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We are convinced that bitcoin and other cryptocurrencies are a sensible investment. Here is why:

Socioeconomic Perspectives

A discerning observer of global events will readily recognize an increasing demand for an open and more transparent monetary infrastructure. In fact, several factors show that such a shift is already underway in modern society.

National currencies are no longer ‘sound money’
Over the past few years, events in countries where inflation is spinning out of control have revealed more clearly than ever just how volatile the value of money issued by centralized, governmental authorities can be. For example, as reported by The Economist in early 2018, the bolívar – Venezuela’s national currency – lost 99.9% of its value in just two years. The Turkish lira has experienced similar problems in the past and much indicates it may face another currency crisis in the future.

Such examples may seem extreme. Still, the fact of the matter is that the use of fractional-reserve banking is so widespread that, even though few national currencies may face the same fate as the bolívar, constant inflation is the rule rather than the exception in the economies based on fiat currencies.

A world where banking is for everybody
When new customers sign up for banking services, they are thoroughly screened to ensure they comply with the bank’s requirements. If a customer does not meet these standards, they may not be eligible to obtain a certain financial service. At times, a customer may be turned away even if he or she has a good credit score simply because he or she may not be considered “good business”.

The consequences of such a system are often dramatic. With no access to banking services they need, a person may have trouble finding a job, have limited housing opportunities, and be precluded from fully participating in the society.

With bitcoin and cryptocurrencies, there are no limitations as to who can participate as the entry barriers are extremely low. In fact, a prospective crypto user will only need to download and install a simple application on his or her device. That’s all it takes to be able to use cryptocurrencies.

A borderless payment method and assets that can’t be confiscated
Anyone who has ever tried to wire money across continents using standard banking means knows how cumbersome that process is. Additional fees may at times apply; it can take several days to process the transaction and there may be an additional clearance time on both ends.

The reason for these hurdles is that payments must go through one or more intermediaries before they reach their destination. However, with bitcoin or other cryptocurrencies, you can carry out transactions with no intermediaries whatsoever. More importantly, your funds are never at risk of being frozen, charged with additional fees, or seized. Such negative ‘user-experiences’ simply do not exist in the crypto world. This advantage cannot be overstated as cryptocurrencies are the first medium in the world that offers this particular value proposition.

The Design of Bitcoin and Cryptocurrencies

The key to bitcoin’s success lies in its technological design. Two noteworthy features that make this payment method unique are that the bitcoin network works autonomously while also following rigid mathematical rules.

No One Party Can Govern the Network

With the help of a sophisticated algorithm, the bitcoin network autonomously rewards participating computers for being part of the network. In other words, there is a built-in incentive for participating. Once you are part of the network, the amount of computational power you provide will at the same time give you influence over the decision-making process within the network. This results in a unique governance structure where:

  • everybody is able to participate, and
  • participation grants influence.

This is often referred to as ‘decentralized’ governance, meaning that there is no central entity that controls or holds power over other participants or the network as a whole.

Predictable Distribution and Maximum Supply

Secondly, the supply of bitcoins that are being released into the network follows a mathematical pattern, which allows to predict both the maximum supply (the total number of bitcoins that will eventually exist) as well as the current distribution (the number of bitcoins that are currently in circulation). Such predictability and the finite number of available bitcoins mean that in the long-term, the price of bitcoin can be expected to rise as a result of increased demand.

This is a significant improvement in comparison to how the fiat currency system works. Today, central authorities are able to increase the total supply of money available in an economy. It can happen at any given moment and in a politically motivated manner. This, in turn, can lead to unpredictable fluctuations of any national currency’s value over time.

Bitcoins Are Programmable

Bitcoin, in its essence, is a piece of software. As a natural consequence, this creates possibilities for the development of applications that can interact with it. Other payment gateways have also offered such possibilities in the past but what sets bitcoin apart is no reliance on any third party.

This introduces a new paradigm for how we – now and in the future – perceive money and monetary transactions; a paradigm that allows for open and trustless communication directly with the “money” rather than with the trusted third parties we use today.

Early Stages of Adoption

Since its inception, bitcoin has experienced multiple waves of adoption where large numbers of new people started using the cryptocurrency. Interestingly enough, the adoption of bitcoin has been spearheaded mainly by retail investors and not institutions – as it is usually the case with other investment schemes.

