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United States securities and exchange commission logo
November 17, 2023
Leah Wald
Chief Executive Officer
Valkyrie Bitcoin Fund
c/o Valkyrie Digital Assets LLC
320 Seven Springs Way, Suite 250
Brentwood, TN 37027
Re:Valkyrie Bitcoin Fund
Amendment No. 3 to Registration Statement on Form S-1
Filed October 30, 2023
File No. 333-252344
Dear Leah Wald:
            We have reviewed your amended registration statement and have the following
comments.
            Please respond to this letter by amending your registration statement and providing the
requested information. If you do not believe a comment applies to your facts and circumstances
or do not believe an amendment is appropriate, please tell us why in your response.
            After reviewing any amendment to your registration statement and the information you
provide in response to this letter, we may have additional comments. Unless we note otherwise,
any references to prior comments are to comments in our September 29, 2023 letter.
Amendment No. 3 to Registration Statement on Form S-1
General
1.To the extent that you intend to use a fact sheet, please provide us a copy for our review.
2.Please revise to disclose whether and to what extent the Trust, Sponsor, Prime Broker,
Liquidity Providers or any other entity is permitted to loan, pledge or rehypothecate any of
the Trust’s assets.
3.Please describe the AML, KYC and any other procedures conducted by the Trust, the
Sponsor, the Authorized Participants, the Prime Broker, the Liquidity Providers, and the
Custodian to determine, among other things, whether the counter-party in any transactions
is not a sanctioned entity.

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Cover Page
4.Please revise the cover page to identify the initial Authorized Participant, and revise your
disclosure on the cover page and page 74 to identify the initial Authorized Participant as a
statutory underwriter.  Also revise the cover page to disclose the price per Share and that
the Trust is registering an indeterminate number of Shares.
Lukka Prime, page 1
5.Please revise your description of Step 3 on page 2 to clarify what you mean by "decay,"
including what is considered in determining "decay," how the adjusted score is "decayed"
and, to the extent applicable, disclose the decay rate.  For example purposes only, this step
appears to look only at the time passed since the last trade but we note that you disclose
that this step assesses "the level of activity in market by considering the frequency
(volume) of trades" and "reflects freshness of date by tracking most recent trades."
6.We note your disclosure identifies the Index Pricing Sources used as of December 2022.
Please update your disclosure here and throughout to identify the Index Pricing Sources
currently used.
Prospectus Summary
Trust Overview, page 1
7.Please disclose here that the Trust is a passive investment vehicle.  Please also revise to
disclose, if true, that Shareholders have no voting rights.  In this regard, we note your
disclosure on pages 65 that Shareholders have no voting rights under the Trust
Agreement.  We also note your disclosure on page 58 that, "[u]nder the Trust Agreement,
Shareholders have limited voting rights," including, for example, that "the Sponsor will
terminate the Trust upon the agreement of Shareholders owning at least 75% of the
outstanding Shares" and that "any amendment that adversely affects the rights of
Shareholders, appoints a new Sponsor, dissolves the Trust or makes any material change
to the Trust’s basic investment policies or structure must be approved by the affirmative
vote of Shareholders owning at least 50% of the outstanding Shares."  Please revise for
clarity and consistency throughout.
8.Please revise to provide quantitative information that demonstrates the volatility of the
price of bitcoin.
9.Please revise your disclosure here to briefly address the risks associated with the
competition you will face in launching and sustaining your product, including the risk that
your timing in reaching the market and your fee structure relative to other bitcoin ETPs
could have a determinantal effect on the scale and sustainability of your product.
Custody of the Trust's Assets, page 2
10.Please revise to clarify what you mean by your disclosure on page 2 that the Custodian

