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10 Reasons to Believe Bitcoin Is the Best Investment of a Decade

Is Bitcoin a good investment? 

You might have asked yourself this question more than once over the past weeks, months, or even years. However, the issue has never been as timely as it is at the moment.

Many investors are already putting their capital in Bitcoin and successfully turning a profit. In 2020, the cryptocurrency has gained more traction than ever before. Furthermore, its status as an investment vehicle has been solidified thanks to an unprecedented interest from large institutional investors. If there has ever been a time to consider a Bitcoin investment, that time seems to be right now.

However, is the cryptocurrency worth all the hype? Or does the risk related to the digital asset’s volatility outweighs the potential rewards?

Of course, that is the question every investor must answer for him- or herself. Still, as a company focused exclusively on crypto investments, we think there are sound reasons to believe Bitcoin and other selected cryptocurrencies are the investment opportunity of a decade.

Our team at ARK36 managed to boil down these reasons to 10 concise and clear arguments. Read on to learn why investors are increasingly recognizing Bitcoin’s true potential and how you can capitalize on this opportunity.

1. Best Historical Returns Over Medium and Long Term

Consider this: if you had invested as little as $30 in bitcoin in 2010 (at the time you could buy as many as 10,000 bitcoins for that amount), currently, you would be sitting at more than $190 million worth of bitcoin. 

If you think that’s an unfair example (after all, you likely haven’t known about cryptocurrencies back then) – let’s take a look at another one. In October 2015, you could buy 2 bitcoins for the amount of about $1,000. Those two bitcoins would now be worth almost $40,000. And even if you had invested at the beginning of 2020, you would still be sitting on a 300% gain.

Of course, anyone dealing with financial markets professionally knows that past performance is not necessarily indicative of future returns. In other words, the fact that an investment has generated profit in the past does not guarantee that it will continue to do so. 

Nevertheless, all asset classes carry some kind of risk – even if they seem safe or successful over long periods. What’s undeniable is that Bitcoin has already demonstrated its ability to produce wonderful results over the medium and long term. That opportunity is there for you to seize it.

2. Low Correlation with Other Established Markets

“Diversify your portfolio” is the mantra of all professional investors – and for a good reason. If you spread your investment over different assets, your wealth won’t suffer too big of a blow if a sudden downturn strikes the sectors of the economy you have invested in. 

In a diversified portfolio, you could still turn a profit on asset classes unrelated to the affected industries. Therefore, it’s reasonable to include in your portfolio a few assets uncorrelated to your dominant investments.

Crypto assets provide an important strategic advantage in that regard. Their correlation with the established markets has historically been weak. This means that crypto-assets may remain unaffected by a negative trend – or even a sharp fall – in the stock market.

That’s why owning crypto assets in an investment portfolio may prove to be an effective diversification strategy. However, as an asset class, cryptocurrencies have even more advantages. We will consider them in the following point.

3. Bitcoin as a Supply-Scarce, Hard Value, Anti-Inflationary Asset

In everyday life, we rarely think about what money is and why it has value. Overall, we simply recognize and accept that state-issued currencies like the euro, the dollar, or the yen are worth something to us and other people and that they can be given in exchange for goods.

State-issued – or fiat – currencies are indeed useful as a medium of exchange. However, as a store of value, they have certain limitations. In the long run, cash tends to lose its value due to inflation. Inflation is the tendency of a currency to lose its value over time. This can happen because of a variety of reasons, for example, when governments printed and put into circulation more money.

Here is where Bitcoin differs from traditional money. While governments can increase the supply of fiat currencies, the number of bitcoins in circulation cannot be arbitrarily increased. Rather, the whole network of participants must come to an agreement in order to make such decisions. This prevents Bitcoin from losing its value over time due to the influx of new bitcoins into circulation.

Also unlike traditional money, the supply of Bitcoin – the total amount of bitcoin that can ever be produced – is finite. Bitcoin’s underlying software structure has a hard-coded limit on the supply set at 21 million. Once this threshold has been reached, no more bitcoin will ever come into existence. This particular feature of Bitcoin makes it similar to commodities. It is also one of the reasons why it is more and more frequently referred to as the “digital gold”.

4. Bitcoin Still Has a Considerable Upside Potential

In the context of investing in financial markets, a popular opinion holds that the so-called smart money invested first. These are the experienced, well-informed, and well-connected – for example, large institutional investors. The general public, who arrived late to the game when the markets had already matured, is believed to lack that initial advantage and so cannot hope to be as successful.

For Bitcoin, however, the exact opposite is true. Bitcoin and other crypto-assets were launched directly and exclusively on the Internet. In the beginning, the cryptocurrency investment space was dominated by people interested in cryptography and other technology nerds. Those early adopters were quick to see the potential of this innovation. But as cryptocurrencies evolved, more people quickly followed suit. 

These retail investors were mostly amateurs and regular Internet users – as large and professional investors historically treated crypto assets with a lot of scepticism. And so, when the crypto boom started in 2017, the regular people and not professional investors made the most money.

Now, at long last, professional investors have likewise recognized the undeniable potential of crypto. They have proved that by making considerable investments in the space. As a result, the markets have matured and Bitcoin gained even more recognition as an investment vehicle.