 

The Waves of Adoption

The idea that led to the creation of Bitcoin was originally conceived in a community of technologists and cryptographers. It is no surprise, then, that the first wave of people who adopted the currency were tech-savvy individuals with an interest in cryptography.

The next wave of adopters came in 2011 when bitcoin became tradeable on liquid crypto exchanges. Listed on a tradeable exchange, bitcoin was now much more accessible and could be bought without direct contact with a seller. This opened up the speculative potential of bitcoin because price discovery would now happen in real-time.

Fast forward to 2013, the price of bitcoin had climbed from $10 to about $1200. It was an astonishing price increase that sparked worldwide news coverage and attracted many more individual investors.

The third wave came in 2017 when prices started to increase rapidly again. The immense number of new people joining the ecosystem in 2017 caused cryptocurrency prices to explode across the board and the entire market capitalization combined went from 17 billion to 795 billion.

In hindsight, it is obvious that these numbers were unsustainable. The adoption of bitcoin and other cryptocurrencies seems to be driven by their boom and bust price cycles. Every time a new bull market starts unfolding and prices begin to rise, there is a large number of new investors who join the markets. Research on the subject has shown that most investors in the cryptocurrency markets are retail investors.

This fact deserves careful consideration. In the established markets (e.g., stock markets), institutional investors are estimated to make up more than 90 percent of the overall trading volume, and yet, here is a market that seems to be dominated by retail investors. In other words, a limited number of institutions have been willing or able to get on board so far.

The reason is obviously not that institutions don’t want to participate in the crypto market. After all, who wouldn’t be interested in joining a market economy that can go up 4,500 percent in one year?

Rather, institutional players have not been able to participate in the cryptocurrency market because, up until now, these markets have not been regulated to a degree that could make it possible for them to participate. In other words, they were left to watch the plane take off in 2017 before they could secure a seat.

This particular point is extraordinarily interesting because it leaves open the possibility that institutional players will seek to enter these markets once they have the opportunity to do so. Given the amount of work that is currently being put into developing regulatory frameworks for this new economy, we project that the time when institutions have not been able to participate in crypto markets is coming to an end.

An important benchmark to follow is the size of the bitcoin economy. As an economy, bitcoin used to be too small for sustained measurement. However, as of the second half of 2018, Bitcoin now represents about one percent of the size of the gold market. Needless to say, bitcoin is by no means insignificant anymore but there is still plenty of room for growth.

A Must-Have in Every Diversified Investment Portfolio

It takes no more than a single glance at the BITCOIN to USD conversion chart to realize that, despite severe drawdowns along the way, bitcoin has probably been one of the best-performing financial instruments in the last 10 years. Of course, as we have covered briefly in the previous section, bitcoin’s performance metrics must be taken with a grain of salt – after all, the cryptocurrency was trading at close to no value at all in the very early days. However, even with the price action in more recent years taken into account, it is still clear that bitcoin really is an ‘animal’ of its own. For example, at the end of 2017, the value of bitcoin was 2000 percent higher than in the beginning of that year. This is quite a remarkable performance that seems to have caused a great deal of confusion among renowned investors and economists worldwide. This is not only because they struggle with the characteristics of bitcoin as an asset class, but also because very few of them have been able to understand the performance of this beast called bitcoin. While we definitely acknowledge that its performance 12 has been nothing short of astonishing, we also agree with an argument repeated ad nauseam by bitcoin critics: that it is too volatile for the average investor to handle. The above chart illustrates this exact point: how well Bitcoin has performed in the long run, and how severe the drawdowns it has produced along the way really were. A look towards the upper part of the chart reveals the trajectory bitcoin’s price has been drawing since 2011. The highlighted parts of the chart display periods of extreme downward movement, showing drawdowns close to 90 percent three times since 2011. The volatility argument is, however, easy to counter. In a report published by Deloitte (2017), it was estimated that by the year 2025, the daily volatility of bitcoin would have smoothed out to match that of the U.S. Dollar. That said, 2025 is far away – especially in terms of the development of cryptocurrency markets – and for that reason, it is still strongly recommended that investors use caution when trading in these markets. Unless you know what you are doing, high volatility and asset security are critical issues that can potentially obliterate the profits made on investments in these instruments. These two issues are, therefore, among the core value propositions of ARK36, which specializes in the management of investment portfolios containing cryptocurrency.