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will custody the Trust's bitcoin in accounts that are required to be segregated "from time
to time" by explaining what "from time to time" means in this context.  In addition, we
note your disclosure that "[t]he Custodian will keep a substantial portion of the private
keys associated with the Trust’s bitcoin in “cold storage” or similarly secure technology
(the “Cold Vault Balance”), with any remainder of the Vault Balance held as part of a “hot
storage” (the “Hot Vault Balance”)."  Please revise to disclose the percentage of the
private keys that are held in cold storage, and, on page 58, disclose the Custodian's
policies regarding whether and when the private keys are held in cold or hot storage, and
describe the "similarly secure technology."  Also, we note that a portion of the Trust's
bitcoin holdings and cash holdings may be held with Coinbase, the Prime Broker, in
connection with creations and redemptions and with the sale of bitcoin to pay the Trust's
expenses not assumed by the Sponsor.  Please revise to disclose here the Prime
Broker's policies regarding how it will hold the Trust's assets.  In addition, please include
a summary of the insurance coverage of the Custodian and Prime Broker and the degree to
which the insurance policies protect the Trust's assets held by the Custodian and Prime
Broker as well as the Custodian's policies regarding the amount of the Trust's assets
held in each wallet.
Trust Structure, page 2
11.We note your disclosure on page 2 that "[t]he Trust has entered into a prime brokerage
and custody agreement with the Custodian (the “Custody Agreement”), pursuant to which
the Custodian will custody all of the Trust’s bitcoin, other than that which may be
maintained in a trading account with Coinbase from time to time."  Please revise to
clarify, here, if true that the Custodian and Prime Broker are affiliates but not the same
entity.
Trust expenses, page 5
12.Please revise to disclose whether the Trust is responsible for paying any costs associated
with the transfer of bitcoin to the Sponsor or the sale of bitcoin to pay the Additional
Expenses or if such costs are included in the Sponsor's Fee.  Please also disclose whether
any of the Trust's expenses payable by the Sponsor from the Sponsor's Fee are capped.  In
addition, please revise to disclose how the Actual Exchange Rate is calculated.
13.We note your disclosure on page 5 that "[i]f Additional Trust Expenses are incurred, the
Sponsor will cause the Custodian to convert bitcoin into U.S. Dollars or other fiat
currencies."  Please revise to identify the "other fiat currencies."
Risk Factors, page 6
14.Please revise to include a summary of the risk factors section immediately following your
prospectus summary section pursuant to Item 105(b) of Regulation S-K.
15.We note that many of your risk factors address several different risks but only highlight
one risk in the heading.  For example, we note that the first risk factor that begins on page

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Valkyrie Bitcoin Fund
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18 and continues on page 19 currently addresses the risks related to whether the Sponsor
may be subject to additional regulatory requirements under the Investment Company Act
of 1940, increasing regulation in foreign jurisdictions and the risks related to the high
energy usage required for bitcoin mining.  Please revise to divide this risk factor into
several risk factors, including a risk factor with a heading that highlights the risks related
to the environmental impact of bitcoin mining.  In this new risk factor, address the reasons
why bitcoin mining may implicate different risks than other crypto asset mining such as
the differences in proof-of-work and proof-of-stake, and discuss in greater detail the
regulations that states and foreign jurisdictions have passed or are currently considering
that impact crypto asset mining.  Similarly, please revise to include separate risk factors
that specifically highlight the risks related to wash-trading, the existence of bitcoin
"whales" and the concentration in bitcoin ownership, front-running and manipulation.  In
this regard, we note that your disclosure on pages 22 and 23 identifies many of the these
risks in a single risk factor but does not discuss them in detail and does not highlight these
risks in the heading.
Risk Factors Related to the Trust and the Shares
The Shares may trade at a price which is at, above or below the Trust's Bitcoin Holdings per
Share, page 25
16.Please revise to remove the reference to a "riskless profit" as it appears to be inconsistent
with your disclosure regarding the volatility of bitcoin as well as the other risks you
address related to the Bitcoin market in general and the creation and redemption processes
of the Trust.
If the Custody Agreement is terminated or the Custodian fails, page 30
17.Your disclosure on page 30 that the Custodian facilitates the selling of bitcoin by the Trust
to pay the Sponsor's Fee appears to be inconsistent with your disclosure on page 5 that the
Sponsor's Fee is payable in bitcoins.  Please revise for clarity and consistency.
There is no guarantee that an active trading market for the Shares will continue, page 31
18.We note your disclosure on page 31 that "[t]he Sponsor may elect to terminate the Trust if
it determines, in its sole discretion, that the Trust is not an economically viable size, which
could result in the liquidation of the Trust’s bitcoins at a time that is disadvantageous to
Shareholders."  Please revise to quantify or otherwise describe what "economically viable
size" means.
Trust Expenses, page 47
19.Please revise to disclose examples of when the the Sponsor may waive all or a portion of
the Sponsor's Fee, and disclose where the Sponsor will publish the daily calculation of the
fee.  Also disclose whether the Sponsor will use any other means to notify Shareholders of
the "stated periods of time" that it has waived all or a portion of the Sponsor's Fee, and, if

