcoin demand.

For the nine months ended September 30, 2026, the Trust recorded a net decrease in net assets resulting from operations of $1.6 million, compared to a net increase of $7.5 million for the corresponding period in 2025. This change was primarily attributable to a net realized and unrealized loss on bitcoin investments of $1.3 million in 2026, compared to a gain of $8.0 million in 2025, reflecting bitcoin price depreciation during the first nine months of 2026 compared to price appreciation during the corresponding period in 2025. Total return (based on NAV per Share) was (4.44)% in 2026, compared to 22.10% in 2025. Despite the decrease resulting from operations, net assets increased during 2026 due to $33.9 million in net capital share transactions, compared to a $186.1 million decrease resulting from capital share transactions during the corresponding period in 2025.

Net Asset Value

The Trust's NAV per Share is calculated by:

The methodology of the Reference Rate used to value bitcoin for purposes of calculating NAV per Share may not be deemed consistent with GAAP. To the extent the methodology used to calculate the Reference Rate is deemed not to be consistent with GAAP, the Trust will utilize an alternative GAAP-consistent pricing source for purposes of the Trust's periodic financial statements, as further discussed below.

The Trust Administrator calculates the NAV of the Trust once each Exchange trading day. The NAV for a normal trading day will be released after 4:00 p.m. ET. Trading during the core trading session on the Exchange typically closes at 4:00 p.m. ET. However, NAVs are not officially struck until later in the day (often by 5:30 p.m. ET and almost always by 8:00 p.m. ET).

The Sponsor believes that the Reference Rate will be reflective of a reasonable valuation of the average spot price of bitcoin. However, in the event the Reference Rate was not available or determined by the Sponsor to not be reliable, the Sponsor would "fair value" the Trust's bitcoin holdings. The Sponsor does not anticipate that the need to "fair value" bitcoin will be a common occurrence. The Sponsor reserves the right to replace the Reference Rate with another valuation methodology which it believes will accurately track the price of bitcoin. If the Sponsor makes the decision to materially change the valuation methodology or replace either the Reference Rate or CF Benchmarks Ltd. (the "Benchmark Administrator"), the Sponsor will notify shareholders via a posting on the Trust's website, prospectus supplement, post-effective amendment, through a current report on Form 8-K or in the Trust's annual or quarterly reports.

The Sponsor publishes the NAV, NAV per Share and the Trust's bitcoin holdings at www.wisdomtree.com/investments after their determination and availability. Reference Rate data and the description of the Reference Rate are based on information made publicly available by the Benchmark Administrator on its website at https://www.cfbenchmarks.com.

As of September 30, 2026, the Trust had a net closing balance of 2,054.749 bitcoins with a value of $172,027,326 based on the Reference Rate price of $83,721.81, which is calculated pursuant to non-GAAP methodology. As of September 30, 2026, the total market value of the Trust's bitcoin was $171,976,861, based on the price of bitcoin in the principal market of $83,697.25. For the three-month period ended September 30, 2026, the Trust determined that Coinbase, Inc. was its principal market.

The following chart illustrates the movement in the market price per Share and the Trust's NAV per Share for the nine months ended September 30, 2026.

The table below illustrates the high and low price of bitcoin as represented by the Reference Rate and the principal market during the three and nine months ended September 30, 2026.

Liquidity and Capital Resources

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.

The Trust will pay the Sponsor a unified fee of 0.25% per annum (the "Sponsor Fee") as compensation for services performed under the Trust Agreement. The Trust's only ordinary recurring expense is expected to be the Sponsor Fee.

The Sponsor may, at its sole discretion and from time to time, waive all or a portion of the Sponsor Fee for stated periods of time. The Sponsor is under no obligation to waive any portion of its fees and any such waiver shall create no obligation to waive any such fees during any period not covered by the waiver.

The Sponsor Fee is calculated on a daily basis (accrued at 1/365, or 1/366 in a leap year, of the applicable annual Sponsor Fee percentage multiplied by the Trust's NAV) and paid on a monthly basis. To cover the Sponsor Fee, and extraordinary expenses not assumed by the Sponsor, the Sponsor or its delegate will cause the Trust (or its delegate) to instruct the Prime Execution Agent to convert bitcoin held by the Trust into U.S. dollars. Because the Trust does not have any income, it will need to sell bitcoin to cover the Sponsor Fee and expenses not assumed by the Sponsor, if any. The Trust may also be subject to other liabilities (for example, as a result of litigation) that have also not been assumed by the Sponsor. The only source of funds to cover those liabilities is sales of bitcoin held by the Trust. Even if there are no expenses other than those assumed by the Sponsor, and there are no other liabilities of the Trust, the Trust will still need to sell bitcoin to pay the Sponsor Fee. The result of these sales is a decrease in the amount of bitcoin represented by each Share.

To cover the Sponsor Fee and expenses not assumed by the Sponsor, the Sponsor or its delegate will cause the Trust (or its delegate) to convert bitcoin into U.S. dollars at the price available through the Prime Execution Agent. The number of bitcoins represented by a Share will decline each time the Trust pays the Sponsor Fee or any Trust expenses not assumed by the Sponsor by transferring or selling bitcoins. The Trust is responsible for paying any costs associated with the transfer of bitcoin to the Sponsor or the sale of bitcoin. However, under the terms of each Authorized Participant Agreement, the Authorized Participants will be responsible for any brokerage or transaction costs associated with the sale or transfer of bitcoin incurred in connection with the fulfillment of a creation or redemption order.

The Trust's only ordinary recurring expense is expected to be the Sponsor Fee. In exchange for the Sponsor Fee, the Sponsor has agreed to assume the marketing and the following administrative expenses of the Trust: the fees of the Trustee, the Trust Administrator, Fund Accountant, Transfer Agent, and Marketing Agent, the Cash Custodian's Fee, the Bitcoin Custodian's Fee, Exchange listing fees, SEC registration fees, printing and mailing costs, tax reporting fees, audit fees, license fees and ordinary legal fees and expenses. There is no cap on the amount of these Sponsor paid expenses.

The Trust may incur certain non-recurring expenses that are not assumed by the Sponsor, including but not limited to, taxes and governmental charges, any applicable brokerage commissions, financing charges or fees, Bitcoin network fees and similar transaction 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 interests of shareholders (including, for example, in connection with any fork of the Bitcoin blockchain), any indemnification of the Cash Custodian, Bitcoin Custodian, Trust 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 has not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Trust's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to shareholders. The Trust's only source of liquidity is its sales of bitcoin.