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Franklin Templeton Digital Holdings Trust

11/13/2025 | Press release | Distributed by Public on 11/13/2025 13:51

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-41915

Franklin Bitcoin ETF

A Series of Franklin Templeton Digital Holdings Trust

SPONSORED BY FRANKLIN HOLDINGS, LLC

(Exact name of registrant as specified in its charter)


Delaware		93-6855785
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One Franklin Parkway

San Mateo, CA 94403

(650) 312-2000

(Address of principal executive offices, telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Shares of Franklin Bitcoin ETF	EZBC	Cboe BZX Exchange, Inc.

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller Reporting Company	☒
Emerging Growth Company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.). ☐ Yes ☒ No

The registrant had 10,150,000 outstanding shares as of November 4, 2025.

Table of Contents

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q includes statements which relate to future events or future performance. In some cases, you can identify such forward-looking statements by terminology such as "may," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or the negative of these terms or other comparable terminology. All statements (other than statements of historical fact) included in this report that address activities, events or developments that may occur in the future, including such matters as changes in commodity prices and market conditions (for bitcoin and the Shares), the Fund's operations, the Sponsor's plans and references to the Fund's future success and other similar matters are forward-looking statements. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses made by the Sponsor on the basis of its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor's expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations discussed in this report, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments. All of the forward-looking statements made in this report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments the Sponsor anticipates will be realized or, even if substantially realized, will result in the expected consequences to, or have the expected effects on, the Fund's operations or the value of the Shares. None of the Trust, the Fund, the Sponsor, or the Trustee or their respective affiliates is under a duty to update any of the forward-looking statements to conform such statements to actual results or to a change in the Sponsor's expectations or predictions.

EMERGING GROWTH COMPANY STATUS

The Trust is an "emerging growth company," as defined in the JOBS Act. For as long as the Trust is an emerging growth company, the Trust may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), reduced disclosure obligations regarding executive compensation in the Fund's periodic reports and audited financial statements in its prospectus, exemptions from the requirements of holding advisory "say-on-pay" votes on executive compensation and shareholder advisory votes on "golden parachute" compensation and exemption from any rules requiring mandatory audit firm rotation and auditor discussion and analysis and, unless otherwise determined by the SEC, any new audit rules adopted by the Public Company Accounting Oversight Board.

Under the JOBS Act, the Trust will remain an emerging growth company until the earliest of:

●

the last day of the fiscal year during which the Trust has total annual gross revenues of $1.235 billion or more;

●

the last day of the fiscal year following the fifth anniversary of the completion of its initial public offering;

●

the date on which the Trust has, during the previous three-year period, issued more than $1 billion in non-convertible debt; or

●

the date on which the Trust is deemed to be a "large accelerated filer" (i.e., an issuer that (1) has more than $700 million in outstanding equity held by non-affiliates and (2) has been subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") for at least 12 calendar months and has filed at least one annual report on Form 10-K.)

The JOBS Act also provides that an emerging growth company can utilize the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act") for complying with new or revised accounting standards.

Table of Contents

FRANKLIN BITCOIN ETF

FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Table of Contents


Part I. FINANCIAL INFORMATION	Page
Item 1. Unaudited Financial Statements of the Trust and the Fund	4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures About Market Risk	27
Item 4. Controls and Procedures	28

Part II. OTHER INFORMATION
Item 1. Legal Proceedings	29
Item 1A. Risk Factors	29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3. Defaults Upon Senior Securities	31
Item 4. Mine Safety Disclosures	31
Item 5. Other Information	31
Item 6. Exhibits	32
SIGNATURES	33

Table of Contents

Part I. FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements of the Trust and the Fund

FRANKLIN BITCOIN ETF

FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Index to Unaudited Financial Statements


	Page
Combined Statements of Assets and Liabilities at September 30, 2025 and March 31, 2025 for Franklin Templeton Digital Holdings Trust	5
Combined Schedules of Investments at September 30, 2025 and March 31, 2025 for Franklin Templeton Digital Holdings Trust	6
Combined Statements of Operations for the three and six month periods ended September 30, 2025 and 2024 for Franklin Templeton Digital Holdings Trust	7
Combined Statements of Cash Flows for the six month periods ended September 30, 2025 and 2024 for Franklin Templeton Digital Holdings Trust	8
Combined Statements of Changes in Net Assets for the three and six month periods ended September 30, 2025 and 2024 for Franklin Templeton Digital Holdings Trust	9
Notes to the Combined Financial Statements for Franklin Templeton Digital Holdings Trust	10
Statements of Assets and Liabilities at September 30, 2025 and March 31, 2025 for Franklin Bitcoin ETF	15
Schedules of Investments at September 30, 2025 and March 31, 2025 for Franklin Bitcoin ETF	16
Statements of Operations for the three and six month periods ended September 30, 2025 and 2024 for Franklin Bitcoin ETF	17
Statements of Cash Flows for the six month periods ended September 30, 2025 and 2024 for Franklin Bitcoin ETF	18
Statements of Changes in Net Assets for the three and six month periods ended September 30, 2025 and 2024 for Franklin Bitcoin ETF	19
Notes to Financial Statements for Franklin Bitcoin ETF	20

Table of Contents

FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Combined Statements of Assets and Liabilities (Unaudited)


		September 30, 2025		March 31, 2025
Assets
Investment in bitcoin, at fair value(a)	$	661,347,104	$	411,158,674
Total assets		661,347,104		411,158,674

Liabilities
Sponsor's fee payable		296,639		301,331
Total liabilities		296,639		301,331
Commitments and contingencies (Note 7)
Net assets	$	661,050,465	$	410,857,343

Shares issued and outstanding(b)		10,000,000		8,550,000
Net asset value per Share	$	66.11	$	48.05

(a)

Cost of investment in bitcoin: $423,536,877 at September 30, 2025 and $313,983,408 at March 31, 2025.

(b)

No par value, unlimited amount authorized.

See accompanying notes to the unaudited combined financial statements.

Table of Contents

FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Combined Schedules of Investments (Unaudited)


September 30, 2025
	Quantity of Bitcoin		Cost		Fair Value		Fair Value as a % of Net Assets
Investment in bitcoin	5,789.9639	$	423,536,877	$	661,347,104		100.04	%
Total investments	5,789.9639	$	423,536,877	$	661,347,104		100.04	%
Less liabilities					(296,639	)	(0.04	)%
Net assets				$	661,050,465		100.00	%


March 31, 2025
	Quantity of Bitcoin		Cost		Fair Value		Fair Value as a % of Net Assets
Investment in bitcoin	4,956.3464	$	313,983,408	$	411,158,674		100.07	%
Total investments	4,956.3464	$	313,983,408	$	411,158,674		100.07	%
Less liabilities					(301,331	)	(0.07	)%
Net assets				$	410,857,343		100.00	%

See accompanying notes to the unaudited combined financial statements.

Table of Contents

FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Combined Statements of Operations (Unaudited)


	For the Three Months Ended September 30						For the Six Months Ended September 30,
	2025			2024			2025			2024
Expenses
Sponsor's fee	$	296,673		$	192,723		$	533,982		$	368,406
Less waiver		-			(69,438	)		-			(245,121	)
Total expenses		296,673			123,285			533,982			123,285
Net investment loss		(296,673	)		(123,285	)		(533,982	)		(123,285	)

Net realized and change in unrealized gain (loss) on investment in bitcoin
Net realized gain (loss) from bitcoin sold for the redemption of shares and sold to pay expenses		7,290,973			(1,325,741	)		16,310,184			(1,156,994	)
Net change in unrealized appreciation (depreciation) on investment in bitcoin		21,116,054			4,121,057			140,634,961			(32,337,968	)
Net realized and change in unrealized appreciation (depreciation) on investment in bitcoin		28,407,027			2,795,316			156,945,145			(33,494,962	)
Net increase (decrease) in net assets resulting from operations	$	28,110,354		$	2,672,031		$	156,411,163		$	(33,618,247	)
Net increase (decrease) in net assets per Share^(a)	$	3.00		$	0.23		$	17.23		$	(3.18	)

(a)

Net increase (decrease) in net assets per Share based on average shares outstanding during the period.

See accompanying notes to the unaudited combined financial statements.

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FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Combined Statements of Cash Flows (Unaudited)


		For the Six Months Ended September 30, 2025			For the Six Months Ended September 30, 2024

Cash Flows from Operating Activities:
Net increase (decrease) in net assets resulting from operations	$	156,411,163		$	(33,618,247	)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of bitcoin		(148,387,208	)		(209,726,374	)
Sales of bitcoin		55,143,923			65,776,280
Net realized (gain) loss on investment in bitcoin		(16,310,184	)		1,156,994
Net change in unrealized (appreciation) depreciation		(140,634,961	)		32,337,968
Change in operating assets and liabilities:
Sponsor's fee payable		(4,692	)		65,596
Net cash provided by (used in) operating activities	$	(93,781,959	)	$	(144,007,783	)

Cash Flows from Financing Activities:
Proceeds from issuance of Shares	$	148,387,208		$	209,726,374
Payments on Shares redeemed		(54,605,249	)		(65,718,591	)
Net cash provided by (used in) financing activities	$	93,781,959		$	144,007,783

Cash
Net decrease in cash	$	-		$	-
Cash, beginning of period		-			-
Cash, end of period	$	-		$	-

See accompanying notes to the unaudited combined financial statements.

Table of Contents

FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Combined Statements of Changes in Net Assets (Unaudited)


	For the Three Months Ended September 30,						For the Six Months Ended September 30,
	2025			2024			2025			2024

Net assets, beginning of period	$	559,429,215		$	373,054,934		$	410,857,343		$	341,901,105
Net investment loss		(296,673	)		(123,285	)		(533,982	)		(123,285	)
Net realized gain (loss) on investment in bitcoin		7,290,973			(1,325,741	)		16,310,184			(1,156,994	)
Net change in unrealized appreciation (depreciation) on investment in bitcoin		21,116,054			4,121,057			140,634,961			(32,337,968	)
Net increase (decrease) in net assets resulting from operations		28,110,354			2,672,031			156,411,163			(33,618,247	)
Capital Share Transactions:
Contributions for Shares issued		92,885,565			107,983,445			148,387,208			209,726,374
Distributions for Shares redeemed		(19,374,669	)		(31,419,769	)		(54,605,249	)		(65,718,591	)
Net increase (decrease) in net assets from capital share transactions		73,510,896			76,563,676			93,781,959			144,007,783
Net assets, end of period	$	661,050,465		$	452,290,641		$	661,050,465		$	452,290,641

See accompanying notes to the unaudited combined financial statements.