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Valkyrie Bitcoin Fund
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so, how.  Similarly, revise to disclose examples of when the Sponsor may raise the
Sponsor's Fee or decrease the Sponsor-paid expenses, and disclose whether the Sponsor
will use any other means to notify Shareholders, and if so, how.  In this regard, we note
your disclosure in the fifth risk factor on page 31.
20.Please revise to describe the mechanics of how the Custodian will convert the bitcoin into
U.S. Dollars or other fiat currencies, including the roles of the Prime Broker and any other
Service Provider, whether the transfers to any Service Providers in connection with the
sale of the bitcoin will occur on-chain or off-chain, how the Actual Exchange Rate is
determined, the policies regarding where the bitcoin will be sold, who decides where the
bitcoin will be sold and any risks related to the this process.
Use of the Lukka Prime Reference Rate, page 48
21.With reference to the disclosure on page 49 of liability limitations in the last two
paragraphs regarding the Use of the Lukka Prime Reference Rate, the disclosures do not
appear to be consistent with management's obligations with respect to the financial
statements, including the determination of the fair value of assets within those financial
statements under U.S. GAAP.  Please revise or tell us why you believe the statements are
consistent with those obligations.
22.Please disclose whether the Index Provider has an oversight committee that determines the
Index Pricing Sources and evaluates the Index's methodology.  If so, please disclose how
many members are on the committee, how the committee members are selected, how
often the committee meets to consider changes to the Index's methodology and any
changes that have been made to the Index since the creation of the Index.  Please also
disclose any changes that have been made to the Index Pricing Sources since the creation
of the Index and why those changes were made, and please disclose whether, and, if so,
how Shareholders will be notified of changes to the Index's methodology.  In addition,
please provide a brief description of each Index Pricing Source, including where they are
located, how they are licensed or regulated, the aggregate monthly, quarterly or annual
trading volume of BTC/USD markets of each Index Pricing Source and the market share
for BTC/USD trading of each Index Pricing Source.  Further, please briefly describe the
Index Provider's oversight procedures to ensure that the Index is administered pursuant to
its policies for Index integrity.  Also disclose the Index
Provider's procedures if information from one or more of the Index Pricing Sources is
unavailable during a Business Day, and disclose the Index's methodology related to forks
and Incidental Rights.
23.Please revise to expand your description of the five-step weighting process for identifying
the principal exchange for bitcoin and the last price on that exchange.  For example, for
Step 1, describe how the BES is assigned to each Index Pricing Source, how often the
BES is recalculated as we note that it is based on "static exchange characteristics such as
oversight microstructure and technology" and provide a brief description of what you
mean by "microstructure."  For Step 2, describe how the BES is adjusted based on the

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Valkyrie Bitcoin Fund
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"relative monthly volume each exchange services," clarify what you mean by "relative
monthly volume" and disclose how many months are considered in this evaluation.  For
Step 3, clarify what you mean by "decay," and clarify your description of how the
adjusted score is "decayed" as it seems to look only at the time passed since the last trade
but you disclose that it assesses "the level of activity in the market by considering the
frequency (volume) of trades" and "reflects the freshness of data by tracking most recent
trades."  For Step 5, please disclose which "executed exchange price is used to represent
fair market value at 4:00 p.m. ET."
Calculation of NAV, page 49
24.We note your response to prior comment 8.  Please address the following with respect to
your application of ASC Topic 820:
•Provide us with your accounting policy for determining the fair value of bitcoin in
accordance with ASC Topic 820.
•As the trust is expected to primarily transact with the Bitcoin markets through the
Authorized Participant, confirm for us that your determination of the principal market
will be from the perspective of the Authorized Participant.
•Tell us if you and/or your Authorized Participant plan to transact in multiple
markets.  If so, please ensure that your accounting policy reflects that fact and
describes the types of markets in which you and/or your Authorized Participant
expect to transact.  In that regard, we note that ASC 820-10-35-36A includes
definitions of four types of markets (e.g. brokered market, dealer market, exchange
market, and principal to principal market).
•Confirm for us that your principal market will be one which you or your Authorized