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  1. The investor has carried out transactions, of significant size, on average more than ten times per quarter over the last four quarters.
  2. The size of investor’s financial portfolio, including cash deposits, exceeds €500.000,00.
  3. The investor has at least one year of professional experience in financial markets.

1 RISK FACTORS

Prospective investors in the Company are expected to be aware of the substantial risks of investing. Even if qualified to invest on the basis of financial suitability, those who are not generally familiar with such risks may not be suitable investors in the Company. Investment in the Participating Shares should be made only after consulting with independent, qualified sources of investment and tax advice. The risk factors described below are not a complete list of all factors or circumstances that may adversely affect an investment in Participating Shares, and are not intended to be presented in any assumed order of priority. They simply represent those which the Board of Directors of the Company believes are the primary risks. In particular, the Company’s performance may be affected by changes in legal, regulatory and tax requirements in any of the jurisdictions in which it or its subsidiary companies operate or intend to operate as well as overall global financial conditions. Particular investors may have other circumstances and variables which they may consider to be more significant to their investment decision.

Potential Participating Shareholders should also take their own tax advice as to the consequences of their owning shares in the Company as well as receiving returns from it. Tax commentary in this document is provided for information only and no representation or warranty, express or implied, is given to Participating Shareholders in any jurisdiction as to the tax consequences of their acquiring, owning or disposing of any Participating Shares in the Company and neither the Company, nor the Directors will be responsible for any tax consequences for any such Participating Shareholders.

As a general rule, an investment in the Participating Shares of the Company should only be considered by well-informed and professional investors who are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses which may arise there from (which may be equal event to the total amount invested). Such an investment should only be seen as complementary to other investments in a wide spread of other financial assets and should not form part of an investment portfolio.

1.1 Investment risk

Potential investors should note that the investments of the Company are subject to market fluctuations and other risks inherent in investing in investments of the kind and nature in which the Company invests and there can be no assurance that any appreciation in value will occur. In particular, the value of investments may be affected by uncertainties such as international, political and economic developments or changes in government policies.

The value of investments and the income therefrom, and therefore the value of Participating Shares in the Company can go down as well as up and an investor may not recoup the original amount invested in the Company. An investment should only be made by those persons who are able to sustain a loss on their investment.

Changes in exchange rates between currencies may also cause the value of the investments to diminish or increase. Currency fluctuations may adversely affect the value of an investment.

The value of the assets attributable to the Company may be affected by uncertainties such as national, regional or international political developments, changes in government policies, changes in taxation, restrictions on foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of countries in which investment may be made. Furthermore, the legal infrastructure and accounting, auditing and reporting standards in certain countries in which investment may be made may not provide the same degree of investor protection or information to investors as would generally apply in major securities markets. None of these uncertainties will be within the control of the Directors of the Company.

As the Company will invest in Cryptocurrencies, the Company will be exposed to risk factors that may affect the market including:

Risk inherent to the business

  • Return and performance risk
  • Technology Risk
  • Volatility Risk
  • Risk of Price Manipulation
  • Market Risk
  • Liquidity Risk
  • Concentration Risk
  • Currency Risk
  • Inflation Risk
  • Systemic Risk
  • Competition Risk

Counterparty risks

  • Related to Online Exchange
  • Related to Key Holders

Operational Risks

  • Risk of losing assets
  • Operational Risk
  • No Management Rights
  • No Guarantee of Redemption of Units
  • Risk of Mandatory Redemption of Units
  • Key Person Dependency Risk
  • Conflict of Interest

1.2 No Guarantee

There can be no assurance or guarantee that the Company will achieve its investment objective.

1.3 Lack of Transparency

Other than the provision of semi-annual (unaudited) and annual audited reports and statements and the monthly NAV, the Company may not provide any information regarding the investment strategy of the Fund.

1.4 Risk of Terrorist Action

There is a risk of terrorist attacks causing significant loss of life and property damage and disruptions in the global market. Economic and diplomatic sanctions may be in place or imposed on certain states and military action may be commenced. The impact of such events is unclear, but could have a material effect on general economic conditions and market liquidity.

1.5 Restrictions on Transfer

Potential investors should be fully aware of the restrictions on transfer of their shares in the Company.