Table of Contents

FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Notes to the Combined Financial Statements (Unaudited)

1. ORGANIZATION

The Franklin Templeton Digital Holdings Trust (the "Trust") was formed as a Delaware statutory trust on September 6, 2023, and is governed by the provisions of an Agreement and Declaration of Trust dated as of January 5, 2024 (the "Declaration of Trust"). The Trust, as registrant is not registered as an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act") and is not a commodity pool for purposes of the Commodity Exchange Act ("CEA"). The accompanying financial statements relate to the Trust, as registrant, and the one series that it currently offers, the Franklin Bitcoin ETF (the "Fund") presented on a combined basis. Separate, series-level financial statements are provided for the Fund in another section of this report. The Trust had no operations prior to the commencement of operations of the Fund on January 11, 2024, other than matters relating to its organization and the registration of the Fund under the Securities Act of 1933, as amended (the "Securities Act"). The Sponsor of the Trust and the Fund (the "Sponsor") is Franklin Holdings, LLC. The Sponsor is a Delaware limited liability company formed on July 21, 2021. The Sponsor is not subject to regulation by the Commodity Futures Trading Commission ("CFTC") as a commodity pool operator with respect to the Fund, or a commodity trading advisor with respect to the Fund. The Fund issues shares (the "Shares"), which represent units of fractional undivided beneficial interest in the Fund. The Shares of the Fund are listed on the Cboe BZX Exchange, Inc. ("Cboe BZX Exchange" or the "Exchange"). The Shares were first listed for trading and the Fund commenced operations on January 11, 2024.

The Fund seeks to reflect generally the performance of the price of bitcoin before payment of the Fund's expenses and liabilities. The Shares are intended to offer a convenient means of making an investment similar to an investment in bitcoin relative to acquiring, holding and trading bitcoin directly on a peer-to-peer or other basis or via a digital asset platform. The Shares have been designed to remove obstacles associated with the complexities and operational burdens involved in a direct investment in bitcoin by providing an investment with a value that reflects the price of the bitcoin owned by the Fund at such time, less the Fund's expenses and liabilities. The Fund is not a proxy for a direct investment in bitcoin. Rather, the Shares are intended to provide a cost-effective alternative means of obtaining investment exposure through the securities markets that is similar to an investment in bitcoin. The Fund is a passive investment vehicle and is not a leveraged product. The Sponsor does not actively manage the bitcoin held by the Fund.

BNY Mellon Asset Servicing, a division of The Bank of New York Mellon, or "BNYM," is the Fund's Administrator (the "Administrator") and Transfer Agent (the "Transfer Agent"). BNYM also serves as the custodian of the Fund's cash (the "Cash Custodian").The Administrator is generally responsible for the day-to-day administration of the Fund, including the calculation of the Fund's net asset value ("NAV") per Share. The Bitcoin Custodian is responsible for safekeeping the bitcoin owned by the Fund. The Bitcoin Custodian is Coinbase Custody Trust Company, LLC ("Coinbase Custody"). Coinbase Inc., an affiliate of the Bitcoin Custodian, is the Fund's Prime Broker. CSC Delaware Trust Company, a subsidiary of the Corporation Service Company (the "Trustee"), is the sole trustee of the Trust. Franklin Distributors, LLC is the marketing agent of the Fund (the "Marketing Agent").

The Fund issues Shares only to certain eligible financial institutions called Authorized Participants and only in one or more blocks of 50,000 Shares ("Creation Units"). Creation Units are directly redeemable only by Authorized Participants. Creation Units are issued and redeemed in exchange for cash. The Shares are listed and traded on the Exchange under the ticker symbol "EZBC". The market price of the Shares may be different than the Fund's NAV per Share. The Fund issues Shares in Creation Units on a continuous basis at the applicable NAV per Share on the creation order date. Except when aggregated in Creation Units, the Shares are not redeemable securities.

The Trust is an "emerging growth company" as that term is used in the Securities Act of 1933, as amended (the "Securities Act"), and, as such, the Trust may elect to comply with certain reduced public company reporting requirements.

The accompanying Combined Statements of Assets and Liabilities and Combined Schedules of Investments at September 30, 2025 and March 31, 2025 and the Combined Statements of Operations, Combined Statements of Cash Flows and Combined Statements of Changes in Net Assets for the period ended September 30, 2025 and September 30, 2024, have been prepared on behalf of the Trust, as registrant, combined with its one currently offered series, the Fund, and for the Fund separately (included below in a separate section of this report), and are unaudited. In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal recurring adjustments) necessary to state fairly the financial position and results of operations for all periods stated have been made. In addition, interim period results are not necessarily indicative of results for a full-year period. These financial statements and the notes thereto should be read in conjunction with the Trust and the Fund's financial statements included in the Annual Report on Form 10-K for the fiscal year ended March 31, 2025.

The fiscal year of the Trust and the Fund is March 31st.

2. SIGNIFICANT ACCOUNTING POLICIES

In preparing financial statements in conformity with accounting principles generally accepted in the United States ("GAAP"), management of the Sponsor makes estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amount of revenue and expenses reported during the period. Actual results could differ from these estimates.

The accompanying unaudited financial statements were prepared in accordance with GAAP for interim financial information and with the instructions for Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC").

The following is a summary of significant accounting policies followed by the Trust and the Fund.

2.1. Basis of Presentation

The Sponsor has determined that the Trust falls within the scope of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 946, Financial Services-Investment Companies, and has concluded that solely for accounting purposes, the Trust is classified as an Investment Company as defined in ASC 946.

The financial statements are presented for the Trust, as the registrant, combined with the Fund. Financial statements for the Fund presented at the series level are provided separately in this report. For the periods presented, there were no balances or activity for the Trust except for the Fund's operations, as its sole series. These notes to the financial statements relate to the Trust, as the registrant, combined with the Fund. The debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the Fund are enforceable only against the assets of the Fund and not against the assets of the Trust generally or any other series that the Trust may establish. Individual, series-level financial statements for the Fund are presented separately within this report.

Table of Contents

2.2. Calculation of NAV and NAV per Share

The Sponsor has the exclusive authority to determine the Fund's net asset value ("NAV"). The Sponsor has delegated to the Administrator the responsibility to calculate the NAV of the Fund, based on a pricing source selected by the Sponsor. In determining the Fund's NAV, the Administrator generally will value the bitcoin held by the Fund based on the Index, unless the Sponsor in its sole discretion determines that the index is unreliable. The CME CF Bitcoin Reference Rate - New York Variant for the Bitcoin - U.S. Dollar trading pair (the "CF Benchmarks Index") shall constitute the Index, unless the CF Benchmarks Index is not available or the Sponsor in its sole discretion determines the CF Benchmarks Index is unreliable as the Index and therefore determines not to use the CF Benchmarks Index as the Index. If the CF Benchmarks Index is not available or the Sponsor determines, in its sole discretion, that the CF Benchmarks Index is unreliable (referred to herein as a "Fair Value Event"), the Fund's holdings may be fair valued by the Sponsor.

On each Business Day, as soon as practicable after 4:00 PM Eastern Time ("ET"), the Administrator evaluates the bitcoin held by the Fund as reflected by the CF Benchmarks Index and determines the NAV of the Fund. For purposes of making these calculations, a Business Day means any day other than a day when the Cboe BZX Exchange is closed for regular trading. The Trust's periodic financial statements may not utilize this net asset value of the Trust to the extent the methodology used to calculate the Index is deemed not to be consistent with GAAP.

2.3. Valuation of Bitcoin

The Fund's financial statements are prepared in accordance with GAAP for interim financial information. Bitcoin is priced at 11:59:59PM ET. The Trust determines the fair value of bitcoin based on the price provided by the bitcoin market that the Trust considers its "Principal Market" as of 11:59:59PM ET on the valuation date. This fair value price is referred to as "Principal Market Price". With respect to the Fund's bitcoin holdings, the Trust follows the provisions of the Financial Accounting Standards Board Accounting Standards Codification Topic 820, "Fair Value Measurements and Disclosures" ("ASC Topic 820") and utilize an exchange-traded price from the Fund's principal market (or in the absence of a principal market, the most advantageous market) for bitcoin as of the Fund's financial statement measurement date.

ASC 820 established a hierarchy that prioritized inputs to valuation techniques used to measure fair value. The three levels of inputs are:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and

Level 3: Inputs that are unobservable for the asset or liability, including the Fund's assumptions used in determining the fair value of investments.

On September 30, 2025 and March 31, 2025, the value of the bitcoin held by the Fund is categorized as Level 1.

2.4. Fees, Expenses and Realized Gains (Losses)

The Fund's only ordinary recurring expense is the Sponsor's fee. In exchange for the Sponsor's fee, the Sponsor has agreed to assume the ordinary fees and expenses incurred by the Fund, including but not limited to the following: the fees charged by the Administrator, the Marketing Agent, the Custodians (the Cash Custodian and Bitcoin Custodian, collectively) and the Trustee, Cboe BZX Exchange listing fees, typical maintenance and transaction fees of the DTC, SEC registration fees, printing and mailing costs, tax reporting fees, audit fees, license fees and expenses, and up to $500,000 per annum in ordinary legal fees and expenses. Bitcoin transactions are accounted for on a trade date basis. Realized gains or losses from the sale or disposition of bitcoin are determined on a specific identification basis and recognized in the Combined Statements of Operations in the period in which the sale or disposition occurs, respectively.

