section contains additional details about the Fund’s investment
objective, principal investment strategies and related risks.
The Fund seeks
Fund’s investment objective is non-fundamental, meaning it may be changed
by the Board of Trustees (“Board”), without the approval of Fund
Fund seeks to provide capital appreciation primarily through managed
exposure to bitcoin futures contracts. The
Fund does not invest directly in bitcoin.
In seeking to
achieve the Fund’s investment objective, ProShare Advisors LLC (“ProShare
Advisors” or the “Advisor”) takes into consideration, among other things, the
relative liquidity of and costs associated with bitcoin futures contracts as
well as regulatory requirements imposed by the Securities and Exchange
Commission, the CFTC, the listing exchanges and
the Internal Revenue Service. The Fund generally seeks to remain fully invested
at all times in investments that, in combination, provide exposure to bitcoin
futures without regard to market conditions, trends, or direction.
The Fund does not
take temporary defensive positions. The Fund will generally hold its
bitcoin-related investments during periods in which the value of bitcoin and
bitcoin futures are flat or declining as well as during periods in which the
value of bitcoin and bitcoin futures are rising. For example, if the Fund’s
bitcoin-related investments are declining in value, the Fund generally will not
exit its positions except as needed to meet redemption requests.
is a digital asset which serves as the unit of account on an open-source,
decentralized, peer-to-peer computer network. Bitcoin may be used to pay for
goods and services, stored for future use, or converted to a government-issued
currency. As of the date of this Prospectus, the adoption of bitcoin for these
purposes has been limited. The value of bitcoin is not backed by any government,
corporation, or other identified body.
value of bitcoin is determined in part by the supply of (which is limited),
and demand for, bitcoin in the markets for exchange that have been organized to
facilitate the trading of bitcoin. By design, the supply of bitcoin is limited
to 21 million bitcoins. As of the date of this Prospectus, there are
approximately 19 million bitcoins in circulation.
is maintained on the decentralized, open source, peer-to-peer computer network
(the “Bitcoin Network”). No single entity owns or operates the Bitcoin Network.
The Bitcoin Network is accessed through software and governs bitcoin’s creation
and movement. The source code for the Bitcoin Network,
referred to as the Bitcoin Protocol, is open-source, and anyone can
contribute to its development.
infrastructure of the Bitcoin Network is collectively maintained by participants in
the Bitcoin Network, which include miners, developers, and users. Miners
validate transactions and are currently compensated for that service in bitcoin.
Developers maintain and contribute updates to the Bitcoin Network’s source code
often referred to as the Bitcoin Protocol. Users access the Bitcoin Network
using open-source software. Anyone can be a user, developer, or
is maintained on a digital transaction ledger commonly known as a
“blockchain.” A blockchain is a type of shared and continually reconciled
database, stored in a decentralized manner on the computers of certain users of
the digital asset and is protected by cryptography. The Bitcoin Blockchain
contains a record and history for each bitcoin transaction.
bitcoin is created by “mining.” Miners use specialized computer software
and hardware to solve a highly complex mathematical problem presented by the
Bitcoin Protocol. The first miner to successfully solve the problem is permitted
to add a block of transactions to the Bitcoin Blockchain. The new block is then
confirmed through acceptance by a majority of users who maintain versions of the
blockchain on their individual computers. Miners that successfully add a block
to the Bitcoin Blockchain are automatically rewarded with a fixed amount of
bitcoin for their effort plus any transaction fees paid by transferors whose
transactions are recorded in the block. This reward system is the means by which
new bitcoin enter circulation and is the mechanism by which versions of the
blockchain held by users on a decentralized network are kept in
Bitcoin Protocol is an open source project with no official company or group in
control. Anyone can review the underlying code and suggest changes. There are,
however, a number of individual developers that regularly contribute to a
specific distribution of bitcoin software known as the “Bitcoin Core.”
Developers of the Bitcoin Core loosely oversee the development of the source
code. There are many other compatible versions of the bitcoin software, but
Bitcoin Core is the most widely adopted and currently provides the de facto
standard for the Bitcoin Protocol. The core developers are able to access, and
can alter, the Bitcoin Network source code and, as a result, they are
responsible for quasi-official releases of updates and other changes to the
Bitcoin Network’s source code.
because bitcoin has no central authority, the release of updates to the
Bitcoin Network’s source code by the core developers does not guarantee that the
updates will be automatically adopted by the other participants. Users and