Bitcoin Trading Strategy

Imagine an investment strategy that allows investors to take advantage of the difference in the price of a certain market or asset. A recent white paper by Chris Burniske of ARK Investment Management and Adam White of Coinbase firmly and eloquently lays down the gauntlet: It’s time for investors to view bitcoin and other cryptocurrencies as their own asset class to consider for one’s investment portfolio.
This may increase the chance that the Fund will experience increased trading costs when it sells Bitcoin futures that are near expiration and purchases Bitcoin futures that are further from expiration (a process known as “rolling”), and because Minimum bitcoin investment Bitcoin futures roll on a monthly basis (as opposed to quarterly for many futures contracts), the Fund may experience these increased costs more frequently and in larger magnitudes than similar funds that invest in different futures contracts.


In an environment like the current cryptocurrency market, potential investors should be very careful to research what they’re putting their money into and be sure to find out who is involved as well as what the actual plan is for making real money – without defrauding others.
The Fund will seek to purchase a number of Bitcoin futures so that the total value of the Bitcoin underlying the Bitcoin futures held by the Fund is as close to 100% of the net assets of the Fund (the “Target Exposure”) as it is reasonably practicable to achieve, although as described in further detail below, there can be no assurance that the Fund will be able to achieve or maintain the Target Exposure.

Coinbase tends to be a good starting point for any beginner investor, due to its intuitive interface and the ability to start purchasing other leading cryptocurrencies too such as Ethereum , Bitcoin Cash and LitecoinAs with all financial investments, it’s vital that you learn how to protect your assets.
The Fund is a newly-organized closed-end management investment company with no history of operations, thus has no financial statements or other meaningful operating or financial data on which potential investors may evaluate the Fund and its performance, and is designed for long-term investors and not as a trading vehicle.

In addition to any more stringent terms imposed by a lender, the 1940 Act generally requires a closed-end fund to make provision to prohibit the declaration of any dividend (except a dividend payable in stock of the fund) or distribution on the fund’s stock or the repurchase of any of the fund’s stock, unless, at the time of the declaration or repurchase, there is asset coverage of at least 300%, after deducting the amount of the dividend, distribution or purchase price, as the case may be. Leverage can have the effect of magnifying the Fund’s exposure to changes in the value of its assets and may also result in increased volatility in the Fund’s NAV.
The Fund’s ability to maintain this level of exposure to Bitcoin is dependent on its FCM(s) not increasing the collateral the Fund is required to post as a percentage of the value of the Fund’s Bitcoin futures, and the Fund’s ability to increase its exposure to Bitcoin is dependent on its FCM(s) decreasing this amount of collateral.

In order to qualify for such treatment, the Fund must derive at least 90% of its gross income each taxable year from qualifying income, meet certain asset diversification tests at the end of each fiscal quarter and distribute at least 90% of its investment company taxable income.