Initiating Coverage: Bitcoin Inv Trust at Underperform; Bubble Trouble

Equity Research
Investment Trusts Initiating Coverage
February 09, 2018 Initiating Coverage
Ticker Rating Target Price Current Price
GBTC UNDERPERFORM $8.35 $13.95 - - - -
Initiating Coverage: Bitcoin Inv Trust at Underperform;
Bubble Trouble
Chris Brendler
cbrendler@buckresearch.com
212-682-4938
Investment Opinion:
We are initiating coverage of the Bitcoin Investment Trust (GBTC) at Underperform with an $8.35 target price, representing 40%
downside from current levels. Our bearish view is based on (1) GTBC's significant premium to underlying NAV which we view as
unsustainable as cryptocurrency (CC) speculation cools and additional retail investment options become available, and (2) despite a
~40% crash in Bitcoin prices YTD (and ~55% from peak), we believe the 4Q17 run-up had all the classic signs of an asset bubble that
hasn't fully popped. Although we see long-run potential for CCs and very much is unknown at this early stage, we believe Bitcoin today
is overvalued in all but the most optimistic scenarios. Please see pages 2-50 of the attached presentation for our full detailed analysis.
Valuation:
Our $8.35 TP is based on our "fair value" premium and NAV estimate of +10% / $7.59 respectively. Our 10% premium target is
based on (1) investor convenience, security and peace of mind that GBTC provides investors vs. investing directly with cryptocurrency
exchanges (+10%), (2) annual mgmt fee charged by Greyscale Investments (-2%) and (3) our estimate of typical transaction/funding costs
associated with investing in cryptocurrencies directly (+2%). Currently, shares of GBTC trade at $13.95, representing a 70% premium
to NAV and a 19% premium to the historical average of 52%.
Key Points:
GBTC Premium Seems Unsustainable: As the only U.S. exchange-traded Bitcoin-based equity, GBTC shares trade at a big premium to
NAV. With Bitcoin's eye-popping gains sparking mass investor interest (and regulatory attention), we expect the investment landscape
to grow as it matures. As CC investment options broaden, GBTC's scarcity-based premium should dissipate.
Bubble of All Bubbles: Even after the recent sell-off, we still see a classic asset bubble with many unique characteristics (digital, global,
mobile, hard to value) that give the Bitcoin bubble staying power. Although the dramatic decline (recently down as much as 75% from
Dec highs) has spooked many retail investors, we still see conditions ripe for inflated valuations and recommend hedged positions.
Regulation Expanding: Until recently, CC regulation has been sporadic and largely accommodating, but the 4Q bubble and related
explosion of initial coin offerings (ICOs) has catalyzed government reaction. The crackdown has been in China, where new rules have
effectively banned CC's with an unclear impact on the market. While regulation from South Korea and the U.S. will likely continue to
be gradual, we worry that the most compelling use cases (government avoidance) inevitably invite stricter controls even in the U.S.
Usage Drives Value: While CCs are notoriously hard to value (no earnings, cash flow), we believe long-term value creation is driven
by fundamental use cases. Today, we believe most transaction volume is speculation/investment and real use cases remain unclear.
While blockchain technology is revolutionary, CCs don't necessarily have massive value. With Bitcoin in particular, the opposite appears
true as inflated transaction costs have undermined payments adoption.
Skeptical On Scarcity: Cryptocurrency demand is also being driven by perceived scarcity and FOMO (fear of missing out) with the
primary rationale being "got to buy today before they are all gone". We see this view as flawed. Although most coins have issuance caps
(21M for Bitcoin), 2017 proved there is no limit to the number of CCs with over 1,500 today and a projected 2,500 by year end 2018. At
this early stage, it is nearly impossible to pick winners, but key structural disadvantages, we expect Bitcoin's leadership status to fade.
Fascinating Technology, Still Early: Despite our bearish views on GBTC and Bitcoin, we do see long-term potential and believe most
institutional investors are too dismissive of cryptoassets (CCs are a misnomer). In our view, initial coin offerings break capital raising
barriers and accelerate/democratize innovation. With so much capital and tech talent investing in the sector, we agree there is long-
run potential. However, it is exceedingly difficult to pick winners this early especially when current prices already imply pie-in-the-sky
adoption curves. Still, we're big fans of "network effects" and recommend paying attention to this fascinating technological innovation.
Important disclosure information (relative to FINRA Rule 2241) about The Buckingham Research Group's rating system,
risks, potential conflicts of interest and Analyst Certification appears on pages 51 - 52 of this material (or contact your
investment representative). This report should be used as only a single factor in making investment decisions.

Chris Brendler
cbrendler@buckresearch.com
(212) 682-4938
Bitcoin Investment Trust (GBTC)
Structurally Overvalued In More Ways Than One
Initiating Coverage at UNDERPERFORM
Target Price: $8.35
Equity Research | February 2018Financial Technology | Specialty Finance

3
GBTC | Introduction: Why Bitcoin, Crypto and GBTC?
 Why Cryptocurrencies?
1. Revolutionary new technology that has only tapped a fraction of limitless potential (Internet 1.0)
2. Eventual regulation lays foundation for institutional investment opportunities, compelling ideas
3. Extreme volatility as investors rush to find the next Bitcoin but time horizons are long (like biotech)
4. Depth of disclosure: most blockchains are public so tons of data to analyze, trade, and invest on
5. Constant, easy-to-trade news flow with lots of misinformation, exaggerated reports, mispricings
6. Increasingly liquid crypto-exchanges, institutional platforms scaling and asset class developing
7. Hot sector after 4Q run, everyone is interested and no one really knows that much yet
 Why GBTC?
1. Only public Bitcoin investment vehicle today, best way to express our crypto-market view
2. Trades enough to provide sufficient liquidity, futures contracts add additional trading opportunities
3. Significant premium to NAV creates compelling short opportunity against Bitcoin & select alt-coins
 Cryptocurrencies Research Coverage Opportunity
1. We’re already familiar with Bitcoin, very in tune with the payments implications
2. Recent bubble rekindled investor interest, unique opportunity to add value in relatively new sector
3. Crypto is pure Fin Tech and we want to be early given incredible potential and growing legitimacy
Source: Buckingham Research Group

4
GBTC | Initiating Coverage at UNDERPERFORM
Source: Buckingham Research Group, Bloomberg
 GBTC Clearly Overvalued: Trading at a +70% Premium To NAV
1. GBTC trades at a significant premium to NAV due to its current status as the only retail BTC play
2. Premium has persisted but should dissipate as additional trusts and ETFs come to market
3. Short interest has increased, expensive to borrow at this point
 Futures Provide Institutional Opportunity To Pair Trade GBTC
1. Recently launched CBOE and CME bitcoin futures provide liquid way to create long BTC positions
2. Bitcoin futures also provide less expensive way to hedge long alt-coin positions

5
GBTC | Target Price $8.35 Based on 10% Premium to NAV
 Although we currently view Bitcoin as overvalued, our GBTC target price is premium only
 Confident Bitcoin is also overvalued but after the sharp sell-off, not as clear. Hard to value today
 Our “fair value” premium estimate of 10% is based on the following:
1. -2% for annual mgmt fee charged by Greyscale Investments on shares of GBTC
2. +2% for transaction/funding costs associated with buying/trading cryptocurrencies elsewhere
3. +10% for investor convenience, security and peace of mind investing in trad’l investment vehicle
 GBTC rather unique among closed-end funds, 10% one the highest among other asset
classes
Source: Buckingham Research Group, AIC, Morningstar,
Bloomberg, Greyscale Investments, Blockchain.info
Advantages of GBTC vs. BTC GBTC Bitcoin
Built-in Securityand Storage Y N
Titled Security Y N
IRA-Eligible Y N
Sponsored by a Trusted Manager Y N
Discount / Premium %
Sector: 2007 2017
Bitcoin Investment Trust (GBTC) N/A 49.12%
Asia Pacific -8.65% -7.96%
Europe (Average) -6.94% -4.19%
Flexible Investment -5.51% -6.33%
Global (Average) -9.08% -3.80%
Japan (Average) -8.83% -1.94%
North America -9.71% -9.17%
Private Equity -6.21% -12.00%
Property Direct - Asia Pacific 15.46% -18.42%
Property Direct - U.K. -27.20% 1.98%
Sector Specialist: Biotech & Healthcare -5.54% 5.96%
Sector Specialist: Commodities & Natural Resources -10.28% -13.40%
Sector Specialist: Infrastructure 0.52% 11.51%
Overall Weighted Average (ex VCTs & GBTC) -9.01% -3.10%