The Sponsor's fee is accrued daily at an annualized rate equal to 0.19% of the net asset value of the Fund and is payable at least quarterly in arrears in U.S. dollars. The Sponsor may, at its sole discretion and from time to time, waive all or a portion of the Sponsor's 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 Fund will sell bitcoin as needed to pay the Sponsor's fee. The Fund bears transaction costs, including any bitcoin network fees or other similar transaction fees, in connection with any sales of bitcoin necessary to pay the Sponsor's fee, as well as other Fund expenses (if any) that are not assumed by the Sponsor (expenses assumed by the Sponsor are specified above). Any bitcoin network fees and similar transaction fees incurred in connection with the creation or redemption of Creation Units are borne by the Authorized Participant. For the quarter ended September 30, 2025, the Fund accrued the Sponsor's Fee of $296,639.

The Sponsor is not required to pay any extraordinary or non-routine expenses. The Fund will be responsible for the payment of such expenses to the extent any such expenses are incurred. Extraordinary expenses are fees and expenses which are unexpected or unusual in nature, such as legal claims and liabilities and litigation costs or indemnification or other unanticipated expenses. Extraordinary fees and expenses also include material expenses which are not currently anticipated obligations of the Fund. The Fund will be responsible for the payment of such expenses to the extent any such expenses are incurred. Routine operational, administrative and other ordinary expenses are not deemed extraordinary expenses. In addition, the Fund may incur certain other non-recurring expenses that are not assumed by the Sponsor (expenses assumed by the Sponsor are described above), including but not limited to, taxes and governmental charges, any applicable brokerage commissions, bitcoin network fees and similar transaction fees that qualify as extraordinary or non-routine expenses as described above, financing fees, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Fund to protect the Fund or the interests of Shareholders (including, for example, in connection with any fork of the bitcoin blockchain, any Incidental Rights and any IR Virtual Currency), any indemnification of the Cash Custodian, Bitcoin Custodian, Prime Broker, Administrator or other agents, service providers or counterparties of the Trust or the Fund and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters or legal expenses in excess of $500,000 per year. The Sponsor may determine in its sole discretion to assume legal fees and expenses of the Fund in excess of the $500,000 per annum stipulated in the Sponsor Agreement. To the extent that the Sponsor does not voluntarily assume such fees and expenses, they will be the responsibility of the Fund. Because the Fund does not have any income, it will need to sell bitcoin to cover the Sponsor's fee and expenses not assumed by the Sponsor, if any. Fund expenses not assumed by the Sponsor shall accrue daily and be payable by the Fund to the Sponsor at least quarterly in arrears. The Fund 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 will be sales of bitcoin held by the Fund. Even if there are no expenses other than those assumed by the Sponsor, and there are no other liabilities of the Fund, the Fund will still need to sell bitcoin to pay the Sponsor's fee. The result of these sales is a decrease in the amount of bitcoin represented by each Share.

There have been no extraordinary or non-routine expenses during the periods presented.

Table of Contents

2.5. Income Taxes

The Fund is classified as a "grantor trust" for United States federal income tax purposes. As a result, the Trust and the Fund are not subject to United States federal income tax. Instead, the Fund's income, gain, losses, and expenses will "flow through" to the Shareholders, and the Administrator reports these to the Internal Revenue Service on that basis.

The Sponsor has analyzed applicable tax laws and regulations and their application to the Trust and the Fund as of September 30, 2025 and March 31, 2025, and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

2.6. Creation and Redemption of Shares

The Fund issues and redeems Creation Units on a continuous basis. Creation Units are issued or redeemed in exchange for an amount of cash as determined by the Administrator on each day that Cboe BZX Exchange is open for regular trading.

For creation transactions, the amount of cash required to be delivered to the Fund will equal the amount of cash needed to purchase the amount of bitcoin represented by the Creation Unit(s) being created, as calculated by the Administrator, plus applicable fees, costs and adjustments. For redemption transactions, the Sponsor will arrange for the bitcoin represented by the Creation Unit(s) being redeemed to be sold and the cash proceeds, after applicable fees, costs and adjustments, distributed. No Shares are issued until the corresponding amount of bitcoin has been received in the Fund's Trading Balance. Creation Units may be created or redeemed only by Authorized Participants, who pay (1) a transaction fee for each order to create or redeem Creation Units; (2) transfer, processing and other transaction costs charged by the Bitcoin Custodian in connection with the issuance or redemption of Creation Units for such order; and (3) any other expenses, taxes, charges or adjustments.

As of the end of the period covered by this report, the Authorized Participants deliver only cash to create Shares and receive only cash when redeeming Shares in the manner as described above.

Creation Units will be sold at a per-Share offering price that will vary depending on, among other things, the price of bitcoin and the trading price of the Shares on the Cboe BXZ Exchange Inc. at the time of the offer. Shares offered at different times may have different offering prices.

Changes in the Shares for the quarter from July 1, 2025 to September 30, 2025 are as follows:


	Shares			Amount^
Balance at July 1, 2025	8,900,000		$	260,699,671
Creation of Shares	1,400,000			92,885,565
Redemption of Shares	(300,000	)		(19,374,669	)
Balance at September 30, 2025	10,000,000		$	334,210,567

Changes in the Shares for the quarter July 1, 2024 to September 30, 2024 are as follows:


	Shares			Amount^
Balance at July 1, 2024	10,150,000		$	348,068,049
Creation of Shares	3,050,000			107,983,445
Redemption of Shares	(950,000	)		(31,419,769	)
Balance at September 30, 2024	12,250,000		$	424,631,725

Changes in the Shares for the period April 1, 2025 to September 30, 2025 are as follows:


	Shares			Amount^
Balance at April 1, 2025	8,550,000		$	240,428,608
Creation of Shares	2,450,000			148,387,208
Redemption of Shares	(1,000,000	)		(54,605,249	)
Balance at September 30, 2025	10,000,000		$	334,210,567

Changes in the Shares for the period April 1, 2024 to September 30, 2024 are as follows:


	Shares			Amount^
Balance at April 1, 2024	8,350,000		$	280,623,942
Creation of Shares	5,850,000			209,726,374
Redemption of Shares	(1,950,000	)		(65,718,591	)
Balance at September 30, 2024	12,250,000		$	424,631,725

^ Dollar amount of balance represents the cumulative fair value of creation of shares less the redemption of shares, at the time of the specific creation or redemption.

3. INVESTMENT IN BITCOIN

The following represents the changes in quantity of bitcoin held and the respective fair value during the quarter July 1, 2025 to September 30, 2025:


	Amount in bitcoin			Amount in US$
Balance at July 1, 2025	5,155.3659		$	559,666,521
Bitcoin purchased for the creation of Shares	810.3845			92,885,565
Bitcoin sold for the redemption of Shares	(173.6506	)		(19,374,669	)
Principal on bitcoin sales to pay expenses	(2.1359	)		(237,340	)
Net realized gain (loss) from bitcoin sold for the redemption of shares and sold to pay expenses	-			7,290,973
Net change in unrealized appreciation (depreciation) on investment in bitcoin	-			21,116,054
Balance at September 30, 2025	5,789.9639		$	661,347,104

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The following represents the changes in quantity of bitcoin held and the respective fair value during the quarter July 1, 2024 to September 30, 2024:


	Amount in bitcoin			Amount in US$
Balance at July 1, 2024	5,886.9982		$	373,054,955
Bitcoin purchased for the creation of Shares	1,768.8331			107,983,297
Bitcoin sold for the redemption of Shares	(550.9655	)		(31,419,621	)
Principal on bitcoin sales to pay expenses	(1.0170	)		(57,689	)
Net realized gain (loss) from bitcoin sold for the redemption of shares	-			(1,325,741	)
Net change in unrealized appreciation (depreciation) on investment in bitcoin	-			4,121,057
Balance at September 30, 2024	7,103.8488		$	452,356,258

The following represents the changes in quantity of bitcoin held and the respective fair value during the six months April 1, 2025 to September 30, 2025:


	Amount in bitcoin			Amount in US$
Balance at April 1, 2025	4,956.3464		$	411,158,674
Bitcoin purchased for the creation of Shares	1,418.5352			148,387,208
Bitcoin sold for the redemption of Shares	(579.0817	)		(54,605,249	)
Principal on bitcoin sales to pay expenses	(5.8360	)		(538,674	)
Net realized gain (loss) from bitcoin sold for the redemption of shares	-			16,310,184
Net change in unrealized appreciation (depreciation) on investment in bitcoin	-			140,634,961
Balance at September 30, 2025	5,789.9639		$	661,347,104

The following represents the changes in quantity of bitcoin held and the respective fair value during the six months April 1, 2024 to September 30, 2024:


	Amount in bitcoin			Amount in US$
Balance at April 1, 2024	4,842.9986		$	341,901,126
Bitcoin purchased for the creation of Shares	3,392.8311			209,726,374
Bitcoin sold for the redemption of Shares	(1,130.9639	)		(65,718,591	)
Principal on bitcoin sales to pay expenses	(1.0170	)		(57,689	)
Net realized gain (loss) from bitcoin sold for the redemption of shares	-			(1,156,994	)
Net change in unrealized appreciation (depreciation) on investment in bitcoin	-			(32,337,968	)
Balance at September 30, 2024	7,103.8488		$	452,356,258

4. RELATED PARTIES

The Sponsor of the Trust is Franklin Holdings, LLC. The Sponsor is responsible for establishing the Trust and for the registration of the Shares. The Sponsor generally oversees the performance of the Fund's principal service providers but does not exercise day-to-day oversight over such service providers. The Sponsor, with assistance and support from the Administrator, is responsible for preparing and filing periodic reports on behalf of the Trust and the Fund with the SEC and will provide any required certification for such reports. The Sponsor has designated the independent registered public accounting firm of the Trust on behalf of the Fund and may from time to time employ legal counsel for the Fund.

Franklin Distributors, LLC serves as the Marketing Agent of the Fund. The Sponsor and the Marketing Agent are affiliates, and each is considered to be a related party to the Trust and the Fund. Franklin Resources, Inc. ("FRI") is the ultimate parent company of the Sponsor and the Marketing Agent. FRI is the holding company for various subsidiaries that together are referred to as Franklin Templeton.

The Sponsor is a related party of the Trust and the Fund. The Fund pays the Sponsor a unitary fee for services performed pursuant to the Sponsor Agreement. The Marketing Agent is an affiliate of the Sponsor. Expenses payable to the Marketing Agent, if any, are paid through the Sponsor's fee.