Under the Articles of Association of the Company, unless otherwise determined by the Company in a general meeting, Participating Shares are non-transferable except and subject to the approval of the Directors, if the Directors reasonably believe that any shares are owned, whether beneficially or otherwise, in circumstances which:

a) Constitute a breach of the law or governmental regulation (or any interpretation of the law or regulation by a competent authority) of any country or territory, or

b) Would (or would if other Participating Shares were acquired or held in like circumstances) result in the Company incurring any liability to taxation or suffering any other adverse consequence (including the requirement to register under any securities or investment or similar laws or governmental regulation of any country or territory).

It is also noted that the Participating Shares are unlikely to be registered under the securities laws of any jurisdiction and there will be no ready market for them.

Subject to the provisions of the AIF Law and for the purposes of compliance with the above restriction, the Administrator shall maintain a register of Shareholders with appropriate numbering of the Shareholders from which the number of the Shareholders in the Company, from time to time, shall arise and which the Company shall consult before the allotment and issue of any new Shares or before the approval of any transfer of Shares.

The Directors of the Company shall be obliged not to give the approval to the Administrator to proceed with any new allotment and issue of Shares if as a result of such allotment and issue the number of holders of Shares would exceed the number of fifty (50) persons.

The Board of Directors are obliged to refuse the registration of a transfer of Shares if as a result of the said transfer the number of holders of Shares would exceed the number of fifty (50) persons.

1.6 Limited Redemption Rights

An investment in the Company is suitable only for professional investors who have no need for immediate liquidity in their investments. Participating Shares may not be redeemed within six (6) months of their initial subscription under any circumstances and within three (3) years unless a fee is paid. After this period Participating Shares may be redeemed within three (3) months of the last day of the month in which the redemption request was made.

The Articles of Association of the Company provide that a holder of Participating Shares may redeem all or part of his holding of Participating Shares but the Directors reserve the right to refuse a partial redemption if immediately thereafter the value of such holder’s Participating Shares would be less than the Minimum Holding, or as otherwise determined by the Directors.

The Articles of Association of the Company provide that the Directors reserve the right to limit the aggregate amount of redemptions on any Redemption Date to no more than 5% of the Net Asset Value of the Company and redemption requests may be scaled down accordingly. Redemption requests which are scaled down will be dealt with on the next Redemption Date in priority to subsequent redemption requests but subject to the same limitations. The Directors may waive or modify in part or whole the gate percentage in exceptional circumstances.

In addition, redemption may not be possible in case of suspension of the determination of the Net Asset Value.

1.7 Lack of Ordinary Income

Any interest and dividend income earned by the Company on its investments will be incidental to the accomplishment of its primary investment objectives. The Company does not intend to make income or capital gains distributions to its Participating Shareholders. Therefore, an investment in the Company is not suitable for investors seeking current returns for financial or tax planning purposes, and should be considered only by persons who are financially able to maintain their investment in the Company over an extended period.

1.8 General Economic Conditions

The success of any investment activity is influenced by general economic conditions, which may affect the level and volatility of factors including interest rates and the extent and timing of investor participation in the markets for both equity and interest-rate-sensitive securities. Unexpected volatility or illiquidity in the markets in which the Fund hold positions could impair the Fund’s Net Asset Value and cause losses.

1.9 Political and/or Regulatory Risks

The value of the Company’s assets may be affected by uncertainties such as international political developments, changes in government policies, changes in taxation, restrictions on foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of countries in which investment may be made. Furthermore, the legal infrastructure and accounting, auditing and reporting standards in certain countries in which investment may be made may not provide the same degree of investor protection or information to investors as would generally apply in major securities markets. The political risks are related to the possible rise of internal political disturbances and unfavourable changes in the economic legislation. This risk relates to the possibility that the government of a certain country may adversely change its policy and business environment.

1.10 Foreign Exchange / Currency Risk

The Company’s investments are denominated primarily in Euros and USD . Certain of the assets of the Company may be denominated in currencies other than in the currency in which the Participating Shares are subscribed for. Accordingly, the value of such assets may be affected favourably or unfavourably by fluctuations in currency rates. In addition, prospective investors whose assets and liabilities are predominately in other currencies should take into account the potential risk of loss arising from fluctuations in value between the Euro and such other currencies.