6
GBTC | Cryptocurrency Market View: BBOAT
 Despite +55% correction since the December peak, we’re bearish here:
1. Biggest Bubble Of All Time (BBOAT), Bitcoin still overvalued even after 55% ↓
2. Accelerating consumer interest and ICO craziness support BBOAT view
3. Regulatory response accelerating around the world, U.S. is coming soon
4. Use cases exaggerated; even Bitcoin has failed in its original payments function
5. Questionable store of value, scarcity fleeting with cryptoasset explosion
6. Initial regulations likely to be reasonable, but next round will be harsher as
most compelling use cases for CCs center around government avoidance
 Catalysts:
1. Regulation coming fast -- China, South Korea, India and possibly the U.S. (slow)
2. Further declines in Bitcoin’s cryptocurrency dominance, down to 40% from 90%
3. Additional fraud, scams, market manipulation accusations and criminal charges

7
GBTC | Constructive On Select Crypto-ASSETs Long-Term
Source: Buckingham Research Group, Company Filings
 Crypto-“Currencies” Misnomer; Most Are Crypto-“Assets” – Not Meant To Replace Cash
 Even Bitcoin has morphed from an online payment system to the backbone of the crypto world
 Most investors very skeptical, retail has driven recent boom and bust, institutions are still bearish
 Blockchain-Powered Decentralized Apps; Biggest Technical Innovation Since The Internet
1. Beyond just payments (bitcoin), new cryptocurrencies use blockchain technology to create dapps
2. Decentralized apps (dapps) are game changers, some compelling use cases only possible with CCs
3. Bitcoin’s first-mover advantage, network effects. No longer payments, The Reserve Cryptocurrency
4. Increased legitimacy, Wall Street rushing to the party. New asset class may become self-fulfilling
5. Sustainable Bubble? Global demand and instant 24/7 access has potential to give this bubble legs
6. Significant price correction, GBTC down ~60% since December peak
 Valuations Stretched Beyond Best Case Scenarios, We’re Bearish Here But Intrigued
1. BBOAT: compelling evidence of classic asset bubble – even after 55% correction
2. Still waiting consumer adoption, very hard to pick winners today as it is way too early
3. Bitcoin’s unique status as a store of value, but scarcity seems fleeting with so many CCs
4. Regulation is coming; China already moving aggressively, South Korea crack down. U.S. next?
5. Most compelling use case is gov’t avoidance -- regulatory risk will only increase with success

8
Cryptocurrency Comp Sheet
Source: coincap.io
LOGO SYMBOL NAME USD Price MKT CAP $M Max Cap $M MAX SUPPLY TYPE BASED ON USE CASE FEATURES
Decentralized
Exchange
BLOCKCHAIN PROOF TYPE
BTC BITCOIN $ 7,955.9 134,088 167,074 21,000,000 CURRENCY N.A. Payments
First Blockchain
technology. Longest
chain
N.A. YES PoW
ETH ETHEREUM $ 791.44 77,164 - N.A. PLATFORM N.A. Computing
Smart contracts
platform already widely
used
YES YES PoW
XRP RIPPLE $ 0.78 30,255 77,558 38,305,873,865 CURRENCY N.A. Interbank Transfers
For bank transfers, not
just crypto. Private
N.A. YES PoW
BCH BITCOIN CASH $ 1,210.79 20,532 25,427 21,000,000,000 CURRENCY N.A. Payments
Bitcoin fork with larger
block size
YES PoW
ADA CARDANO $ 0.35 8,981 15,588 45000000000 PLATFORM N.A. Computing Internet of blockchains Yes PoS
XLM STELLAR LUMENS $ 0.35 6,542 - 102,999,345,256 CURRENCY N.A. Interbank Transfers
Bank transfers like
ripple, but
decentralized
JUST FIAT AND
BITCOIN
YES PoW / PoS
LTC LITECOIN $ 143.67 7,921 12,068 84,000,000 CURRENCY N.A. Payments
Segwit activated, 2 min
confirms instead of 10
N.A. YES PoW
EOS EOS $ 8.19 5,381 8,185 1,000,000,000,000 CURRENCY N.A. Payments
New Economy, common
currency for a better
word
N.A. YES PoI
MIOTA IOTA $ 1.73 4,822 4,822 2,780,000,000 CURRENCY N.A. Payments
High txn/sec for the
Internet of Things. Uses
tangle, not blockchain
N.A. NO TANGLE
DASH DASH $ 583.92 4,597 11,036 18,900,000 CURRENCY N.A. Payments Anonymity, privacy N.A. YES PoW / PoS
TRX TRON $ 0.04 2,320 - N.A. CURRENCY N.A. Payments
Best-In-Class
Anonymity
N.A. YES PoW
ETC ETHEREUM CLASSIC $ 21.00 2,094 - N.A. PLATFORM N.A. Computing
ETH fork w/o
Foundation governance
NO YES PoW

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Key Point #1 | Biggest Bubble Of All Time (BBOAT)
Source: Buckingham Research Group, Coindesk, Factset,
Thomson Reuters
 Cryptocurrencies (CCs) may have long-term value but today’s valuations aren’t sustainable
 We estimate Bitcoin is still at least 30% overvalued while most other CCs are even worse
 Unique factors fueling the biggest bubble in history
1. Global, not just millions but billions of potential participants
2. Adoption accelerated with instant online/mobile access and 24/7 trading around the world
• Compared to buying houses with subprime mortgages or overinflated tech stocks, Bitcoin
Bubble has exponentially more demand all with the convenience of trading with a mobile app
3. Massive wealth creation (everyday millionaires and even a few billionaires) sparks global fear-of-
missing-out (FOMO)
4. Difficult to value this new asset class
especially at this early stage when ideas
are enough to get funding
5. Mind-boggling complexity driving
creative valuation methods that support
the bubble
6. Crypto-exchanges and ICOs fuel further
speculation and hunt for the next hot
CC like EOS (Jun ’17 ICO, up 15x to $5.4B
or Cardano (Sept ’17 ICO, up 17x to
$9.0B)
Bitcoin in 2017:
+1,250

10
Key Point #2 | Signs Of The Bubble; The World Wants In
Source: Buckingham Research Group, CB Insights, Google
 Accelerating speculative activity sparking increasing trading volumes, account growth
 Coinbase now over 15M accounts, more than Charles Schwaab
 Binance only founded in July 2017, now the largest crypto-exchange
 Company forced to halt new account openings in January, opened 250,000 in one day
 36% of South Koreans own Bitcoin, dominating pop culture phenomenon
 Wall Street is late to the party, institutional activity sustaining the bubble
 CBOE and CME launched Bitcoin futures in December, institutional fuel to the speculative fire
31% 62% 62% 54%
18-29 30-49 50-64 65+
Source: Coin Dance, Google Analytics, Gallup, BRG
Traditional Equity Ownership by Age Group
Baby
Boomers
(55-65+),
3.0%
Gen X (35-
54), 42.9%
Millenials
(age 18-34),
54.1%
Bitcoin Community Engagement by Age