The Trust also considers Franklin Resources, Inc., the ultimate parent company of the Sponsor, to be a related party of the Trust and the Fund. As of September 30, 2025 and March 31, 2025, no shares of the Fund were held by any related party.

5. CONCENTRATION OF RISK

The Fund holds only bitcoin and cash, which creates a concentration risk associated with fluctuations in the price of bitcoin. Accordingly, a decline in the price of bitcoin will have an adverse effect on the value of the Shares of the Fund. The trading prices of bitcoin have experienced extreme volatility in recent periods and may continue to fluctuate significantly. Extreme volatility in the future, including substantial, sustained, or rapid declines in the trading prices of bitcoin, could have a material adverse effect on the value of the Shares and the Shares could lose all or substantially all of their value. Factors adversely impacting the value of bitcoin and the Shares may include an increase in the global bitcoin supply or a decrease in global bitcoin demand; market conditions of, and overall sentiment towards, the digital assets and blockchain technology industry; trading activity on digital asset platforms, which, in many cases, are largely unregulated or may be subject to manipulation; the adoption of bitcoin as a medium of exchange, store-of-value or other consumptive asset and the maintenance and development of the open-source software protocol of the bitcoin network, and their ability to meet user demands; manipulative trading activity on digital asset platforms, which, in many cases, are largely unregulated; and forks in the bitcoin network, among other things.

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6. COMBINED FINANCIAL HIGHLIGHTS




		For the Three Months Ended September 30,						For the Six Months Ended September 30,
		2025			2024			2025			2024

Net asset value per Share, beginning of period	$	62.86		$	36.75		$	48.05		$	40.95
Net investment loss^(a)		(0.03	)		(0.01	)		(0.06	)		(0.01	)
Net realized and unrealized gain (loss) on investment in bitcoin		3.28			0.18			18.12			(4.02	)
Net change in net assets from operations^(b)		3.25			0.17			18.06			(4.03	)
Net asset value per Share, end of period	$	66.11		$	36.92		$	66.11		$	36.92

Total return, at net asset value^(c)(d)		5.17	%		0.46	%		37.59	%		(9.84	)%

Ratio to average net assets^(e)
Net investment loss		(0.19	)%		(0.12	)%		(0.19	)%		(0.06	)%
Gross expenses		0.19	%		0.19	%		0.19	%		0.19	%
Net expenses		0.19	%		0.12	%(f)		0.19	%		0.06	%(f)

(a)

Calculated using average Shares outstanding.

(b)

The amount shown for a share outstanding may not agree with the change in the aggregate gains and losses for the period because of the timing of transactions in the Fund's shares in relation to fluctuating market values for the Fund.

(c)

Calculation based on the change in net asset value of a Share during the period. Total return for periods of less than a year are not annualized.

(d)

Total Return at NAV is calculated assuming an initial investment made at the NAV at the beginning of the period, and redemption of Shares at NAV on the last day of the period. Total Return at NAV as shown above includes adjustments in accordance with U.S. GAAP.

(e)

Annualized.

(f)

For the period from January 12, 2024 to August 2, 2024, the Sponsor waived a portion of the Sponsor's Fee so that the Sponsor's Fee after the fee waiver would be equal to 0.00% of the net asset value of the Fund for the first $10.0 billion of the Fund's assets. Prior to the implementation of the waiver, for the one day period January 11, 2024, the Fund accrued the Sponsor Fee of 0.29% ($21).

7. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Trust, on behalf of the Fund, may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.

8. INDEMNIFICATION

Under the Trust's organizational documents, the Sponsor and its shareholders, members, directors, affiliates, officers, employees and subsidiaries are indemnified by the Trust against certain liabilities. The Fund has also agreed to indemnify certain of its other service providers, including the Administrator, the Marketing Agent, the Custodians and the Trustee (including its officers, affiliates, directors, employees, and agents), for certain liabilities incurred by such parties in connection with their respective agreements to provide services for the Fund.

The Sponsor will not be liable to the Trust, the Trustee or any Shareholder for any action taken or for refraining from taking any action in good faith, or for errors in judgment or for depreciation or loss incurred by reason of the sale of any bitcoin or other assets of the Fund or the Trust. However, the preceding liability exclusion will not protect the Sponsor against any liability resulting from its own gross negligence, bad faith, or willful misconduct.

The Sponsor and each of its shareholders, members, directors, officers, employees, affiliates and subsidiaries will be indemnified by the Trust and held harmless against any losses, liabilities or expenses incurred in the performance of its duties under the Declaration of Trust without gross negligence, bad faith, or willful misconduct. The Sponsor may rely in good faith on any paper, order, notice, list, affidavit, receipt, evaluation, opinion, endorsement, assignment, draft or any other document of any kind prima facie properly executed and submitted to it by the Trustee, the Trustee's counsel or by any other person for any matters arising under the Declaration of Trust. The Sponsor shall in no event be deemed to have assumed or incurred any liability, duty, or obligation to any Shareholder or to the Trustee other than as expressly provided for in the Declaration of Trust. Such indemnity includes payment from the Trust of the costs and expenses incurred in defending against any indemnified claim or liability under the Declaration of Trust.

The Trustee will not be liable or accountable to the Trust or any other person or under any agreement to which the Trust or any series of the Trust is a party, except for the Trustee's breach of its obligations pursuant to the Declaration of Trust or its own willful misconduct, bad faith or gross negligence. The Trustee and each of the Trustee's officers, affiliates, directors, employees, and agents will be indemnified by the Trust from and against any losses, claims, taxes, damages, reasonable expenses, and liabilities incurred with respect to the creation, operation or termination of the Trust, the execution, delivery or performance of the Declaration of Trust or the transactions contemplated thereby; provided that the indemnified party acted without willful misconduct, bad faith or gross negligence.

9. OPERATING SEGMENTS

The Fund, which is the sole series of the Trust, and the Trust operate as a singleoperating segment, which is an investment portfolio. Executive officers of the Fund's Sponsor perform the functions of the Chief Operating Decision Maker (CODM), evaluating fund-wide results and performance under a unified investment strategy. The CODM uses these measures to assess fund performance and allocate resources effectively. Internal reporting provided to the CODM aligns with the accounting policies and measurement principles used in the financial statements.

For information regarding segment assets, segment profit or loss, and significant expense, refer to the Combined Statements of Assets and Liabilities and the Combined Statements of Operations, along with the related Combined Notes to Financial Statements. The Combined Schedules of Investments provide details of the Fund's investments that generate returns such as realized and unrealized gains or losses. Performance metrics and expense ratios are disclosed in the Combined Financial Highlights.

10. SUBSEQUENT EVENTS

The Trust and the Fund have evaluated subsequent events through the issuance of the financial statements and determined that no such events have occurred that require disclosure.

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FRANKLIN BITCOIN ETF

A SERIES OF FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Statements of Assets and Liabilities (Unaudited)


		September 30, 2025		March 31, 2025
Assets
Investment in bitcoin, at fair value (a)	$	661,347,104	$	411,158,674
Total assets		661,347,104		411,158,674

Liabilities
Sponsor's fee payable		296,639		301,331
Total liabilities		296,639		301,331
Commitments and contingencies (Note 7)
Net assets	$	661,050,465	$	410,857,343

Shares issued and outstanding (b)		10,000,000		8,550,000
Net asset value per Share	$	66.11	$	48.05

(a)

Cost of investment in bitcoin: $423,536,877 at September 30, 2025 and $313,983,408 at March 31, 2025.

(b)

No par value, unlimited amount authorized.

See accompanying notes to the unaudited financial statements.

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FRANKLIN BITCOIN ETF

A SERIES OF FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Schedules of Investments (Unaudited)


September 30, 2025
	Quantity of Bitcoin		Cost		Fair Value		Fair Value as a % of Net Assets
Investment in bitcoin	5,789.9639	$	423,536,877	$	661,347,104		100.04	%
Total investments	5,789.9639	$	423,536,877	$	661,347,104		100.04	%
Less liabilities					(296,639	)	(0.04	)%
Net assets				$	661,050,465		100.00	%


March 31, 2025
	Quantity of Bitcoin		Cost		Fair Value		Fair Value as a % of Net Assets
Investment in bitcoin	4,956.3464	$	313,983,408	$	411,158,674		100.07	%
Total investments	4,956.3464	$	313,983,408	$	411,158,674		100.07	%
Less liabilities					(301,331	)	(0.07	)%
Net assets				$	410,857,343		100.00	%

See accompanying notes to the unaudited financial statements.

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FRANKLIN BITCOIN ETF

A SERIES OF FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Statements of Operations (Unaudited)



		For the Three Months Ended September 30,						For the Six Months Ended September 30,
		2025			2024			2025			2024
Expenses
Sponsor's fee	$	296,673		$	192,723		$	533,982		$	368,406
Less waiver		-			(69,438	)		-			(245,121	)
Total expenses		296,673			123,285			533,982			123,285
Net investment loss		(296,673	)		(123,285	)		(533,982	)		(123,285	)

Net realized and change in unrealized gain (loss) on investment in bitcoin
Net realized gain (loss) from bitcoin sold for the redemption of shares and sold to pay expenses		7,290,973			(1,325,741	)		16,310,184			(1,156,994	)
Net change in unrealized appreciation (depreciation) on investment in bitcoin		21,116,054			4,121,057			140,634,961			(32,337,968	)
Net realized and change in unrealized appreciation (depreciation) on investment in bitcoin		28,407,027			2,795,316			156,945,145			(33,494,962	)
Net increase (decrease) in net assets resulting from operations	$	28,110,354		$	2,672,031		$	156,411,163		$	(33,618,247	)
Net increase (decrease) in net assets per Share(a)	$	3.00		$	0.23		$	17.23		$	(3.18	)

(a)

Net increase (decrease) in net assets per Share based on average shares outstanding during the period.

See accompanying notes to the unaudited financial statements.

