Digital Asset Trading Platforms, the Index Price, and the price of SUI generally, remain subject to volatility experienced by Digital Asset Trading Platforms, and such volatility could adversely affect the value of the Shares. For example, since the commencement of the Trust’s operations, the Index Price ranged from $0.53 to $5.23, with the straight average being $2.79 through December 31, 2025. In addition, during the twelve months ended December 31, 2025, the Index Price ranged from $1.33 to $5.23. The Sponsor has not observed a material difference between the Index Price and average prices from the constituent Digital Asset Trading Platforms individually or as a group. The price of SUI more generally has experienced volatility similar to the Index Price during these periods. See “Business—Overview of the Sui Industry and Market—Historical NAV and SUI Prices.” Furthermore, because the number of Digital Asset Trading Platforms is limited, the Index will necessarily be comprised of a limited number of Digital Asset Trading Platforms. If a Digital Asset Trading Platform were subjected to regulatory, volatility or other pricing issues, the Index Provider would have limited ability to remove such Digital Asset Trading Platform from the Index, which could skew the price of SUI as represented by the Index. Trading on a limited number of Digital Asset Trading Platforms may result in less favorable prices and decreased liquidity of SUI and, therefore, could have an adverse effect on the value of the Shares. Purchasing activity associated with acquiring SUI required for the creation of Baskets may increase the market price of SUI on the Digital Asset Markets, which will result in higher prices for the Shares. Alternatively, selling activity associated with sales of SUI withdrawn from the Trust in connection with the redemption of Baskets may decrease the market price of SUI on the Digital Asset Markets, which will result in lower prices for the Shares. Increases or decreases in the market price of SUI may also occur as a result of the purchasing or selling activity of other market participants. Other market participants may attempt to benefit from an increase or decrease in the market price of SUI that may result from increased purchasing or selling activity of SUI connected with the creation or redemption of Baskets. Consequently, the market price of SUI may decline immediately after Baskets are created. Decreases in the market price of SUI may also occur as a result of sales in Secondary Markets by other market participants. If the Index Price declines, the value of the Shares will generally also decline. Competition from the emergence or growth of other digital assets could have a negative impact on the price of SUI and adversely affect the value of the Shares. As of December 31, 2025, SUI was the twenty-third largest digital asset by market capitalization, as tracked by CoinMarketCap.com. As of December 31, 2025, the digital assets tracked by CoinMarketCap.com had a total market capitalization of approximately $2.7 trillion (including the approximately $5.2 billion market cap of SUI), as calculated using market prices and total available supply of each digital asset, excluding stablecoins and tokens pegged to other assets. SUI faces competition from a wide range of digital assets, including Bitcoin and Ether. Many consortiums and financial institutions are also researching and investing resources into private or permissioned blockchain platforms rather than open platforms like the Sui Network. In addition, SUI is supported by fewer trading platforms than more established digital assets, such as Bitcoin and Ether, which could impact its liquidity. In addition, the Sui Network is in direct competition with other smart contract platforms, such as the Ethereum, Polkadot, Avalanche and Cardano networks. Competition from the emergence or growth of alternative digital assets or other smart contract platforms could have a negative impact on the demand for, and price of, SUI, and thereby adversely affect the value of the Shares. Investors may also invest in SUI through means other than the Shares, including through direct investments in SUI and other financial vehicles, including securities backed by or linked to SUI and digital asset financial vehicles similar to the Trust. In particular, the Trust and the Sponsor face competition with respect to the creation of competing exchange-traded spot SUI products, among other digital asset vehicles, several of which have applications pending before the SEC or that have already received SEC approval. The SEC and CFTC have also issued a joint staff statement providing the respective staffs’ view, that current law does not prohibit SEC-or CFTC-registered exchanges from facilitating trading of certain spot crypto asset products, which may expose the Trust to additional types of competition. Whether the Trust is successful in maintaining its scale and achieving its intended competitive position may be impacted by a range of factors, including the Trust’s timing in entering the market relative to competing spot SUI exchange-traded products, its fee structure relative to those competing products and potentially new platforms for investing in SUI. The Trust’s competitors may offer a more liquid secondary market for their shares, and/or may charge a substantially lower fee than the Sponsor’s Fee or expense ratio now or in the future. If the Trust fails to continue to maintain or grow sufficient scale due to competition, the Sponsor may have difficulty raising sufficient revenue to cover the costs associated with maintaining the Trust and such shortfalls could impact the Sponsor’s ability to properly invest in robust ongoing operations and controls of the Trust to minimize the risk of operating events, errors, or other forms of losses to the shareholders. Furthermore, the Trust may fail to continue to attract adequate liquidity in the secondary market due to such competition, resulting in a small number of Authorized Participants willing to make a market in the Shares, which in turn could result in the Shares trading at a significant premium or discount for extended periods. Likewise, market and financial conditions, and other conditions beyond the Sponsor’s control, may make it more attractive to gain exposure to SUI through other vehicles, rather than the Trust. In addition, to the extent digital asset financial vehicles other than the Trust tracking the price of SUI are formed and represent a significant proportion of the demand for SUI, large purchases or redemptions of the securities of these digital asset financial vehicles, or private funds holding SUI, could negatively affect the Index Price, the NAV, the NAV per Share, the value of the Shares, the
36
Made with FlippingBook - professional solution for displaying marketing and sales documents online