11
Key Point #2 | Initial Coin Offering Crypto-Craziness!
Source: Buckingham Research Group, CB Insights,
cryptoslate
 ICOs are an innovative new way to raise capital, low barriers to entry spurring Gold Rush
 Speculative demand for new coins has encouraged bad actors, no real plan other than get rich
 Tremendous growth -- 50 ICOs in Nov 2017, 42 every day in January, over 1500 now
 We estimate 80-90% of ICOs are worthless, yet some trade with $1+B valuations
 Compared to traditional VC funding, great deal for the startup
 Bad deal for (mostly retail) investors – limited disclosure, no ownership, cash flow, voting rights
 SEC is moving quickly to step in on scams, we expect enforcement action to accelerate at CFTC too
 Early days, see bright long-term prospects for ICO model but market needs rationality, regulation
Source: CB Insights, TokenData
$1.0B
$1.6B
$2.8B
$0.1B $0.1B $0.1B
$0.2B
$0.3B
$0.4B
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
Total ICO Funding
Total Equity Funding
Blockchain Equity Funding Pales in Comparison to ICOs
Quarterly Blockchain Equity and ICO Financing
Top ICO "Jokes"
Dogecoin (DOGE)
Compny Desc: "Dogecoin is an open source P2P digital currency, favored by Shiba Inus worldwide."
Why A Joke? 1: Founder on the record stating the 'currency' was initially created as a joke.
Currency Worth: Total Supply = 113.1B DOGE. Currently at $0.004 (USD); MrktCap of $498.9M (High $1B)
Useless Ethereum Token (UET)
Compny Desc:
Why A Joke?
Currency Worth: Total Supply = 3.9B UET. Currently at $0.02 (USD); MrktCap of $100K (High $1M)
AAA Coin (AAA)
Compny Desc:
Currency Worth: Total Supply = 138.6 AAA. Price and Market Cap not available.
Source: Buckingham Research Group, dogecoin.com, uetoken.com, aaacoin.us, CryptoSlate
"You're going to give some random person on the internet money, and they're going to take
it and go buy stuff with it. Probably electronics, to be honest. Maybe even a big-screen
television. Seriously, don't buy these tokens."
Besides explicitly telling investors UET will have/should have no value, the company's
website is a pure play at mocking the current state of the ICO / cryptocurrency market.
2: Blog post, Jan 11th, 2018, Founder notes he is active in the CC space and has holdings
in various CC, but less than $50 worth of Dogecoin itself.
Excerpt from ICO White Paper, "AAA Coin is a speculative blockchain-based CC altcoin
with the short-term goal of making men rich and the long-term goal of making them better.

12
Key Point #3 | Use Cases Still Elusive, Grossly Exaggerated
 Outside of speculation, cryptocurrencies don’t have much appeal
 Bitcoin volumes have risen substantially but we still see mostly speculation at this point
 We still hear way too much optimism on disrupting fiat currencies or traditional payments --
maybe in 20 yrs
 Ethereum use exploding but also fueled by the cryptobubble, ICO Gold Rush
 Very hard to separate speculation from usage, but seems to be over 90% speculation for most CCs
 Decentralized App’s (Dapps) are a structurally inferior consumer experience by design
 With no central trusted third party, there is no one to call or complain too
 Not just customer service, dapps are inferior across almost every dimension
1. Speed – even the fastest CCs are limited by speed of light, global interconnected computers
2. Cost – redundant transaction verification in decentralized network not as efficient
3. Features – unlike trad’l apps that are constantly improving, dapps are difficult to update
 We question the use cases around many on the top CCs, valuations way too optimistic
 We think valuations reflect speculation but also extreme over-optimism about use cases
 Ripple has made progress with banks, but we question whether any large financial institution will
actually pay for XRP (currently being given away for free by the company)
 By comparison, Ripple is a blue chip success story. Most other CCs are solely valued on hope
 NEM $4.9B, Tron $2.3B, IOTA $4.8B

13
Key Point #3 | Bitcoin, The Inferior Payments System
Source: Buckingham Research Group, Google
Relative to Bitcoin, cards have key advantages: In addition, Bitcoin has several key disadvantages:
1. Widely accepted by merchants both on and offline 1. Merchant acceptance declining with escalating transaction costs
2. Widely carried by U.S. consumers with nearly 80% penetration 2. Over 90% of BTC owners haven't used it to make a purchase
3. Easy to use offline with just a swipe, online but e-wallets easing checkout 3. Pay process is cumbersome, complex, and consumer-initiated “send”
4. No fraud liability, purchase protection, transactions can easily be disputed 4. No purchase protection and transactions are irreversible, no returns
5. Most credit cards offer significant rewards including miles and cash back 5. No rewards and they have to pay a small fee just to buy BTC
 Bitcoin has key weaknesses as a payment system especially relative to credit/debit cards
 Bitcoin has key structural deficiencies,
struggling to improve code; newer
CC’s are better, faster, more efficient
 As the original CC, Bitcoin has significant
weaknesses including speed, efficiency,
capacity, privacy, and cost
 With so many forks (see glossary on pg 50)
and 100s of new CCs improving on the
original design, Bitcoin’s lead is at precarious
 Software upgrades like Lightening are vital,
but miners have incentives to block progress
and keep fees high
 Processing times have slowed and trans fees
have skyrocketed, forcing merchants to stop
accepting Bitcoin for payments
Fork Bitcoin Bitcoin Cash Bitcoin Gold SEWWIT2X Bitcoin
Compare BTC BCH BTG B2X Private
BTCP
Supply 21M 21M 21M 21M 21M
Privacy No No No No
ZK-SNARK
(Zero Cash)
Mining ASIC ASIC GPU ASIC GPU
Replay Protection No No Yes No Yes
Block Interval 10 Mins 10 Mins 10 Mins 10 Mins 2.5 Mins
Block Size 1 MB 8 MB 1MB 2 MB 2 MB
Pow Algorithm SHA256 SHA256 GPU SHA256 EQUIHASH
Difficult Adjustment 2 Weeks 2 Weeks Every Block 2 Weeks Every Block
SEGWIT Yes No Yes Yes Yes
When Created 2009 Aug-17 Oct-17 Not Yet 1Q18
Unique Addr Format No No Yes No Yes
Bitcoin "Forks" Improve On The Original

14
Key Point #3 | Little Threat To Our Core Payments Coverage
Source: Buckingham Research Group, Blockchain.info
 Significant cryptocurrency development is disruptive threat but NOT in payments
 V/MA: BTC and other CCs pose little threat to the developed card markets as consumers have
been slow to adopt even elegant mobile solutions, like ApplePay. While there is greater potential
in less card-centric markets (see Alipay’s success in China), CCs are still an inferior solution for most
 PYPL: CCs naturally more of a threat online, but Bitcoin joins a long list of competitors that have
failed to derail PayPal’s growing first mover advantage. Bitcoin “took off” in 2017 at the same time
PayPal’s growth has accelerated, reflecting different spheres of influence.
 WU: Highly exposed given marginally better use case and significant investment in the space
(Remitly, Rebit, Bitspark, and dozens more), but we still see little evidence of disruption and expect
cash to still dominate the international remittance market.
Source: BitPay, Buckingham Research Group
-
50
100
150
200
250
Jan-14 Jan-15 Jan-16 Jan-17
Estimated Bitcoin Payments Processby BitPay
Estimated Bitcoin Payments Processby BitPay ($M)
Transactions (' 000)

15
Key Point #4 | Questionable Store Of Value, Scarcity
Source: Buckingham Research Group, Factset, HowMuch
 Bitcoin use case has morphed from payment solution to store of value, digital gold
 Since early days, allure of Bitcoin as digital gold has been key part of the consumer adoption story
 Bitcoin does have some similarities and key advantages over the traditional store of value. While
both are scarce and hard to “mine”, Bitcoin can be digitally transferred and is easily divisible
 With payments functionality a clear failure, focus has shifted to store of value, new asset class
 Bitcoin the “Gold Standard” today but cryptocurrencies are becoming a commodity
 Individual coins have limited supply by design (e.g. Bitcoin capped at 21M coins), but 4Q17 showed
there is no limit to the number of CCs, over 1500 and grew 13% in January alone (214 more on tap)

