Trading has been permanently frozen for the site wind down.

BTC-GROWTH  operated by morganitee since Aug, 8 2013  

Outstanding Last 24h 24h Avg 24h 24h Vol 7d 7d Avg 7d 30d 30d Avg 30d Tot Vol Mkt Cap Score
14641 14@0.083 -- -- -- -- -- -- -- 0.078 0.08205 0.08849 3,982 0 1    (1/0)

Asks   (Log in to trade ...)
1877 Shares, 173.70316 BTC
Quantity Price
1 0.088500
180 0.089300
102 0.089930
1488 0.092600
6 0.097000
100 0.099970

Market Depth

Outstanding Last 24h 24h Avg 24h 24h Vol 7d 7d Avg 7d 30d 30d Avg 30d Tot Vol Mkt Cap Score
14641 14@0.083 -- -- -- -- -- -- -- 0.078 0.08205 0.08849 3,982 0 1    (1/0)

CALL Options Available For Purchase
(an option to purchase shares)
Option ID Expiration Qty Strike Premium/ea Cost/ea
None available...

PUT Options Available For Purchase
(an option to sell shares)
Option ID Expiration Qty Strike Premium/ea Proceeds/ea
None available...

Trade History
Date Type Quantity Price Total
2013-10-08 16:07:32 Market Sell 14 ฿ 0.083 ฿ 1.162
2013-10-08 16:06:24 Market Sell 7 ฿ 0.083 ฿ 0.581
2013-10-08 02:15:06 Market Sell 60 ฿ 0.0825 ฿ 4.95
2013-10-07 21:55:22 Market Sell 2 ฿ 0.0825 ฿ 0.165
2013-10-07 21:54:49 Market Buy 2 ฿ 0.08849 ฿ 0.17698
2013-10-07 12:50:09 Market Buy 100 ฿ 0.0849 ฿ 8.49
2013-10-07 12:49:41 Market Buy 3 ฿ 0.08489 ฿ 0.25467
2013-10-07 03:22:56 Market Sell 4 ฿ 0.078 ฿ 0.312
2013-10-07 03:22:23 Market Sell 31 ฿ 0.08 ฿ 2.48
2013-10-07 02:53:23 Market Sell 169 ฿ 0.08 ฿ 13.52
2013-10-07 02:53:22 Market Sell 116 ฿ 0.0801 ฿ 9.2916
2013-10-06 16:52:53 Market Sell 5 ฿ 0.08 ฿ 0.4
2013-10-06 13:25:22 Market Sell 10 ฿ 0.08 ฿ 0.8
2013-10-04 18:58:59 Market Buy 15 ฿ 0.08499 ฿ 1.27485
2013-10-04 18:56:53 Market Buy 100 ฿ 0.0848 ฿ 8.48
2013-10-04 18:56:52 Market Buy 1 ฿ 0.08478 ฿ 0.08478
2013-10-04 18:56:52 Market Buy 1 ฿ 0.08477 ฿ 0.08477
2013-10-04 18:56:51 Market Buy 1 ฿ 0.08476 ฿ 0.08476
2013-10-02 21:34:13 Market Sell 19 ฿ 0.082 ฿ 1.558
2013-10-02 21:33:10 Market Sell 1 ฿ 0.08201 ฿ 0.08201

Dividend History
Date Total BTC Shares BTC/Share Status
2013-10-12 12:20 ฿ 1,294.04660953 14641 0.08838512 COMPLETE

Final Return of Capital to Participants Posted: 7 years ago

Our fund has now completed the process of exiting all positions, finishing with a NAV per share of 0.08838512, a change of -0.76% from our last monthly report. As previously announced, the full NAV of the fund will be distributed shortly in the form of a dividend.

Market participants may have noticed the steep decline in volume and order depth which began around the time of the Silk Road seizure and the security breach, making this an inopportune time for anyone attempting to exit the Bitcoin asset market. The combination of poor liquidity, poorly performing debt, and the effects on market prices caused by the fund itself resulted in the negative impact on our final NAV.