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FRANKLIN BITCOIN ETF

A SERIES OF FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Statements of Cash Flows (Unaudited)


		For the Six Months Ended September 30, 2025			For the Six Months Ended September 30, 2024

Cash Flows from Operating Activities:
Net increase (decrease) in net assets resulting from operations	$	156,411,163		$	(33,618,247	)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of bitcoin		(148,387,208	)		(209,726,374	)
Sales of bitcoin		55,143,923			65,776,280
Net realized (gain) loss on investment in bitcoin		(16,310,184	)		1,156,994
Net change in unrealized (appreciation) depreciation		(140,634,961	)		32,337,968
Change in operating assets and liabilities:
Sponsor's fee payable		(4,692	)		65,596
Net cash provided by (used in) operating activities	$	(93,781,959	)	$	(144,007,783	)

Cash Flows from Financing Activities:
Proceeds from issuance of Shares	$	148,387,208		$	209,726,374
Payments on Shares redeemed		(54,605,249	)		(65,718,591	)
Net cash provided by (used in) financing activities	$	93,781,959		$	144,007,783

Cash
Net decrease in cash	$	-		$	-
Cash, beginning of period		-			-
Cash, end of period	$	-		$	-

See accompanying notes to the unaudited financial statements.

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FRANKLIN BITCOIN ETF

A SERIES OF FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Statements of Changes in Net Assets (Unaudited)



		For the Three Months Ended September 30,						For the Six Months Ended September 30,
		2025			2024			2025			2024

Net assets, beginning of period	$	559,429,215		$	373,054,934		$	410,857,343		$	341,901,105
Net investment loss		(296,673	)		(123,285	)		(533,982	)		(123,285	)
Net realized gain (loss) on investment in bitcoin		7,290,973			(1,325,741	)		16,310,184			(1,156,994	)
Net change in unrealized appreciation (depreciation) on investment in bitcoin		21,116,054			4,121,057			140,634,961			(32,337,968	)
Net increase (decrease) in net assets resulting from operations		28,110,354			2,672,031			156,411,163			(33,618,247	)
Capital Share Transactions:
Contributions for Shares issued		92,885,565			107,983,445			148,387,208			209,726,374
Distributions for Shares redeemed		(19,374,669	)		(31,419,769	)		(54,605,249	)		(65,718,591	)
Net increase (decrease) in net assets from capital share transactions		73,510,896			76,563,676			93,781,959			144,007,783
Net assets, end of period	$	661,050,465		$	452,290,641		$	661,050,465		$	452,290,641

See accompanying notes to the unaudited financial statements.

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FRANKLIN BITCOIN ETF

A SERIES OF FRANKLIN TEMPLETON DIGITAL HOLDINGS TRUST

Notes to Financial Statements (Unaudited)

1. ORGANIZATION

The Franklin Templeton Digital Holdings Trust (the "Trust") was formed as a Delaware statutory trust on September 6, 2023, and is governed by the provisions of an Agreement and Declaration of Trust dated as of January 5, 2024 (the "Declaration of Trust"). The Trust, as registrant is not registered as an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act") and is not a commodity pool for purposes of the Commodity Exchange Act ("CEA"). The accompanying financial statements relate to the one series that the Trust currently offers, the Franklin Bitcoin ETF (the "Fund"). The Trust had no operations prior to the commencement of operations of the Fund on January 11, 2024, other than matters relating to its organization and the registration of the Fund under the Securities Act of 1933, as amended (the "Securities Act"). The Sponsor of the Trust and the Fund (the "Sponsor") is Franklin Holdings, LLC. The Sponsor is a Delaware limited liability company formed on July 21, 2021. The Sponsor is not subject to regulation by the Commodity Futures Trading Commission ("CFTC") as a commodity pool operator with respect to the Fund, or a commodity trading advisor with respect to the Fund. The Fund issues shares (the "Shares"), which represent units of fractional undivided beneficial interest in the Fund. The Shares of the Fund are listed on the Cboe BZX Exchange, Inc. ("Cboe BZX Exchange" or the "Exchange"). The Shares were first listed for trading and the Fund commenced operations on January 11, 2024.

BNY Mellon Asset Servicing, a division of The Bank of New York Mellon, or "BNYM," is the Fund's Administrator (the "Administrator") and Transfer Agent (the "Transfer Agent"). BNYM also serves as the custodian of the Fund's cash (the "Cash Custodian"). The Administrator is generally responsible for the day-to-day administration of the Fund, including the calculation of the Fund's net asset value ("NAV") per Share. The Bitcoin Custodian is responsible for safekeeping the bitcoin owned by the Fund. The Bitcoin Custodian is Coinbase Custody Trust Company, LLC ("Coinbase Custody"). Coinbase Inc., an affiliate of the Bitcoin Custodian, is the Fund's Prime Broker. CSC Delaware Trust Company, a subsidiary of the Corporation Service Company (the "Trustee"), is the sole trustee of the Trust. Franklin Distributors, LLC is the marketing agent of the Fund (the "Marketing Agent").

The Fund is an "emerging growth company" as that term is used in the Securities Act of 1933, as amended (the "Securities Act"), and, as such, the Trust may elect to comply with certain reduced public company reporting requirements.

The accompanying Statements of Assets and Liabilities and Schedules of Investments at September 30, 2025 and March 31, 2025 and the Statements of Operations, Statements of Cash Flows and Statements of Changes in Net Assets for the period ended September 30, 2025 and September 30, 2024, have been prepared on behalf of the Trust, as registrant, combined with its one currently offered series, the Fund (included above in a separate section of this report), and for the Fund separately, and are unaudited. In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal recurring adjustments) necessary to state fairly the financial position and results of operations for all periods stated have been made. In addition, interim period results are not necessarily indicative of results for a full-year period. These financial statements and the notes thereto should be read in conjunction with the Fund's financial statements included in the Annual Report on Form 10-K for the fiscal year ended March 31, 2025.

The fiscal year of the Trust and the Fund is March 31st.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed by the Trust and the Fund.

2.1. Basis of Presentation

The Sponsor has determined that the Fund falls within the scope of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 946, Financial Services-Investment Companies, and has concluded that solely for accounting purposes, the Trust is classified as an Investment Company as defined in ASC 946.

The financial statements are presented for the Fund, which is the sole series of the Trust. Financial statements for the Trust, as the registrant, combined with the Fund are provided separately in this report. For the periods presented, there were no balances or activity for the Trust except for the Fund's operations, as its sole series. These notes to the financial statements relate to the Fund, which is the sole series of the Trust. The debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the Fund are enforceable only against the assets of the Fund and not against the assets of the Trust generally or any other series that the Trust may establish. Combined financial statements for the Trust as registrant, and the Fund are presented separately within this report.

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2.2. Calculation of NAV and NAV per Share

2.3. Valuation of Bitcoin

The Fund's financial statements are prepared in accordance with GAAP for interim financial information. Bitcoin is priced at 11:59:59PM ET. The Fund determines the fair value of bitcoin based on the price provided by the bitcoin market that the Fund considers its "Principal Market" as of 11:59:59PM ET on the valuation date. This fair value price is referred to as "Principal Market Price". With respect to the Fund's bitcoin holdings, the Trust follows the provisions of the Financial Accounting Standards Board Accounting Standards Codification Topic 820, "Fair Value Measurements and Disclosures" ("ASC Topic 820") and utilize an exchange-traded price from the Fund's principal market (or in the absence of a principal market, the most advantageous market) for bitcoin as of the Fund's financial statement measurement date.

ASC 820 established a hierarchy that prioritized inputs to valuation techniques used to measure fair value. The three levels of inputs are:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 3: Inputs that are unobservable for the asset or liability, including the Fund's assumptions used in determining the fair value of investments.

On September 30, 2025 and March 31, 2025, the value of the bitcoin held by the Fund is categorized as Level 1.

2.4. Fees, Expenses, and Realized Gains (Losses)

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There have been no extraordinary or non-routine expenses during the periods presented.

2.5. Income Taxes

2.6. Creation and Redemption of Shares

As of the end of the period covered by this report, the Authorized Participants deliver only cash to create Shares and receive only cash when redeeming Shares in the manner as described above.

Changes in the Shares for the quarter from July 1, 2025 to September 30, 2025 are as follows:


	Shares			Amount^
Balance at July 1, 2025	8,900,000		$	260,699,671
Creation of Shares	1,400,000			92,885,565
Redemption of Shares	(300,000	)		(19,374,669	)
Balance at September 30, 2025	10,000,000		$	334,210,567

Changes in the Shares for the quarter July 1, 2024 to September 30, 2024 are as follows:


	Shares			Amount^
Balance at July 1, 2024	10,150,000		$	348,068,049
Creation of Shares	3,050,000			107,983,445
Redemption of Shares	(950,000	)		(31,419,769	)
Balance at September 30, 2024	12,250,000		$	424,631,725

Changes in the Shares for the period April 1, 2025 to September 30, 2025 are as follows:


	Shares			Amount^
Balance at April 1, 2025	8,550,000		$	240,428,608
Creation of Shares	2,450,000			148,387,208
Redemption of Shares	(1,000,000	)		(54,605,249	)
Balance at September 30, 2025	10,000,000		$	334,210,567

Changes in the Shares for the period April 1, 2024 to September 30, 2024 are as follows:


	Shares			Amount^
Balance at April 1, 2024	8,350,000		$	280,623,942
Creation of Shares	5,850,000			209,726,374
Redemption of Shares	(1,950,000	)		(65,718,591	)
Balance at September 30, 2024	12,250,000		$	424,631,725

^ Dollar amount of balance represents the cumulative fair value of creation of shares less the redemption of shares, at the time of the specific creation or redemption.