16
Key Point #4 | Rise of the Alt-Coins; Efficient, Faster, Better
Source: Buckingham Research Group, coinmarketcap.com

17
Key Point #4 | Unregulated Wild West; Market Manipulation
Source: Buckingham Research Group, Google, Chainalysis
 Bitcoin and CC exchanges are unregulated and remain highly exposed to hackers
 Short history of cryptocurrencies includes scores of hacks, another $500+M loss just last month
 Rapid rise in value has increased the stakes as North Korea has been blamed for the above hack
 Bifinex and Tether market manipulation claims have some validity
 Recently presented evidence creates compelling case that Bifinex and its Tether token have been
supporting bitcoin’s exuberant rise. Tether prices suggest market is not overly concerned…yet
 Bubbles cause bad behavior, expect to see more questionable activity come to light shortly
 While ecosystems will evolve/improve, we question whether digital assets will ever be safe
Source: 99bitcoins.com, benzinga.com
Biggest Cryptocurrency Hacks and Thefts
$5.1 in BTC
$7.0 in Ether
$30.9 in Tether
$32.0 in Ether
$50.0 in Ether
$72.0 in BTC
$78.0 in BTC
$473.0 in BTC
$534.8 in NEM
Bitstamp (Jan-2015)
CoinDash (Jul-2017)
Tether (Nov-2017)
Parity (Jul-2017)
Decentralized Autonomous Org (Jun-2016)
Bitfinex (Aug-2016)
NiceHash (Dec-2016)
Mt. Gox (Mar-2014)
Coincheck (Jan-2018)
Exchange
Wallet
Crypto-Mining Marketplace
Cryptocurrency Startup

18
Key Point #5 | Regulatory Response Accelerating, Globally
Source: Buckingham Research Group, CryptoCompare
 4Q17 Crypto-bubble has catalyzed gov’t reaction, regulation coming to key markets
1. China methodically banning all CCs, no longer leadership role
 Banned banks from interacting with banks in 2016, exchanges in Sep 17, ICOs in Oct 17
 Mining ordered to shut down ASAP (used to be 80% of mining globally) and full ban imminent
2. South Korea rushing to curtail rampant speculation
 Hot bed of speculation, frenzy. Extremely popular, especially among younger Koreans
 Banned anonymous accounts, investigating exchanges, next step unclear but likely tighter
Chinese Dominated BTC Trading Before Crackdown3. Trump administration now also
paying closer attention
 Anti-terror, money laundering
concerns accelerating with
exploding popularity
 SEC hates it, shot down ETFs now
coming after ICOs (AriseBank
January 29th)
 Regulation is inevitable, but we
think U.S. approach will continued
to be supportive, except for frauds

19
Key Point #6 | Most Compelling Use Case = Reg Risk
 In our research, we find the most compelling DAPP use cases around censorship resistance
 Dapps are structurally consumer unfriendly, inefficient, and hard to use
 Centralization is usually a good thing (someone to call when there’s a problem)
 Decentralized Autonomous Organization (DAOs) take it one step further, no sponsoring entity
 No one to sue, prosecute, cease & desist, regulate - DAO CCs nearly impossible to shut down
 Dapps and DAOs are difficult to control, create powerful use cases for illegal activities
 Bitcoin’s initial adoption was largely driven by illicit activities (Silk Road)
 Without speculation/trading, not clear how much is for legitimate activity even today
 ICOs already looking to capitalize: file transfer (Filecoin), gambling (FunFair), prediction (Augur)

20
Key Point #6 | Outside of Trading, Little Legit Use For Bitcoin
Source: NY Times, Buckingham Research Group
 Data on Bitcoin usage show how little
the payments functionality is currently
in use
 Vast majority of activity is trading,
mining, and investing
 Illegitimate uses dominate the payments
functionality including dark markets (Silk
Road reincarnates), scams, and mixing
services
 Although there are some parallels to the
early days of the internet, we continue
to see few use cases outside of gov’t
avoidance

21
GBTC | Bearish On Valuation, Not All Cryptoassets
 Bitcoin overvalued even after big sell-off but we see long-run potential:
1. Still very early and cryptocurrencies are a revolutionary new technology
2. CC valuations are challenging, unique and underfollowed; wide ranges
3. ICOs are changing capital raising, creating unique investment opportunities
4. Dapps are just scratching the surface today, compelling use cases abound
5. Bitcoin has proved resilient and is becoming trusted as network effects grow
6. Institutional investors coming as Wall Street warms up, just need reg OK
7. Bubble may have already popped with Bitcoin down +55% since Dec peak

22
Counterpoint #1 | Still Very Early and CC’s Are Revolutionary
 BBOAT dramatically increasing investment in the crypto-ecosystem, use cases expanding
 So much has changed since our last deep dive in 2014. So much more than just payments
 No longer just alt-currencies, entire world of crypto-assets: currencies, tokens, and commodities
1. Cryptocurrency: Primary goal medium of value exchange, run own blockchains
2. Cryptocommodities: Ethereum provides backbone for smart contracts, hosts other dapps
3. Cryptotoken: Tokens are cryptoassets issued on another blockchain, mostly Ethereum
 Use case has evolved from just payments to a whole world of new “dapps”
 CCs are simply digital assets that enable decentralized applications or dapps
 Dapps enable everyday processes (payments, computing, storage) without trusted central party
 Bitcoin is a payment dapp, Ethereum is a cloud computing dapp, Filecoin is a dapp for storage
 Best example of how CC space has changed is Ethereum (ETH)
 Only launched in 2015, crowdfunded with Bitcoin and project led by Vitalek Buterin 19 years old
 Ethereum is a decentralized world computer to facilitate DAPPs development
 Despite severe hacking in 2016, EHT now scaling rapidly with over 500 CCs using it
 Current valuations reflect rising speculation, but also probability weighted outcomes
 Like biotech on steroids, some of these platforms will scale and create tremendous value like BTC

23
Counterpoint #2 | ICOs Change Capital Raising, Silicon Valley
 ICOs are revolutionary advancement
 Decentralize capital raising, anyone in the world with an idea can raise money by selling tokens
 Several ICOs have already become huge successes: Ethereum, Cardano, EOS, and Binance
 Vastly superior experience for the entrepreneur over traditional VC investing
 Don’t have to provide detailed financials, do background checks/audits or give up any equity
 Much quicker to market, ICO-funded startups better able to capitalize on market opportunities
 Decentralization could be the future of technology
 FANGs dominate the Internet today, 10% of U.S. stock market, big share of the digital economy
 Smart new innovators with killer apps can just be acquired. Instagram/Facebook, PayPal/Venmo
 DAPPs can't be bought, even Google can't buy Bitcoin or Ethereum
 U.S. regulatory response will be critical in determining future path
 SEC already hates ICOs, now moving aggressively to stop a fraudulent offering, seized cryptoassets
 What will be gov’t reaction to retail investors losing money
 We see an industry in its infancy, but decentralization is all about market forces, and investors will
start to be more discriminating even without regulation and demand more disclosure

24
ICO Market Map
Source: CB Insights

25
Counterpoint #3 | Dapps Just Scratching The Surface
 Blockchain and CC’s are amazing innovation, power to decentralize huge potential
 Power to the people, most important technological advance since the Internet
 Decentralize everything, democratizing innovation and advancement
 Speculation driving most usage today, dapps have slow adoption curves
 Decentralized applications are a worse user experience, so not surprising that consumer adoption
(outside of speculation) has been dominated by desire to circumvent the law: Silk Road, China.
 But unstoppable software that has the ability to send value, execute contracts, share files, etc.
 Doesn't appeal to most consumers, especially in the U.S., where there are few legitimate use
cases
 Coinbase now has 15M accounts (more than Schwab), mostly for investing/speculation
 Initial use cases center around censorship resistance
 Dapps are inferior consumer experiences, but for some populations are the only solution
 Bitcoin started as cash alternative for illicit activity (Silk Road) then as way to avoid capital controls
 Successful alt-CCs often have use cases built on government avoidance
1. Filecoin – the Napster that can’t be shutdown
2. Augur – the Intrade that can’t be shutdown
3. PokerCoin – the PartyPoker that can’t be shutdown
4. Monero – the Bitcoin that can’t be tracked