However, now is still the time for individual investors to participate in the market. While the price of Bitcoin has been rising significantly, there is still a potential for a much sharper positive trend – and with it, an opportunity for a considerable profit.

5. Bitcoin is Both a Risk-On and Risk-Off Investment

For some time now, many commentators have speculated that Bitcoin may be emerging as a new safe-haven asset. Now, there is growing evidence to support this narrative. As a consequence, the recognition of Bitcoin as a potential safe haven is becoming more widespread.

Safe haven investments are asset types that are able to retain their value through times of global distress, uncertainty, and great market turbulence. Investors seek them out to limit their exposure to losses in the case of a general economic downturn.

Bitcoin may provide such an advantage due to two of its fundamental features that we have already discussed above. These features are supply scarcity as well as low (or perhaps even negative) correlation to the general markets.

Bitcoin is also a piece of technology – and innovative technology at that. This is a part of the cryptocurrency’s appeal. It means that it has the potential to become used in new, innovative ways, resulting in greater adoption of Bitcoin in other areas of life. Bitcoin even has the potential to change how we perceive, transact, and store value.

However, investors should also remember that the Bitcoin network is only 10 years old and so, there are still a lot of unknowns in the space. Due to that, Bitcoin should also be perceived as a “risk-on” asset.   

6. Bitcoin Isn’t the Only Cryptocurrency Available

Bitcoin is the cryptocurrency that became widely available and used – but it hasn’t been the last. Its development has sparked a true revolution and enabled virtually any entity – private or institutional – to issue a blockchain-based crypto asset or token. 

To do so, such an entity won’t have to apply for approval from a centralized authority. Neither does it have to go through costly and complicated procedures, as it is the case, for example, with getting listed on the stock market. Thanks to that, it is easier for new and exciting projects to get public funding. It also makes it easier for the average investor to participate.

Of course, new projects in the cryptosphere usually come with a great deal of risk. Investing in such projects will require enhanced due diligence on the part of the investor. Nevertheless, all investors can participate in new projects in the cryptosphere, join them early on, and capitalize on the great upside potential they often produce.

7. Many Traditional Investors Have No Knowledge of Crypto

The technology that made cryptocurrencies possible is complex. To be able to understand cryptomarkets fully, you need more than experience in just finances or investments. That’s why there are still relatively few people or entities who truly specialize in investing in these markets.

At first glance, this may seem like an obstacle for new investors who don’t have such expertise and experience in the crypto space.

On the other hand, if you are a skilled investor and have the necessary financial background, you will have an edge over the majority of participants in the crypto markets who – as we mentioned above – are regular Internet users with no previous experience in investing.

The best results, however, will be achieved if you decide to join forces with an investment company focused exclusively on trading crypto assets – like ARK36.

8. Crypto Assets Can Never Be Taken Away From You

We have already mentioned that diversifying into Bitcoin can protect your investment portfolio from unexpected losses. However, Bitcoin offers such protection in more than one way.

Bitcoin is the first asset in history that can never be confiscated from its rightful owner. Like other cryptocurrencies, Bitcoin only exists digitally. Additionally, thanks to its cryptographic design, you can only move bitcoins from one digital “address” to another if you know a password set by the sender for the purpose of the transaction.

If you are interested in the history of money, you have likely heard about governments confiscating gold that was legally owned by their citizens and coercing them into accepting paper money in exchange. Something similar could never happen with Bitcoin making it probably the safest asset in history

9. Crypto Assets Have the Potential to Become Money

One of the reasons many commentators are sceptical about the long-term viability of Bitcoin and other crypto-assets is that it is supposedly unlikely for cryptocurrencies to become money – a widely accepted medium of exchange.

Indeed, Bitcoin may not serve that purpose as of yet. However, it’s important to remember that the technology behind Bitcoin has been around for only 10 years or so. Even if its use in some areas may still be limited, there is much room for future growth and more wide-spread adoption

According to some estimates, the number of individual Bitcoin users increases by three to four times every year. Such a high rate of adoption is astonishing. In addition, the underlying technology keeps getting more efficient and more suitable for the ever-greater range of services. If this trend continues, Bitcoin certainly has the potential to eventually become “real money”.

10. High Volatility – a Blessing in Disguise

The crypto markets can still be considered “immature” in the sense that the total market capitalization is still considerably low. This creates an environment where, unlike in the traditional markets, prices can fluctuate dramatically and over very short periods of time.

It can be exciting when the price shoots – but when the markets make a dramatic downturn, one’s capital can be wiped out in a matter of moments.

In other words, the crypto markets are highly volatile. That’s why some investors may feel unsure about investing in them. However, volatility is not necessarily a bad thing provided that you know how to navigate these markets – or have an experienced portfolio manager who does.

At ARK36, we focus exclusively on investing in the crypto markets. We are confident in our ability to manage our investors’ funds in a way that allows us to make a considerable profit while avoiding heavy losses. If the arguments for investing in crypto sparked your investment in the potential of this innovative asset class, download our Investor Prospect for more information. You can also reach out to us through the contact form on our website.

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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 the 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!