3. INVESTMENT IN BITCOIN

The following represents the changes in quantity of bitcoin held and the respective fair value during the quarter July 1, 2025 to September 30, 2025:


	Amount in bitcoin			Amount in US$
Balance at July 1, 2025	5,155.3659		$	559,666,521
Bitcoin purchased for the creation of Shares	810.3845			92,885,565
Bitcoin sold for the redemption of Shares	(173.6506	)		(19,374,669	)
Principal on bitcoin sales to pay expenses	(2.1359	)		(237,340	)
Net realized gain (loss) from bitcoin sold for the redemption of shares and sold to pay expenses	-			7,290,973
Net change in unrealized appreciation (depreciation) on investment in bitcoin	-			21,116,054
Balance at September 30, 2025	5,789.9639		$	661,347,104

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The following represents the changes in quantity of bitcoin held and the respective fair value during the quarter July 1, 2024 to September 30, 2024:


	Amount in bitcoin			Amount in US$
Balance at July 1, 2024	5,886.9982		$	373,054,955
Bitcoin purchased for the creation of Shares	1,768.8331			107,983,297
Bitcoin sold for the redemption of Shares	(550.9655	)		(31,419,621	)
Principal on bitcoin sales to pay expenses	(1.0170	)		(57,689	)
Net realized gain (loss) from bitcoin sold for the redemption of shares	-			(1,325,741	)
Net change in unrealized appreciation (depreciation) on investment in bitcoin	-			4,121,057
Balance at September 30, 2024	7,103.8488		$	452,356,258

The following represents the changes in quantity of bitcoin held and the respective fair value during the six months April 1, 2025 to September 30, 2025:


	Amount in bitcoin			Amount in US$
Balance at April 1, 2025	4,956.3464		$	411,158,674
Bitcoin purchased for the creation of Shares	1,418.5352			148,387,208
Bitcoin sold for the redemption of Shares	(579.0817	)		(54,605,249	)
Principal on bitcoin sales to pay expenses	(5.8360	)		(538,674	)
Net realized gain (loss) from bitcoin sold for the redemption of shares	-			16,310,184
Net change in unrealized appreciation (depreciation) on investment in bitcoin	-			140,634,961
Balance at September 30, 2025	5,789.9639		$	661,347,104

The following represents the changes in quantity of bitcoin held and the respective fair value during the six months April 1, 2024 to September 30, 2024:


	Amount in bitcoin			Amount in US$
Balance at April 1, 2024	4,842.9986		$	341,901,126
Bitcoin purchased for the creation of Shares	3,392.8311			209,726,374
Bitcoin sold for the redemption of Shares	(1,130.9639	)		(65,718,591	)
Principal on bitcoin sales to pay expenses	(1.0170	)		(57,689	)
Net realized gain (loss) from bitcoin sold for the redemption of shares	-			(1,156,994	)
Net change in unrealized appreciation (depreciation) on investment in bitcoin	-			(32,337,968	)
Balance at September 30, 2024	7,103.8488		$	452,356,258

4. RELATED PARTIES

5. CONCENTRATION OF RISK

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6. FINANCIAL HIGHLIGHTS


	For the Three Months Ended September 30,						For the Six Months Ended September 30,
		2025			2024			2025			2024

Net asset value per Share, beginning of period	$	62.86		$	36.75		$	48.05		$	40.95
Net investment loss^(a)		(0.03	)		(0.01	)		(0.06	)		(0.01	)
Net realized and unrealized gain (loss) on investment in bitcoin		3.28			0.18			18.12			(4.02	)
Net change in net assets from operations^(b)		3.25			0.17			18.06			(4.03	)
Net asset value per Share, end of period	$	66.11		$	36.92		$	66.11		$	36.92

Total return, at net asset value^(c)(d)		5.17	%		0.46	%		37.59	%		(9.84	)%

Ratio to average net assets^(e)
Net investment loss		(0.19	)%		(0.12	)%		(0.19	)%		(0.06	)%
Gross expenses		0.19	%		0.19	%		0.19	%		0.19	%
Net expenses		0.19	%		0.12	%(f)		0.19	%		0.06	%(f)

(a)

Calculated using average Shares outstanding.

(b)

(c)

Calculation based on the change in net asset value of a Share during the period. Total return for periods of less than a year are not annualized.

(d)

(e)

Annualized.

(f)

7. COMMITMENTS AND CONTINGENCIES

8. INDEMNIFICATION

9. OPERATING SEGMENTS

For information regarding segment assets, segment profit or loss, and significant expense, refer to the Statements of Assets and Liabilities and the Statements of Operations, along with the related Notes to Financial Statements. The Schedules of Investments provide details of the Fund's investments that generate returns such as realized and unrealized gains or losses. Performance metrics and expense ratios are disclosed in the Financial Highlights.

10. SUBSEQUENT EVENTS

The Trust and the Fund have evaluated subsequent events through the issuance of the financial statements and determined that no such events have occurred that require disclosure.

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Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

This information should be read in conjunction with the financial statements and notes included in Item 1 of Part I of this Form 10-Q. This Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements involve risks and uncertainties. All statements (other than statements of historical fact) included in this Form 10-Q that address activities, events or developments that may occur in the future, including such matters as future bitcoin prices, bitcoin sales, costs, objectives, changes in commodity prices and market conditions (for bitcoin and the shares), the Trust's and the Fund's operations, the Sponsor's plans and references to the Trust's and the Fund's future success and other similar matters are forward-looking statements. Words such as "could," "would," "may," "expect," "intend," "estimate," "predict," and variations on such words or negatives thereof, and similar expressions that reflect our current views with respect to future events and Fund performance, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties that are difficult to predict and many of which are outside of our control, and actual results could differ materially from those discussed. Forward-looking statements involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed therein. We express our estimates, expectations, beliefs, and projections in good faith and believe them to have a reasonable basis. However, we make no assurances that management's estimates, expectations, beliefs, or projections will be achieved or accomplished. These forward-looking statements are based on assumptions about many important factors that could cause actual results to differ materially from those in the forward-looking statements. We do not intend to update any forward-looking statements even if new information becomes available or other events occur in the future, except as required by the federal securities laws.

Organization and Trust Overview

The Shares were first listed for trading and the Fund commenced operations on January 11, 2024.

The Fund issues Shares only to eligible financial institutions called Authorized Participants and only in one or more blocks of 50,000 Shares ("Creation Units"). Creation Units are redeemable only by Authorized Participants. Creation Units are issued and redeemed in exchange for cash. Individual Shares will not be redeemed by the Fund but the Shares are listed and traded on the Exchange under the ticker symbol "EZBC". The market price of the Shares may be different than the Fund's NAV per Share. The Fund issues Shares in Creation Units on a continuous basis at the applicable NAV per Share on the creation order date.

The Fund's only ordinary recurring expense is expected to be the Sponsor's fee. In exchange for the Sponsor's fee, the Sponsor has agreed to assume the ordinary fees and expenses incurred by the Fund, including but not limited to the following: the fees charged by the Administrator, the Marketing Agent, the Custodians and the Trustee, Cboe BZX Exchange listing fees, typical maintenance and transaction fees of the DTC, SEC registration fees, printing and mailing costs, tax reporting fees, audit fees, license fees and expenses, and up to $500,000 per annum in ordinary legal fees and expenses. The Sponsor paid the costs of the Fund's organization and the initial offering costs, and may not seek reimbursement of such costs.

The Sponsor's fee is accrued daily at an annualized rate equal to 0.19% of the net asset value of the Fund and is payable at least quarterly in arrears in U.S. dollars or in-kind or any combination thereof. The Sponsor may, at its sole discretion and from time to time, waive all or a portion of the Sponsor's 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 Fund will sell bitcoin as needed to pay the Sponsor's fee. The Fund bears transaction costs, including any bitcoin network fees or other similar transaction fees, in connection with any sales of bitcoin necessary to pay the Sponsor's fee, as well as other Fund expenses (if any) that are not assumed by the Sponsor (expenses assumed by the Sponsor are specified above). Any bitcoin network fees and similar transaction fees incurred in connection with the creation or redemption of Creation Units are borne by the Authorized Participant. For a period from January 12, 2024 to August 2, 2024, the Sponsor waived a portion of the Sponsor's Fee so that the Sponsor's Fee after the fee waiver would be equal to 0.00% of the net asset value of the Fund for the first $10.0 billion of the Fund's assets. Fees accrued for the quarter ended September 30, 2025 were $296,639. Prior to the implementation of the waiver, for the one day period January 11, 2024, the Fund accrued the Sponsor fee of 0.29% ($21). In the future, if the Sponsor decides to waive all or a portion of the Sponsor's Fee, Shareholders will be notified in a prospectus supplement, in the Fund's periodic reports and/or on the Fund's website for the Fund.

The Fund is an "emerging growth company" as that term is used in the Securities Act of 1933, as amended (the "Securities Act"), and, as such, the Fund may elect to comply with certain reduced public company reporting requirements.

The NAV of the Trust is used by the Trust in its day-to-day operations to measure the net value of the Trust's assets. The NAV is calculated on each business day and is equal to the aggregate value of the Trust's assets less its liabilities based on the Index price. In determining the NAV of the Trust on any business day, the Administrator will calculate the price of the bitcoin held by the Trust as of 4:00 PM ET on such day. The Administrator will also calculate the "NAV per Share" of the Trust, which equals the NAV of the Trust divided by the number of outstanding Shares. For purposes of making these calculations, a business day means any day other than a day when the Exchange is closed for regular trading.

The Administrator will rely on the Index as the index price to be used when determining NAV. However, determining the value of the Trust's bitcoin using the Index is not in accordance with GAAP, and therefore is not used in the Trust's financial statements. The Trust's bitcoins are carried, for financial statement purposes, at fair value, as required by GAAP. The Trust determines the fair value of bitcoin based on the price provided by the bitcoin market that the Trust considers its "principal market" as of 11:59:59 PM, ET on the valuation date. The net asset value of the Trust determined on a GAAP basis is referred to as the "Principal Market NAV" and the net asset value of the Trust per Share determined on a GAAP basis is referred to as the "Principal Market NAV per Share."

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The Sponsor identifies and determines the Fund's principal market (or in the absence of a principal market, the most advantageous market) for bitcoin consistent with the application of fair value measurement framework in FASB ASC 820-10. The principal market is the market where the reporting entity would normally enter into a transaction to sell the asset or transfer the liability. The principal market must be available to and be accessible to the reporting entity. The reporting entity is the Trust, on behalf of the Fund.

Under ASC 820-10, a principal market is generally the market with the greatest volume and activity level for the asset or liability. The determination of the principal market will generally be based on the market with the greatest volume and level of activity that can be accessed.