26
C-point #3 | Bitcoin No Longer CC of Choice For Illegal Activity
Source: Chainalysis, Buckingham Research Group
 Contrary to popular belief, Bitcoin usage for illegal activity has fallen dramatically. Why?
1. Bitcoin is only pseudoanonymous and government entities have improved tracking capabilities
2. Several alternative CCs that offer better anonymity have gained traction including monero, Verge
3. Government crackdowns on illegal marketplaces (Silk Road 2.0) further reduced Bitcoin dark usage
 We expect Bitcoin usage for illegal activity to decline further, improving legitimacy but also
undermining it’s most compelling use case to date. Can it hold reserve CC status?

27
Counterpoint #4 | Network Valuation Complex, Unclear
Source: Buckingham Research Group, coinmetrics.io,
CryptoCompare, Factset
 CCs have no cash flow, earnings, or equity ownership, but there is still value to a network
 Token demand amid limited supply does create value, grows exponentially with “network effects”
 Metcalfe’s Law: value of a network is proportional to the number of users squared
 Shown effective in valuing Facebook and Tencent (view here)
 Popular Shortcut: NTV ratio which attempts to be a PE ratio for cryptocurrencies
 Network value to transaction value makes sense but seems iterative, we see better approaches
 We look at CC valuation based on address growth, transaction count, and mining revenue
*BTC/ETH - Current MrktCap as of 2/8/2018; **FB/TWTR/SNAP - 1Q18E Revenue and Users
$5.87
$2.85
$5.18
$1.75
$1.27
BTC ETH FB TWTR SNAP
Market Cap Per Wallet/Address vs. Avg RevenuePer User
Market Cap Per Wallet/Address Average Revenue Per User

28
Counterpoint #4 | CC Valuation Framework
Source: Buckingham Research Group, coinmetrics.io,
CryptoCompare
 Our proprietary valuation methodology looks at a combination of key inputs:
 Users: unique addresses and wallets as proxies for accounts
 Usage: transaction count, transaction volume, transactions per user
 Revenue: Miner revenue from new blocks and transaction fees
 Our multivariate regression analysis has extremely high correlation (91%) but not perfect
 Some key inputs are iterative, for example volume and revenue rise and fall with coin prices

29
Counterpoint #5 | Bitcoin’s Not Dead Yet, Big Network Effects
Source: Buckingham Research Group, Company Filings,
Factset
 Bitcoin facing lots of competition but first-mover advantage persisting
 Bitcoin demonstrating staying power, still dominating despite significant flaws, relative weaknesses
 Speculation still primary culprit today, but Bitcoin is becoming real store of value in some countries
 Crypto-exchanges mostly use Bitcoin as base currency, has become the USD of the crypto-world
 Unlike traditional assets, CCs can adapt and change fundamental aspects of the protocol
 Bitcoin may not be great today, but CC’s can adapt on the fly
 Soft forks update core software and are 100% backward and forward compatible
 Hard forks are backward compatible, but not forward so CC splits into two distinct assets
 First successful hard fork in Aug 2017 (Bitcoin Cash) led to 18 more, expected to triple in 2018
 Payments coverage has repeatedly taught us to never underestimate Network Effects
 Two-sided markets where both sides need buy-in are hard to disrupt even with better solutions
 PayPal is a great example: Google, Apple, V/MA can’t gain traction in online wallet space
 Bitcoin may not be ideal, but status as THE Cryptocurrency may persist with increased adoption
 Broadening scale/acceptance creates usage and trust
 Already seems to be functioning as the “Bitcoin Standard” of the cryptoworld

30
Despite Consumer Unfriendly Dapp and Rising Trans Fees…
As of YE2013 – 1,812 venues accepted BTC Payments
Source: coinmap.org

31
…Bitcoin Acceptance At Physical POS Still Growing Rapidly
As of Feb, 2018 – 11,802 venues accepted BTC Payments
Source: coinmap.org

32
Counterpoint #6 | Wall Street Declaring New Asset Class
Source: Buckingham Research Group, Factset, HowMuch
 Speculation Shifting Towards Investment
 Incredible 1700% returns in 2017 fueling accelerating investor interest
 After years of resistance, big investment banks are activity considering building trading desks
 CBOE/CME futures add significant legitimacy, ETFs could be next
 Senate hearing supportive while promising harsh penalties for fraud/scams, could add legitimacy
 Asset class argument adds tantalizing upside
 Correlations are small and often, negative adding to investment case
 At $10K per coin, market cap of BTC is just 2% of gold; 1% global allocation would put BTC at $40K
 Asset class argument could be self-fulfilling – potential to create years of (artificial?) demand
All Money = money in any form including bank or other deposits as well as notes and coins.
Physical Money = money in forms that can be used as a medium of exchange, generally notes, coins, and certain balances held by banks.
Total value of Gold trades at
~60x the value of Bitcoin

33
Counterpoint #7 | BBOAT Already Popped, Down 55%
Source: Buckingham Research Group, onchainfx
 Cryptocurrencies have already sold off hard since Dec 17 peak
 Bitcoin down about ~55% from Dec peak, average small cap ($1M-$500M) down 69%
 “Frothiness” also falling but still elevated
 Bitcoin wallet, address, volume growth has slowed recently
 ICO creation still ripping, over 300 new coins on the “ICO Calendar” (View Here)
 Cryptocurrency trading volumes remain elevated but well off December peaks
 Internet and housing bubbles had much shorter wait time for the “reality check,” we
won’t know if this was a bubble or buying opportunity for years
Name Price USD Mrkt Cap $B Age % down ATH
Bitcoin (BTC) 8,125.9$ 137.0$ 9.1yrs 60%
Ethereum (ETH) 808.3 78.8 2.5yrs 44%
Ripple (XRP) 0.8 30.8 4.1yrs 79%
Stellar Lumens (XLM) 0.4 6.7 3.5yrs 61%
Bitcoin Cash (BCH) 1,237.7 21.0 0.5yr 71%
Cardano (ADA) 0.4 9.2 0.4yr 73%
Litecoin (LTC) 148.0 8.2 6.3yrs 61%
EOS (EOS) 8.4 5.5 0.6yr 55%
NEO (NEO) 113.2 7.4 1.6yrs 42%
Dash (DASH) 598.5 4.7 4.1yrs 64%
ZCash (ZEC) 415.5 1.3 1.3yrs 56%
Lisk (LSK) 23.8 2.8 1.7yrs 39%
Monero (XMR) 244.3 3.8 3.8yrs 51%
Ethereum Classic (ETC) 22.7 2.3 1.6yrs 53%
Iota (IOT) 1.8 4.9 1.6yrs 69%

34
GBTC | Appendix
Source: Buckingham Research Group, Bloomberg
Appendix Contents
1. BTC Correlation to Cryptocurrencies pg 35
2. Growth of the Cryptocurrency Market pg 36
3. Cryptocurrency Stats and Charts pg 37-45
4. Blockchain Market Map pg 46
5. GBTC – Financials pg 47
6. Cryptocurrency Glossary pg 48-50

35
Bitcoin Moderately Correlated With Cryptoassets
 Correlations not as high as we would have
expected, but high enough
 Bitcoin has become the Dollar Standard of
the cryptoasset world, most exchanges use
BTC as base trading currency
 Bitcoin’s unique status as a Store of Value
sometimes makes it a crypto-“safe haven”
in risk-off markets
 Still can be effective way to hedge longs, as
such we think correlations increase from
here
Source: Buckingham Research Group, sifrdata.com