1.11 Concentration of Investments

Subject to the investment restrictions outlined in the present Private Offering Memorandum, the Company may at certain times hold relatively few investments. The Company could be subject to significant losses if it holds a large position in a particular investment that declines in value or is otherwise adversely affected.

1.12 Unethical or Illegal Behaviour

The Company might suffer damages as a result of unethical behaviour of persons with which it has contractual relations, including persons from the Company’s Board of Directors. In order to control this risk the Board of Directors has developed internal rules for ethical behaviour, meeting the requirements of the Code of Ethics and Standards of Practice adopted by the CySEC code of conduct. The risk of unethical or illegal behaviour by any contractor to the Fund is minimised by the careful preliminary analysis of these potential partners and their reputation.

1.13 Departure of Directors

The Company may be affected due to the departure of a Director of key importance and with specific qualification, a replacement for whom may be difficult or impossible to find within a reasonable period of time and at a reasonable cost.

1.14 Taxation

Potential investors’ attention is drawn to the taxation risks associated with investing in the Company. Further details are given in the relevant Section above. The tax rules and their interpretation relating to an investment in the Company may change during the life of the Company. Any change in the Company’s tax status or in taxation legislation or its interpretation, could affect the value of the investments held by the Company, affect the Company’s ability to provide returns to Participating Shareholders or alter the post-tax returns to Participating Shareholders. Representations in this document concerning the taxation of the Company and its investors are based upon current tax law and practice which is, in principle, subject to change.

The avoidance of double taxation and in particular the Company profit tax exemption is important for the financial results of the Company. It is not certain whether and for how long the Company and its Participating Shareholders will profit from a favourable tax environment. In addition, the activity of the Fund is subject to a detailed and multi-aspect legal regulation. There is no guarantee that the legislation related to the activity of the Company might not be changed in an unfavourable direction, involving considerable unforeseen expenses which would negatively affect its profit.

1.15 Cryptocurrencies

Some of the Exchanges on which the Company may invest may prove to be illiquid, insufficiently liquid or highly volatile from time to time. This may affect the price at which the Company may liquidate positions to meet redemption requests or other funding requirements

Prices of Cryptocurrencies fluctuate daily and can be influenced by many factors, such as political and economic news, corporate earnings reports, demographic trends and catastrophic events. Further, some markets may be less liquid and experience greater volatility than other markets.

Cryptocurrencies

Cryptocurrency exchanges have in the past been closed due to fraud, failure or security breaches. In many of these instances, the customers of such cryptocurrency exchanges were not compensated or made whole for the partial or complete losses of their account balances. Any of the Fund’s assets that reside on a cryptocurrency exchange that shuts down may be lost. The methodologies for determining a cryptocurrency’s market price are new and untested. Such methodologies may now or in the future contain inherent flaws that may adversely affect the ability to determine a cryptocurrency’s market price. Cryptocurrencies are created, issued, transmitted and stored according to protocols run by computers in a cryptocurrency network. It is possible these protocols have hidden flaws that could result in the loss of some or all assets held by the Fund. There may also be network scale attacks against these protocols or server hosts that result in the loss of some or all of assets held by the Fund. Some assets held by the Fund may be created, issued or transmitted using experimental cryptography which could have underlying flaws. Advancements in quantum computing could break the cryptographic rules of protocols that support the assets held by the Fund. The Fund makes no guarantees about the reliability of the cryptography used to create, issue or transmit assets held by the Fund. The impact of geopolitical events on the supply and demand for cryptocurrencies is uncertain. The further development and acceptance of the cryptographic, algorithmic, and other applicable protocols governing the issuance of and transactions in cryptocurrencies, which represents a new and rapidly changing industry, is subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of these protocols may adversely affect any investment in a cryptocurrency. Currently, there is relatively small use of cryptocurrencies in the retail and commercial marketplace in comparison to relatively large use by speculators (including, but not limited to, high frequency traders using automated trading systems seeking to take advantage of arbitrage opportunities in cryptocurrencies and the various cryptocurrency exchanges), thus contributing to price volatility.