NAV and NAV per Share are not measures calculated in accordance with GAAP and are not intended as substitute for Principal Market and Principal Market NAV per Share, respectively.

Critical Accounting Policies

The Trust's and the Fund's financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements relies on estimates and assumptions that impact the Fund's as well as the Trust's financial position and results of operations. These estimates and assumptions affect the Fund's as well as the Trust's application of accounting policies. A description of the valuation of bitcoin, a critical accounting policy that is important to understanding the results of operations and financial position of the Trust and the Fund is presented in the Trust's Annual Report on Form 10-K in the section entitled "Calculation of Net Asset Value, Valuation of Bitcoin and The CF Benchmark Index." In addition, please refer to Note 2 to the financial statements included in this report for further discussion of the Trust's and the Fund's accounting policies.

Discussion of Operations

At September 30, 2025, the Custodian held 5,789.9639 bitcoins on behalf of the Fund, with a market value of $661,347,104 (cost: $423,536,877) based on the Principal Market Price at period end.

Results of Operations for the three months ended September 30, 2025

For the three months ended September 30, 2025, 1,400,000 Shares were issued in exchange for 810.3845 of bitcoin and 300,000 Shares were redeemed in exchange for 173.6506 of bitcoin. The Fund's NAV per Share began the period at $62.86 and ended the period at $66.11. The 5.17% increase in the Fund's NAV from $62.86 at June 30, 2025 to $66.11 at September 30, 2025 is directly related to the 5.22% increase in the price of bitcoin. The Fund's NAV increased slightly less than the price of bitcoin on a percentage basis due to the Sponsor's fee of $296,673 for the period.

Net realized and change in unrealized gain on investment in bitcoin for the three months ended September 30, 2025, was approximately $28,407,027 which includes a realized gain of $93,759 on the sale of bitcoin to pay the Sponsor Fee, net realized gain on investment in bitcoin sold for redemptions of $7,197,214 and net change in unrealized appreciation on investment in bitcoin of approximately $21,116,054. Net realized and change in unrealized gain on investment in bitcoin for the period was driven by bitcoin price appreciation from $108,560.00 per unit as of June 30, 2025 to $114,223.01 per unit as of September 30, 2025. Net increase in net assets resulting from operation was approximately $28,110,354 for the three months ended September 30, 2025, which consisted of the net realized and change in unrealized gain on investment in bitcoin of $28,407,027, offset by the Sponsor Fee of $296,673. Net assets increased to approximately $661,050,465 on September 30, 2025. The increase in net assets primarily resulted from the aforementioned bitcoin price appreciation and net capital share transactions of approximately of $73,510,896.

Results of Operations for the three months ended September 30, 2024

For the three months ended September 30, 2024, 3,050,000 Shares were issued in exchange for 1,768.8331 bitcoins and 950,000 Shares were redeemed in exchange for 550.9655 bitcoins. The Fund's NAV per Share began the period at $36.75 and ended the period at $36.92. The increase in NAV per Share was due to a higher price of bitcoin of $63,677.63 at period end, which represented an increase of 0.49% from $63,369.30 at June 30, 2024.

The change in net assets from operations for the three months ended September 30, 2024 was $2,672,031, which was due to (i) payment of the Sponsor's Fee of $192,723, (ii) Less waiver and reimbursement of $69,438, and (iii) a net change in realized gain (loss) from bitcoin sold for redemptions and unrealized appreciation on investment in bitcoin of $2,795,316.

Results of Operations for the six months ended September 30, 2025

For the six months ended September 30, 2025, 2,450,000 Shares were issued in exchange for 1,418.5352 of bitcoin and 1,000,000 Shares were redeemed in exchange for 579.0817 of bitcoin. The Fund's NAV per Share began the period at $48.05 and ended the period at $66.11. The 37.59% increase in the Fund's NAV from $48.05 at March 31, 2025 to $66.11 at September 30, 2025 is directly related to the 37.69% increase in the price of bitcoin. The Fund's NAV increased slightly less than the price of bitcoin on a percentage basis due to the Sponsor's fee of $533,982 for the period.

Net realized and change in unrealized gain on investment in bitcoin for the six months ended September 30, 2025, was approximately $156,945,145 which includes a realized gain of $157,400 on the sale of bitcoin to pay the Sponsor Fee, net realized gain on investment in bitcoin sold for redemptions of $16,152,784 and net change in unrealized appreciation on investment in bitcoin of approximately $140,634,961. Net realized and change in unrealized gain on investment in bitcoin for the period was driven by bitcoin price appreciation from $82,956.00 per unit as of March 31, 2025 to $114,223.01 per unit as of September 30, 2025. Net increase in net assets resulting from operation was approximately $156,411,163 for the six months ended September 30, 2025, which consisted of the net realized and change in unrealized gain on investment in bitcoin of $156,945,145, offset by the Sponsor Fee of $533,982. Net assets increased to approximately $661,050,465 on September 30, 2025. The increase in net assets primarily resulted from the aforementioned bitcoin price appreciation and net capital share transactions of approximately of $93,781,959.

Results of Operations for the six months ended September 30, 2024

For the six months ended September 30, 2024, 5,850,000 Shares were issued in exchange for 3,392.8311 bitcoins and 1,950,000 Shares were redeemed in exchange for 1,130.9639 bitcoins. The Fund's NAV per Share began the period at $40.95 and ended the period at $36.92. The decrease in NAV per Share was due to a lower price of bitcoin of $63,677.63 at period end, which represented a decrease of 9.80% from $70,596.99 at March 31, 2024.

For the six months ended September 30, 2024, net decrease in net assets resulting from operations was $33,618,247, which was due to (i) payment of the Sponsor's Fee of $368,406, (ii) Less waiver and reimbursement of $245,121, and (iii) net realized loss and change in unrealized depreciation on investment in bitcoin of $33,494,962.

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Liquidity and Capital Resources

The Fund is not aware of any trends, demands, commitments, events, or uncertainties that are reasonably likely to result in material changes to its liquidity needs. The Fund's only ordinary recurring expense is expected to be the Sponsor's fee. In exchange for the Sponsor's fee, the Sponsor has agreed to assume the ordinary fees and expenses incurred by the Fund, including but not limited to the following: the fees charged by the Administrator, the Marketing Agent, the Custodians and the Trustee, Cboe BZX Exchange listing fees, typical maintenance and transaction fees of the DTC, SEC registration fees, printing and mailing costs, tax reporting fees, audit fees, license fees and expenses, up to $500,000 per annum in ordinary legal fees and expenses. The Sponsor will also pay the costs of the Fund's organization and the initial offering costs, and may not seek reimbursement of such costs.

The Fund bears transaction costs, including any bitcoin network fees or other similar transaction fees, in connection with any sales of bitcoin necessary to pay the Sponsor's fee, as well as other Fund expenses (if any) that are not assumed by the Sponsor (expenses assumed by the Sponsor are specified above). Any bitcoin network fees and similar transaction fees incurred in connection with the creation or redemption of Creation Units are borne by the Authorized Participant.

Off-Balance Sheet Arrangements

At September 30, 2025 and March 31, 2025, the Fund as well as the Trust did not have any off-balance sheet arrangements

Historical Bitcoin Prices

Analysis of Movements in the Price of Bitcoin

As movements in the price of bitcoin are expected to directly affect the price of the Fund's shares, it is important for investors to understand and follow movements in the price of bitcoin. Past movements in the bitcoin price are not indicators of future movements.

The following chart shows movements in the price of bitcoin based on the CME CF Bitcoin Reference Rate - New York Variant for the Bitcoin - U.S. Dollar trading pair (the "CF Benchmarks Index") in U.S. dollars per unit over the period from July 1, 2025 to September 30, 2025.

The average, high, low and end-of-period bitcoin prices based on the CME CF Bitcoin Reference Rate - New York Variant for the period are as below:


Period	Average	High	Date	Low	Date	End of period (1)	Last business day
July 1, 2025 to September 30, 2025	114,533.49	122,314.74	Aug 13, 2025	105,609.11	July 1, 2025	114,084.80	Sep 30, 2025

(1) The end of period bitcoin price is the CME CF Bitcoin Reference Rate - New York Variant on the last business day of the period.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

The Fund is a passive investment vehicle. It is not actively managed. The investment objective of the Fund is to seek to reflect generally the performance of the price of bitcoin before payment of the Fund's expenses and liabilities. Fluctuations in the price of bitcoin will affect the value of the Fund's Shares.

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Item 4.

Controls and Procedures

Disclosure Controls and Procedures

The duly authorized officers of the Sponsor, performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, have evaluated the effectiveness of the Trust's disclosure controls and procedures, and have concluded as of the end of the period covered by this report on Form 10-Q that the disclosure controls and procedures of the Trust operated effectively at reasonable assurance levels.

The disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that the Trust files or submits under the Securities Exchange Act of 1934, as amended, are recorded, processed, summarized and reported, within the time period specified in the applicable rules and forms, and that such information is accumulated and communicated to the duly authorized officers of the Sponsor performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, as appropriate, to allow timely decisions regarding required disclosure. It is important to note that no set of controls, no matter how reasonably designed, can detect every error.

The duly authorized officers of the Sponsor, performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, have evaluated the effectiveness of the Fund's disclosure controls and procedures, and have concluded as of the end of the period covered by this report on Form 10-Q that the disclosure controls and procedures of the Fund operated effectively at reasonable assurance levels.

The disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that the Trust files or submits under the Securities Exchange Act of 1934, as amended, on behalf of the Fund, are recorded, processed, summarized and reported, within the time period specified in the applicable rules and forms, and that such information is accumulated and communicated to the duly authorized officers of the Sponsor performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, as appropriate, to allow timely decisions regarding required disclosure. It is important to note that no set of controls, no matter how reasonably designed, can detect every error.

Internal Control Over Financial Reporting

There were no changes in the Trust's and the Fund's internal control over financial reporting that occurred during the fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Trust's and/or the Fund's internal control over financial reporting.

Each of the Sarbanes-Oxley certifications included as exhibits to this filing apply with respect to both the operations of both the Fund, as the sole series of the Trust, and the Trust as registrant.

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Part II. OTHER INFORMATION

Item 1.