36
Growth of the Cryptocurrency Market
Top 25 Cryptocurrencies by Market Cap (1/3/2016) Top 25 Cryptocurrencies by Market Cap (1/1/2017) Top 25 Cryptocurrencies by Market Cap (2/8/2018)
Rank Name Mrkt Cap ($M) % of Mrkt Cap Rank Name Mrkt Cap ($M) % of Mrkt Cap Rank Name Mrkt Cap ($M) % of Mrkt Cap
1 Bitcoin 6,488.0$ 91.48% 1 Bitcoin 15,482.1$ 87.47% 1 Bitcoin 134,543.8$ 35.2%
2 Ripple 203.0 2.86% 2 Ethereum 722.8 4.08% 2 Ethereum 77,445.1 20.3%
3 Litecoin 153.2 2.16% 3 Ripple 237.6 1.34% 3 Ripple 30,263.6 7.9%
4 Ethereum 72.4 1.02% 4 Litecoin 214.7 1.21% 4 Bitcoin Cash 20,663.8 5.4%
5 Dash 19.8 0.28% 5 Monero 185.6 1.05% 5 Cardano 9,035.0 2.4%
6 Dogecoin 15.1 0.21% 6 Ethereum Classic 127.1 0.72% 6 Litecoin 7,952.9 2.1%
7 Peercoin 9.8 0.14% 7 Dash 78.7 0.44% 7 NEO 7,108.8 1.9%
8 BitShares 8.7 0.12% 8 MaidSafeCoin 44.9 0.25% 8 Stellar 6,602.1 1.7%
9 Stellar Lumens 8.4 0.12% 9 Augur 41.7 0.24% 9 EOS 5,407.0 1.4%
10 Nxt 7.3 0.10% 10 Steem 39.1 0.22% 10 IOTA 4,822.4 1.3%
11 MaidSafeCoin 6.6 0.09% 11 NEM 33.0 0.19% 11 NEM 4,736.2 1.2%
12 Factom 5.7 0.08% 12 Iconomi 27.2 0.15% 12 Dash 4,617.1 1.2%
13 Namecoin 5.6 0.08% 13 Factom 26.0 0.15% 13 Monero 3,734.9 1.0%
14 Bytecoin 5.5 0.08% 14 Waves 24.4 0.14% 14 Lisk 2,637.0 0.7%
15 Monero 5.5 0.08% 15 Dogecoin 24.2 0.14% 15 TRON 2,337.0 0.6%
16 GridCoin 3.3 0.05% 16 DigixDAO 17.8 0.10% 16 Tether 2,231.0 0.6%
17 NuShares 3.1 0.04% 17 Stellar Lumens 17.1 0.10% 17 Ethereum Classic 2,112.6 0.6%
18 Emercoin 2.9 0.04% 18 Zcash 16.7 0.09% 18 Qtum 1,957.3 0.5%
19 Rubycoin 2.8 0.04% 19 Lisk 15.2 0.09% 19 VeChain 1,920.4 0.5%
20 BlackCoin 2.0 0.03% 20 E-Dinar Coin 13.2 0.07% 20 Bitcoin Gold 1,690.0 0.4%
21 Clams 1.9 0.03% 21 GameCredits 12.3 0.07% 21 ICON 1,591.8 0.4%
22 YbCoin 1.9 0.03% 22 BitShares 10.1 0.06% 22 Nano 1,443.9 0.4%
23 MonaCoin 1.7 0.02% 23 Ardor 10.1 0.06% 23 Zcash 1,365.6 0.4%
24 Synereo 1.5 0.02% 24 Swiscoin 10.0 0.06% 24 OmiseGo 1,192.7 0.3%
25 NEM 1.5 0.02% 25 Tether 10.0 0.06% 25 Populous 1,185.5 0.3%
Top 10 Market Cap 6,985.6$ 98.49% Top 10 Market Cap 17,174.3$ 97.03% Top 10 Market Cap 303,844.6$ 79.5%
Top 25 Market Cap 7,037.1$ 99.22% Top 25 Market Cap 17,441.6$ 98.54% Top 25 Market Cap 338,597.7$ 88.5%
Total Crypto Market Cap 7,092.6$ 100.00% Total Crypto Market Cap 17,700.3$ 100.00% Total Crypto Market Cap 382,412.8$ 100.0%
Source: coinmarketcap.com, Buckingham Research Group Source: coinmarketcap.com, Buckingham Research Group Source: coinmarketcap.com, Buckingham Research Group
Market Cap calculated on circulating supply Market Cap calculated on circulating supply Data as of 2/8/2018
551 total cryptocurrencies listed 617 total cryptocurrencies listed Market Cap calculated on circulating supply
1,512 total cryptocurrencies listed

37
BTC - Currency Statistics
Source: blockchain.info, Buckingham Research Group Source: blockchain.info, Buckingham Research Group
The total number of bitcoins that have already been mined; in other words, the
current supply of bitcoins on the network.
The total USD value of bitcoin supply in circulation, as calculated by the daily
average market price across major exchanges.
Average USD market price across major bitcoin exchanges.
The total USD value of trading volume on major bitcoin exchanges.
15.6
15.8
16.0
16.2
16.4
16.6
16.8
17.0
Millions
Bitcoins inCirculaiton
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
BTC - Market Price (USD)
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
BTC - Market Cap ($B)
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
USD Exchange Trade Volume ($B)

38
ETH - Currency Statistics
Source: etherscan.io, Buckingham Research Group Source: etherscan.io, Buckingham Research Group
Source: etherscan.io, Buckingham Research Group Source: coinmetrics.io, Buckingham Research Group
82
84
86
88
90
92
94
96
98
100
Millions
ETH in Circulation
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
ETH - Market Price (USD)
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
ETH - Market Cap ($B)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Thousands
USD Exchange Trade Volume ($B)

39
BTC - Block Details
The total size of all block headers and transactions. The average block size in MB.
The total number of blocks mined but ultimately not attached to the main
Bitcoin blockchain.
The average number of transactions per block.
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Blockchain Size (MB)
0.60
0.70
0.80
0.90
1.00
1.10
1.20
Average Block Size (MB)
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Orphanced Blocks
-
500
1,000
1,500
2,000
2,500
3,000
Transactions per Block

40
BTC - Block Details
Percentage of the last 200 blocks that signal support for Bitcoin Unlimited Percentage of blocks signalling for the New York Agreement over the last 200
blocks
The median time for a transaction to be accepted into a mined block. % of the last 2016 blocks that signal support for the activation of the SegWit
soft-fork.
0
5
10
15
20
25
30
MedianTransaction ConfirmationTime (withfee) - Minutes
Minutes
0%
20%
40%
60%
80%
100%
120%
SegWithAdoption(%)
0%
10%
20%
30%
40%
50%
60%
Percentage of blocksignalingBitcoin Unlimitedsupport
0%
20%
40%
60%
80%
100%
120%
NewYork Agreementsupport

41
BTC - Mining Information
The estimated number of tera hashes per second the Bitcoin network is
performing.
A relative measure of how difficult it is to find a new block. The difficulty is
adjusted periodically as a function of how much hashing power has been
deployed by the network of miners.
An estimation of hashrate distribution amongst the largest mining pools
Total value of coinbase block rewards and transaction fees paid to miners.
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Millions
Hash Rate (TH/s)
HashRate(TH/s)
BTC.com, 26.4%
AntPool, 18.2%
BTC.TOP, 14.2%
SlushPool,8.1%
ViaBTC, 11.5%
F2Pool,5.4%
Hashrate Distribution (24 Hours)
-
500
1,000
1,500
2,000
2,500
3,000
3,500
Billions
Difficulty
$0
$10
$20
$30
$40
$50
$60
Millions
MiningRevenue (USD)

