Tidal Trust II (DIPS)

Tidal Trust II: A Comprehensive Overview

Company Profile

A. Detailed History and Background

Tidal Trust II is a real estate investment trust (REIT) that has existed since February 3, 2023. The entity doesn't hold any direct interest in assets and primarily serves as the master trust of Tidal ETF Trust, established by Grayscale Investments on October 31, 2022. Tidal ETF Trust itself focuses on Bitcoin and Ether funds. As of November 21, 2023, Tidal Trust II's NAV was $60,990,862.

This trust is unique due to its connection with Grayscale's exchange-traded products (ETPs). While Tidal does not hold the assets directly, these ETPs have been liquidated, and proceeds were returned to the trust. Therefore, Tidal Trust II primarily functions as the investment vehicle. It's crucial to follow Tidal ETF Trust (GBTC.U) when seeking information about investment holdings and management.

B. Core Business Areas and Leadership

As mentioned, Tidal Trust II itself doesn't actively manage investments or directly hold assets. Its primary role is as the master trust for the investment structure involving Bitcoin and Ether ETPs managed by Grayscale. Therefore, attributing core business lines directly to Tidal can be misleading. Nonetheless, we can examine Grayscale investments, which indirectly impact Tidal:

• Bitcoin Investment Trust (GBTC): One of the largest public vehicles for gaining exposure to bitcoin. It holds a significant amount of bitcoin and aims to track the price of the underlying asset.
• Ethereum Investment Trust (ETHE): A trust that offers investment in Ether, the native cryptocurrency of the Ethereum blockchain. Similar to GBTC, it tracks the underlying asset's price.

Looking at management, it becomes clearer who oversees Tidal Trust II's indirect investments. Grayscale Investments serves as the sponsor, sponsor trustee, investment advisor, distributor, exchange agent, principal administrator, calculation agent, dividend agent, registrar, transfer agent, and information agent for various funds and trusts, including those related to Tidal. This structure suggests Grayscale directly controls investment decisions for Bitcoin and Ether funds relevant to Tidal.

C. Corporate Structure

Tidal operates through two key entities: Tidal Trust II and its subsidiary, Tidal ETF Trust. While both are technically separate legal entities, their connection influences how investments are overseen:

• Tidal Trust II: This REIT serves as the master trust within the structure, primarily holding investment proceeds from liquidated ETPs. It doesn't have direct involvement in managing assets or investments.
• Tidal ETF Trust: The primary vehicle for investment activity. Grayscale manages BTC and ETH funds within Tidal ETF Trust, impacting Tidal Trust II indirectly.

It's crucial to understand that information about ownership, holdings, and financial performance for specific Bitcoin and Ether ETPs should be gathered directly from sources related to GBTC and ETHE, as those reflect the underlying investments impacting Tidal.

Top Products and Market Share

While Tidal has no direct products, we can examine the impact of Grayscale-linked Bitcoin and Ether funds due to their connection to the overall structure:

• GBTC: As of November 2023, it has significant institutional ownership and investment from a variety of companies. It has historically traded at a premium to bitcoin's actual market value, although this premium has reduced. As the largest publicly traded vehicle in its space, its market share within this investment category could be considered dominant. However, it faces competition from newer similar products.
• ETHE: ETHE holds a lesser market share compared to GBTC, although it still represents an important vehicle for accessing Ethereum exposure. Similar to GBTC, it grapples with competitive pressure from more recently launched products.

It's essential to stay up-to-date with the changing dynamics of investment vehicles within their respective cryptocurrency spaces and how they compare in terms of features, fees, and trading volume. While Tidal doesn't directly control this aspect, understanding the performance of linked funds like GBTC and ETHE is crucial for assessing its overall positioning indirectly.

Total Addressable Market

The total addressable market (TAM) is challenging to define precisely for Tidal due to its indirect involvement in cryptocurrency asset management. However, considering the potential size of both the Bitcoin and Ether markets, which is estimated to be in the trillions of dollars as of November 2023, we can glimpse the broader scope of its potential reach. Nonetheless, this TAM is heavily influenced by cryptocurrency price fluctuations and the growing presence of competitors, making it a dynamic target market.

Financial Performance