1.16 Fluctuations in the Market Price of Cryptocurrencies

The value of the Units relates directly to the value of the cryptocurrencies held directly or indirectly by the Fund, and fluctuations in the price of cryptocurrencies could materially and adversely affect an investment in the Units. Several factors may affect the price of cryptocurrencies, including: the total number of cryptocurrencies in existence; global demand; global supply; investors’ expectations with respect to the rate of inflation of fiat currencies; investors’ expectations with respect to the rate of deflation of cryptocurrencies; interest rates; currency exchange rates, including the rates at which cryptocurrencies may be exchanged for fiat currencies; fiat currency withdrawal and deposit policies of cryptocurrency exchanges and liquidity of such cryptocurrency exchanges; interruptions in service from or failures of major cryptocurrency exchanges; cyber theft of cryptocurrencies from online digital wallet providers, or news of such theft from such providers or from individuals’ digital wallets; investment and trading activities of large investors; monetary policies of governments, trade restrictions, currency devaluations and revaluations; regulatory measures, if any, that restrict the use of cryptocurrencies as form of payment or the purchase of cryptocurrencies on the market; the availability and popularity of business that provide cryptocurrency-related services; the maintenance and development of the opensource software protocol of the cryptocurrency network; increased competition from other forms of cryptocurrency or payments services; global or regional political, economic or financial events and situations; expectations among cryptocurrency economy participants that the value of cryptocurrencies will soon change; and fees associated with processing a cryptocurrency transaction. In addition, investors should be aware that there is no assurance that cryptocurrencies will maintain their long-term value in terms of future purchasing power or that the acceptance of cryptocurrency payments by mainstream retail merchants and commercial businesses will continue to grow. In the event that the price of cryptocurrencies declines, the Manager expects the value of an investment in the Units to decline proportionately. Cryptocurrencies represent a speculative investment and involve a high degree of risk. As relatively new products and technologies, cryptocurrencies have not been widely adopted as a means of payment for goods and services by major retail and commercial outlets. Conversely, a significant portion of the demand for cryptocurrencies is generated by speculators and investors seeking to profit from the short or longterm holding of cryptocurrencies. The relative lack of acceptance of cryptocurrencies in the retail and commercial marketplace limits the ability of end-users to pay for goods and services with cryptocurrencies. A lack of expansion by cryptocurrencies into retail and commercial markets, or a contraction of such use, may result in increased volatility.

1.17 Regulatory Framework Relating to Cryptocurrencies

It may be illegal, now or in the future, to own, hold, sell or use cryptocurrencies in one or more countries, including the United States and Canada. Although currently cryptocurrencies are generally either not regulated or lightly regulated in most countries, one or more countries may take regulatory actions in the future that severely restricts the right to acquire, own, hold, sell or use cryptocurrencies or to exchange cryptocurrencies for fiat currency. Such an action may restrict the Fund’s ability to hold or trade cryptocurrencies and could result in termination and liquidation of the Fund at a time that is disadvantageous to unitholders, or may adversely affect an investment in the Fund. The tax rules applicable to an investment in cryptocurrency may be uncertain and the tax consequences to the Fund of an investment in a cryptocurrency could differ from the Fund’s expectations (if any).

1.18 Risk of Loss of Private Key

Cryptocurrencies are controllable only by the possessor of unique private keys relating to the addresses in which the cryptocurrencies are held. The theft, loss or destructions of a private key required to access a cryptocurrency is irreversible, and such private keys would not capable of being restored by the Fund. Any loss of private keys relating to digital wallets used to store the Fund’s cryptocurrencies could result in the loss of the cryptocurrencies controlled by such private key.

1.19 Risk of Loss, Theft or Destruction of the Fund’s Cryptocurrencies

There is a risk that some or all of the Fund’s cryptocurrencies could be lost, stolen or destroyed. If the Fund’s cryptocurrencies are lost, stolen or destroyed under circumstances rendering a party liable to the Fund, the responsible party may not have the financial resources sufficient to satisfy the Fund’s claim. Also, although the cryptocurrency Custodians uses security procedures with various elements, such as redundancy, segregation and cold storage, to minimize the risk of loss, damage and theft, neither the cryptocurrency Custodians nor the Manager can guarantee the prevention of such loss, damage or theft, whether caused intentionally, accidentally or by an act of God. Access to the Fund’s cryptocurrencies could also be restricted by natural events (such as an earthquake or flood) or human actions (such as a terrorist attack).

The foregoing list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Company. Prospective investors should read this entire Private Offering Memorandum and consult with their own legal, tax and financial advisers before deciding to invest in the Company. Still, if you do not understand the risk involved do not invest in the Company!