42
BTC - Mining Information
The total value of all transaction fees paid to miners. The total value of all transaction fees paid to miners (not including the
coinbase value of block rewards).
A chart showing miners revenue as percentage of the transaction volume. A chart showing miners revenue divided by the number of transactions.
0
200
400
600
800
1,000
1,200
1,400
Total Transaction Fees(BTC)
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
Millions
Total Transaction Fees(USD)
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
Cost % of Transaction Volume
$0
$20
$40
$60
$80
$100
$120
$140
$160
Cost per Transaction (USD)

43
BTC - Network Activity
Total number of transactions. The number of Bitcoin transactions added to the mempool per second.
The total number of unique addresses used on the Bitcoin blockchain. The number of daily confirmed Bitcoin transactions.
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Unique Addresses
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
Total Number of Transactions Per Day
0
50
100
150
200
250
300
350
Millions
Total Number of Transactions
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Transaction Rate (persecond)
TransactionPerSecond

44
The total number of Bitcoin transactions, excluding the 100 most popular
addresses.
The number of transactions waiting to be confirmed. The rate at which the mempool is growing per second.
The aggregate size of transactions waiting to be confirmed.
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Mempool Transaction Count
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Mempool Size Growth(Bytes PerSecond)
BytesPerSecond
0
20
40
60
80
100
120
140
160
Millions
Mempool Size (Bytes)
Bytes
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
Transaction Volume excludingPopularAddresses

45
The total estimated value of transactions on the Bitcoin blockchain. The estimated transaction value in USD value.
The total number of Bitcoin transactions per day excluding long transaction
chains.
The total value of all transaction outputs per day.
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Millions
Estimated USD Transaction Value
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Transaction Volume excludingLongChains
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Millions
Total Output Value (BTC)
0
100,000
200,000
300,000
400,000
500,000
600,000
Estimated Transaction Value (BTC)

46
Blockchain Market Map
Source: CB Insights

47
Bitcoin Investment Trust (GBTC) - Financial Statements
Bitcoin Investment Trust (GBTC)
(Amounts in $ '000, except per share data)
YE2015 1Q16 2Q16 3Q16 4Q16 YE2016 1Q17 2Q17 3Q17 4Q17 YE2017
Statements of Operations
Investment Income -$ -$ -$ -$ -$ -$ -$ -$ -$
Expenses:
Management fees 741.6 292.3 384.9 514.3 627.1 1,818.7 891.3 1,653.3 3,031.6
Net investment loss (741.6)$ (292.3)$ (384.9)$ (514.3)$ (627.1)$ (1,818.7)$ (891.3)$ (1,653.3)$ (3,031.6)$ -$ -$
Net realized gain/(loss) on investment in bitcoin (414.4) (9.6) 62.6 96.2 280.1 429.3 493.6 1,039.4 2,840.9
Net change in unrealized appreciation on bitcoin cash - - - - - - - - 77,152.2
Net change in unrealized appreciation on investment in bitcoin 16,175.5 (2,155.0) 37,028.7 (9,836.3) 61,516.5 86,553.9 20,537.3 244,825.8 314,139.5
Net realized and unrealized gain on investment in bitcoin and bitcoin cash: 15,761.0 (2,164.6) 37,091.3 (9,740.0) 61,796.6 86,983.2 21,030.8 245,865.2 394,132.6 - -
Net increase in net assets resulting from operations 15,019.5$ (2,457.0)$ 36,706.4$ (10,254.3)$ 61,169.5$ 85,164.6$ 20,139.6$ 244,211.9$ 391,101.0$ -$ -$
Statements of Changes in Net Assets
Increase/Decrease in net assets from operations:
Net investment loss (741.6) (292.3) (384.9) (514.3) (627.1) (1,818.7) (891.3) (1,653.3) (3,031.6)
Net realized gain/(loss) on investment in bitcoin (414.4) (9.6) 62.6 96.2 280.1 429.3 493.6 1,039.4 2,840.9
Net change in unrealized appreciation on bitcoin cash - - - - - - - 77,152.2
Net change in unrealized appreciation on investment in bitcoin 16,175.5 (2,155.0) 37,028.7 (9,836.3) 61,516.5 86,553.9 20,537.3 244,825.8 314,139.5
Net increase in net assets resulting from operations 15,019.5$ (2,457.0)$ 36,706.4$ (10,254.3)$ 61,169.5$ 85,164.6$ 20,139.6$ 244,211.9$ 391,101.0$ -$ -$
Increase in net assets from capital share transactions:
Shares issued 3,123.5 2,008.1 10,230.2 5,467.8 2,437.4 20,143.5 2,540.9 - -
Shares redeemed - - - - - - - - -
Net increase in net assets resulting from capital share transactions 3,123.5$ 2,008.1$ 10,230.2$ 5,467.8$ 2,437.4$ 20,143.5$ 2,540.9$ -$ -$ -$ -$
Net increase in net assets from operations and capital share transactions 18,142.9$ (448.8)$ 46,936.5$ (4,786.5)$ 63,606.9$ 105,308.1$ 22,680.4$ 244,211.9$ 391,101.0$ -$ -$
Net assets:
Beginning of year 42,795.9 60,938.8 60,490.0 107,426.5 102,640.0 60,938.8 166,246.9 188,927.3 433,139.3
End of year 60,938.8$ 60,490.0$ 107,426.5$ 102,640.0$ 166,246.9$ 166,246.9$ 188,927.3$ 433,139.3$ 824,240.3$ -$ -$
Change in shares outstanding
Shares outstanding at beginning of year 1,382.4 1,476.5 1,527.6 1,709.9 1,802.6 1,476.5 1,837.3 1,868.7 1,868.7
Shares issued 94.1 51.1 182.3 92.7 34.7 360.8 31.4 - -
Shares redeemed - - - - - - - - -
Net increase in shares 94.1 51.1 182.3 92.7 34.7 360.8 31.4 - - - -
Shares outstanding at end of year 1,476.5 1,527.6 1,709.9 1,802.6 1,837.3 1,837.3 1,868.7 1,868.7 1,868.7 - -
Net asset value (NAV) 41.27$ 39.60$ 62.83$ 56.94$ 90.48$ 90.48$ 101.10$ 231.79$ 441.08$

48
Cryptocurrency/Blockchain Glossary
51% Attack: When more than half of the computing power of a cryptocurrency network is controlled by a single entity or group, this entity or group may issue conflicting transactions
to harm the network, should they have the malicious intent to do so.
Address: Cryptocurrency addresses are used to send or receive transactions on the network. An address usually presents itself as a string of alphanumeric characters.
ASIC: Short form for ‘Application Specific Integrated Circuit’. Often compared to GPUs, ASICs are specially made for mining and may offer significant power savings.
Bitcoin: Bitcoin is the first decentralized, open source cryptocurrency that runs on a global peer to peer network, without the need for middlemen and a centralized issuer.
Block: Blocks are packages of data that carry permanently recorded data on the blockchain network.
Blockchain: A blockchain is a shared ledger where transactions are permanently recorded by appending blocks. The blockchain serves as a historical record of all transactions that ever
occurred, from the genesis block to the latest block, hence the name blockchain.
Block Height: The number of blocks connected on the blockchain.
Block Reward: A form of incentive for the miner who successfully calculated the hash in a block during mining. Verification of transactions on the blockchain generates new coins in
the process, and the miner is rewarded a portion of those.
Central Ledger: A ledger maintained by a central agency.
Confirmation: The successful act of hashing a transaction and adding it to the blockchain.
Consensus: Consensus is achieved when all participants of the network agree on the validity of the transactions, ensuring that the ledgers are exact copies of each other.
Cryptocurrency: Also known as tokens, cryptocurrencies are representations of digital assets.
Cryptographic Hash Function: Cryptographic hashes produce a fixed-size and unique hash value from variable-size transaction input. The SHA-256 computational algorithm is an
example of a cryptographic hash.
Dapp: A decentralized application (Dapp) is an application that is open source, operates autonomously, has its data stored on a blockchain, incentivized in the form of cryptographic
tokens and operates on a protocol that shows proof of value.
DAO: Decentralized Autonomous Organizations can be thought of as corporations that run without any human intervention and surrender all forms of control to an incorruptible set of
business rules.
Distributed Ledger: Distributed ledgers are ledgers in which data is stored across a network of decentralized nodes. A distributed ledger does not have to have its own currency and
may be permissioned and private.
Source: blockgeeks.com