Legal Proceedings

From time to time, the Trust and/or the Fund may be a party to certain legal proceedings in the ordinary course of business. As of November 13, 2025, the Trust and the Fund are not subject to any material legal proceedings, nor, to our knowledge, are any material legal proceeding threatened against the Trust or Fund.

Item 1A.

Risk Factors

You should carefully consider the factors discussed in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K filed with the SEC for the fiscal year ended March 31, 2025, which could materially affect our business, financial condition or future results. Except as noted below, there have been no material changes in our risk factors from those disclosed in our 2025 Annual Report on Form 10-K.

The risks described in our Annual Report on Form 10-K are not the only risks facing the Trust and the Fund. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Prices of bitcoin may be affected due to stablecoins (including Tether and USDC), the activities of stablecoin issuers and their regulatory treatment

While the Fund does not invest in stablecoins, it may nonetheless be exposed to risks that stablecoins pose for the bitcoin market and other digital asset markets. Stablecoins are digital assets designed to have a stable value over time as compared to typically volatile digital assets and are typically marketed as being pegged to a fiat currency, such as the U.S. dollar, at a certain value. Although the prices of stablecoins are intended to be stable, their market value may fluctuate. This volatility has in the past apparently impacted the price of bitcoin. Stablecoins are a relatively new phenomenon, and it is impossible to know all of the risks that they could pose to participants in the bitcoin market. Like CBDCs, stablecoins could compete with, or replace, bitcoin and other digital assets as a medium of exchange or store of value. In addition, some have argued that some stablecoins, particularly Tether, are improperly issued without sufficient backing in a way that, when the stablecoin is used to pay for bitcoin, could cause artificial rather than genuine demand for bitcoin, artificially inflating the price of bitcoin, and also argue that those associated with certain stablecoins may be involved in laundering money.

USDC is a reserve-backed stablecoin issued by Circle Internet Financial that is commonly used as a method of payment in digital asset markets, including the bitcoin market. While USDC is designed to maintain a stable value at 1 U.S. dollar at all times, on March 10, 2023, the value of USDC fell below $1.00 for multiple days after Circle Internet Financial disclosed that US$3.3 billion of the USDC reserves were held at Silicon Valley Bank, which had entered FDIC receivership earlier that day. Stablecoins are reliant on the U.S. banking system and U.S. treasuries, and the failure of either to function normally could impede the function of stablecoins, and therefore could adversely affect the value of the Shares.

Given the foundational role that stablecoins play in global digital asset markets, their fundamental liquidity can have a dramatic impact on the broader digital asset market, including the market for bitcoin. A significant portion of the digital asset market continues to depend on stablecoins such as Tether and USDC. As such, any disruption in the operation or perceived stability of these stablecoins such as a disorderly de-pegging event or a loss of market confidence resulting in a run on reserves could lead to substantial market volatility across digital assets more broadly.

Additional risks such as operational failures (e.g., technical issues that prevent settlement), concerns regarding the adequacy or transparency of reserve assets backing stablecoins, the use of unbacked or undercollateralized stablecoins in potentially manipulative trading practices and regulatory scrutiny of stablecoin issuers or intermediaries, including exchanges that facilitate stablecoin transactions, may also adversely affect market confidence and liquidity. Further, these risks are underscored by recent legislative developments. On July 18, 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 ("GENIUS Act") was enacted, establishing a federal regulatory framework for payment stablecoins. The GENIUS Act will become effective on July 18, 2028. The GENUIS Act prohibits the issuance or use of payment stablecoins unless the issuer obtains a qualifying license and complies with a range of regulatory requirements, including reserve backing with liquid assets, redemption rights, governance standards, and operational transparency. The GENIUS Act also restricts the payment of interest on stablecoins and imposes oversight on both bank and nonbank issuers. The enactment of the GENIUS Act, or the removal or migration of prominent stablecoins from the Bitcoin network, could reduce the willingness of market participants to engage in digital asset transactions that rely on stablecoins, diminish liquidity in the bitcoin market, and adversely affect the price of bitcoin. Any such developments could, in turn, materially and adversely impact the value of the Shares.

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Disruptions or other problems in the supply chain for bitcoin mining hardware and difficulties in obtaining new hardware could cause harm to the Bitcoin network

Manufacture, assembly and delivery of hardware and components for mining operations can be complex and protracted processes, in the course of which various problems could arise, including disruptions or delays in the supply chain, product quality control issues, as well as other external factors.

Mining operations can ordinarily only be profitable if the costs associated with bitcoin mining, including hardware costs, are lower than the price of bitcoin itself. In the course of the normal operation of bitcoin mining facilities, miners and other critical equipment and materials related to data center construction and maintenance, such as containers, switch gears, transformers and cables, will experience ordinary wear and tear and may also face more significant malfunctions. Declines in the condition of miners and other hardware will require bitcoin miners, over time, to repair or replace those miners.

Additionally, as the technology evolves, miners may be required to acquire newer models of mining hardware and machines to remain competitive in the market. Any upgrading process may require substantial capital investment, and miners may face challenges in doing so on a timely and cost-effective basis. The business of bitcoin miners will be subject to limitations inherent within the supply chain of their mining hardware equipment and components, including competitive, governmental, and legal limitations, and other events. For example, many miners will significantly rely on foreign imports to obtain mining hardware equipment and materials. Any global trade disruption, introductions of tariffs, trade barriers and bilateral trade frictions, together with any potential downturns in the global economy resulting therefrom, could adversely affect the necessary supply chains for mining hardware. Depending on the magnitude of such effects on the mining hardware supply chain, shipments of parts for mining hardware, or new mining hardware and equipment, may be delayed.

There are a small number of major suppliers of bitcoin mining hardware globally, and a significant amount of bitcoin mining hardware manufacturing is located in China. Mining hardware manufacturers may fail to supply the mining hardware due to their inability to manufacture sufficient mining hardware, whether due to shortages of components or resources such as semiconductors, or changes of laws and trade restrictions (including export/import restrictions, quotas or tariffs), or due to insolvency, or non-performance or default on their contracts. Trade policies such as export/import restrictions, quotas or tariffs may reduce the ability of bitcoin mining hardware suppliers to supply miners with bitcoin mining hardware or create a shortage or lack of components necessary for their manufacture or repair. If bitcoin miners are unable to source mining hardware from those suppliers (for example due to overwhelming global demand for bitcoin miners, or due to trade restrictions, or other causes) at commercially reasonable prices, or at all, and replacement or substitute sources of bitcoin mining hardware prove to be unavailable, there could be a negative impact on bitcoin mining globally. These could affect the Bitcoin network by making it more difficult for transactions to be confirmed, increase transaction costs, or affect the Bitcoin network's security, among other negative effects, any of which could negatively affect the value of bitcoin and consequently the Shares.

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Further, the first-generation application specific integrated circuit ("ASIC") chips and other critical components for mining equipment may be subject to price fluctuations or shortages. For example, the ASIC chip is the key component of a mining machine as it determines the efficiency of the device. The production of ASIC chips typically requires highly sophisticated silicon wafers, which currently only a small number of fabrication facilities, or wafer foundries, in the world are capable of producing. There have been previous microchip shortages which led to price fluctuations and disruption in the supply of key bitcoin mining hardware components. ASIC chips have recently been subject to supply and demand fluctuations, significant price increases and shortages. Shortages of ASIC chips could create problems in the supply chain for bitcoin mining equipment, negatively affecting the Bitcoin network by making it more difficult for transactions to be confirmed or increasing transaction costs, or even affecting network security, which again could cause the value of bitcoin and the Shares to decline.

If regulators or public utilities take actions that restrict or otherwise impact mining activities, such actions could result in decreased security of a digital asset network, including the Bitcoin network, which could adversely affect the value of the Shares

Concerns have been raised about the electricity required to secure and maintain digital asset networks. Although measuring the electricity consumed by the process of securing and maintaining digital asset networks is difficult because these operations are performed by various machines with varying levels of efficiency, the process consumes a significant amount of energy. Driven by concerns around energy consumption and the impact on public utility companies, various states and cities have implemented, or are considering implementing, moratoriums on mining activity in their jurisdictions.

The operations of digital asset networks can consume significant amounts of electricity, which may have a negative environmental impact and give rise to public opinion against allowing, or government regulations restricting, the use of electricity for mining operations, in the case of proof-of-work networks. Additionally, miners on proof-of-work networks may be forced to cease operations during an electricity shortage or power outage, or if electricity prices increase where the mining activities are performed.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Not applicable.

The Fund does not purchase Shares directly from its Shareholders. In connection with its redemption of Creation Units held by Authorized Participants, the Fund redeemed 6 Creation Units (comprising 300,000 Shares) during the quarter ended September 30, 2025. The following table summarizes the redemptions by Authorized Participants during the period:


Period	Total Shares Redeemed		Average Price Per Share
July 1, 2025 - July 31, 2025	-	$	-
August 1, 2025 - August 31, 2025	150,000		65.63
September 1, 2025 - September 30, 2025	150,000		63.54

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

None.

Item 5.

Other Information

No officers or directors of the Sponsor have adopted, modified or terminated trading plans under either a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933) for the six-month period ended September 30, 2025.

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Item 6.

Exhibits

See the Exhibit Index below, which is incorporated by reference herein.

EXHIBIT INDEX


Exhibit No.	Description of Exhibit

31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	Inline XBRL Instance Document

101.SCH	Inline XBRL Taxonomy Extension Schema Document

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned in the capacities* indicated thereunto duly authorized.

Franklin Holdings, LLC

Sponsor of the Franklin Templeton Digital Holdings Trust (registrant)


By:	/s/ David Mann*
	David Mann
	President and Chief Executive Officer
	(serving in the capacity of principal executive officer)


By:	/s/ Matthew Hinkle*
	Matthew Hinkle
	Chief Financial Officer
	(serving in the capacity of principal financial officer)

Date: November 13, 2025

* The registrant is a trust and the person is signing in his capacity as an officer of Franklin Holdings, LLC, the Sponsor of the registrant.

Franklin Templeton Digital Holdings Trust published this content on November 13, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 13, 2025 at 19:52 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]

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