49
Distributed Network: A type of network where processing power and data are spread over the nodes rather than having a centralized data center.
Difficulty: This refers to how easily a data block of transaction information can be mined successfully.
Digital Signature: A digital code generated by public key encryption that is attached to an electronically transmitted document to verify its contents and the sender’s identity.
Double Spending: Double spending occurs when a sum of money is spent more than once.
Ethereum: Ethereum is a blockchain-based decentralized platform for apps that run smart contracts, and is aimed at solving issues associated with censorship, fraud and third party
interference.
EVM: The Ethereum Virtual Machine (EVM) is a Turing complete virtual machine that allows anyone to execute arbitrary EVM Byte Code. Every Ethereum node runs on the EVM to
maintain consensus across the blockchain.
Fork: Forks create an alternate version of the blockchain, leaving two blockchains to run simultaneously on different parts of the network.
Genesis Block: The first or first few blocks of a blockchain.
Hard Fork: A type of fork that renders previously invalid transactions valid, and vice versa. This type of fork requires all nodes and users to upgrade to the latest version of the protocol
software.
Hash: The act of performing a hash function on the output data. This is used for confirming coin transactions.
Hash Rate: Measurement of performance for the mining rig is expressed in hashes per second.
Hybrid PoS/PoW: A hybrid PoS/PoW allows for both Proof of Stake and Proof of Work as consensus distribution algorithms on the network. In this method, a balance between miners
and voters (holders) may be achieved, creating a system of community-based governance by both insiders (holders) and outsiders (miners).
Mining: Mining is the act of validating blockchain transactions. The necessity of validation warrants an incentive for the miners, usually in the form of coins. In this cryptocurrency
boom, mining can be a lucrative business when done properly. By choosing the most efficient and suitable hardware and mining target, mining can produce a stable form of passive
income.
Multi-Signature: Multi-signature addresses provide an added layer of security by requiring more than one key to authorize a transaction.
Node: A copy of the ledger operated by a participant of the blockchain network.
Oracles: Oracles work as a bridge between the real world and the blockchain by providing data to the smart contracts.

50
Peer to Peer: Peer to Peer (P2P) refers to the decentralized interactions between two parties or more in a highly-interconnected network. Participants of a P2P network deal directly
with each other through a single mediation point.
Public Address: A public address is the cryptographic hash of a public key. They act as email addresses that can be published anywhere, unlike private keys.
Private Key: A private key is a string of data that allows you to access the tokens in a specific wallet. They act as passwords that are kept hidden from anyone but the owner of the
address.
Proof of Stake: A consensus distribution algorithm that rewards earnings based on the number of coins you own or hold. The more you invest in the coin, the more you gain by mining
with this protocol.
Proof of Work: A consensus distribution algorithm that requires an active role in mining data blocks, often consuming resources, such as electricity. The more ‘work’ you do or the
more computational power you provide, the more coins you are rewarded with.
Scrypt: Scrypt is a type of cryptographic algorithm and is used by Litecoin. Compared to SHA256, this is quicker as it does not use up as much processing time.
SHA-256: SHA-256 is a cryptographic algorithm used by cryptocurrencies such as Bitcoin. However, it uses a lot of computing power and processing time, forcing miners to form mining
pools to capture gains.
Smart Contracts: Smart contracts encode business rules in a programmable language onto the blockchain and are enforced by the participants of the network.
Soft Fork: A soft fork differs from a hard fork in that only previously valid transactions are made invalid. Since old nodes recognize the new blocks as valid, a soft fork is essentially
backward-compatible. This type of fork requires most miners upgrading in order to enforce, while a hard fork requires all nodes to agree on the new version.
Solidity: Solidity is Ethereum’s programming language for developing smart contracts.
Transaction Block: A collection of transactions gathered into a block that can then be hashed and added to the blockchain.
Transaction Fee: All cryptocurrency transactions involve a small transaction fee. These transaction fees add up to account for the block reward that a miner receives when he
successfully processes a block.
Turing Complete: Turing complete refers to the ability of a machine to perform calculations that any other programmable computer is capable of. An example of this is the Ethereum
Virtual Machine (EVM).
Wallet: A file that houses private keys. It usually contains a software client which allows access to view and create transactions on a specific blockchain that the wallet is designed for.

IMPORTANT DISCLOSURES
ANALYST CERTIFICATION: I, Chris Brendler, hereby certify that the views expressed in this research report accurately reflect my personal
views about the subject companies and their securities. I also certify that I have not been, do not, and will not be receiving direct or
indirect compensation in exchange for expressing the specific recommendations in this report.
Distribution of Ratings*
RATINGS of Stocks Under Coverage at The Buckingham Research Group
Investment Banking
Serv./Past 12 Mos.
Rating Count Percent Count Percent
BUY[B] 100 50.00 0 0.00
NEUTRAL[N] 91 45.50 1 1.10
UNDERPERFORM[U] 9 4.50 0 0.00
NOT RATED[NR] 0 0.00 0 0.00
The Buckingham Research Group’s rating categories are as follows:
BUY -- We expect 15% or more total return over the next 6-12 months.
NEUTRAL -- The stock's current price reflects our intermediate-term price objectives, and positions may be reduced.
UNDERPERFORM -- There appears to be more risk than reward in this stock at current levels. We expect the stock to underperform
over the next 6-12 months.
NOT RATED -- We are not carrying a rating on this stock for the time being. Rating & estimates under review.
*For purposes of FINRA ratings disclosure requirements, our stock ratings of "Buy," "Neutral" and "Underperform" most closely
correspond to "Buy," "Hold" and "Sell," respectively, although the meanings of our stock ratings are as set forth above.
Note that The Buckingham Research Group moved to a 3 tiered ratings system effective 1/4/10 by combining the prior STRONG BUY
and ACCUMULATE ratings into a single BUY rating. Prior to 1/4/10 our historic ratings remain in place.
Statement of Risk: Risks associated with attaining the target set for this stock include, but are not limited to, traditional economic and
competitive pressures, effective execution of corporate strategies and stock market volatility. Additionally, the company may be subject
to government regulation as well as corporate litigation, patent litigation and expirations.
Compensation: Analyst's compensation is based upon activities and services intended to benefit the clients of The Buckingham Research
Group and (“the Firm”). Like all Firm employees, analysts receive performance-based compensation that is impacted by the individual
analyst’s contribution and overall Firm profitability, which includes revenues from institutional equities sales. The analysts may also
have funds managed by an affiliate and provide research to this unit consistent with their recommendations to other clients. As a result,
investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report.
Financials Page 51 of 52
February 9, 2018

This report is based upon information available to the public. No representation is made that it is accurate or complete. The Buckingham
Research Group and its affiliates may have positions in, and may effect transactions in securities of the companies mentioned herein
independently of and not necessarily in accordance with the recommendation. The disclosures contained in this report are accurate as
of the date of this report. For additional information regarding the securities described herein please contact your sales representative
or our compliance department at (212) 922-5500.
© The Buckingham Research Group Incorporated (2018). All rights reserved. No part of this publication may be redistributed,
retransmitted or disclosed in any manner without the prior written consent of Buckingham Research Group Incorporated.
Financials Page 52 of 52
February 9, 2018

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