Comparing our results with the performance of a basket of equities mentioned in our last report, however, and excluding those with newly impaired liquidity due to very small BTC-traded capitalization (BTC-TRADING-PT, with only 19 BTC of shares remaining on the exchange) or ridiculously large spreads (CIPHERMINE-PT, where asks were 150% higher than bids as of a short time before the trading halt), it is notable that this representation of the broader market fell by a further 10.5% from our last report to 6 October, the date on which our liquidations of those assets which were listed on BTC-TC or BitFunder concluded.

The broader market took a further hit in the wake of BitFunder's 8 October announcement that it was closing its doors to US entities.

Regarding the impact of that announcement on Ukyo.Loan, my assessment of the probability that an announcement of this type would be forthcoming had already increased significantly before liquidating the fund. Despite my prior enthusiasm for Ukyo.Loan, I therefore increased my estimate of counterparty risk associated with the loan and decreased my estimate of both the viability of assets backing the loan and the likelihood of prompt repayment at face value. At the time, I was also not alone in finding that Ukyo stopped responding altogether for many days prior to the announcement, precluding any possibility of face value redemption.

In my judgement, it was therefore preferable to liquidate all of our position on the open market rather than to continue waiting for an unknown period of time in the hope that not only would Ukyo eventually respond, but also be in a position to redeem the loan at face value in a timely fashion. We exited our position at prices ranging from a 4.3% premium to face value to a 3.5% discount to face value.

Subsequent to the closure announcement, the loan changed hands at up to a 39% discount to face value; as of this writing, it is still at an 8% discount. Ukyo posted a message earlier today apparently confirming that adequate liquid capital reserves are not available to cover redemption requests.

Further to the topic of capital reserves and redemption delays, this final return of capital would have occurred sooner, had I not relied on CoinLenders to park a portion of the fund's capital as it became freed up from other positions during the final days of liquidation. I had believed that CoinLenders would maintain sufficient liquid capital reserves to cover immediate withdrawals of a few hundred BTC. However, my attempt to withdraw from CoinLenders on 10 October, with the intention of processing the final dividend on that date, failed silently -- with no error message and with no transfer credited to I wrote to the site's support address, and some hours later I was told that the site's hot wallet was empty and I should expect to receive the coins in the next two days; the funds were received approximately 39 hours after the original silent failure.

Payment of the final dividend brings NAV to zero and officially marks the end of the BTC-GROWTH fund. Thank you again for the opportunity to operate the fund, even if only for a brief time.

Returning Capital to Participants Posted: 7 years ago

We've reached the last business day before Monday's halt in BTC-TC trading. The alternative exchanges with which I've been in touch since BTC-TC's announcement have not yet been able to provide either a plan for moving assets or a timetable for when they expect to produce a plan. (Note that moving an asset entirely is a very different thing than merely transferring underlying shares from one passthrough operator to another or shifting ownership between accounts on two different exchanges both of which already list a given asset.)

In the absence of a credible platform for enabling participants to enter and exit the fund at will, I will plan to close the fund and return capital to participants. I would expect this process to be completed well before the closure of BTC-TC itself that was announced for the end of October.

Many participants have made strong arguments for continuing with the fund regardless of the availability of an exchange, and I greatly appreciate the support and the time which has gone into conveying this preference to keep the fund running. I remain open to the possibility of offering a similar fund privately or even of offering a new exchange-traded fund, when and if the exchanges provide clarity on their own plans.

For now, however, I am not prepared to keep participants' capital locked up, without liquidity, while continuing to wait for a still unknown period of time for a still unknown plan. The fund will move to cash and return capital to participants via the exchange's dividend mechanism; this will save on transaction costs that would otherwise be incurred via its buyback mechanism.

The process of unwinding positions has already been underway for a few days in anticipation of this eventuality, but it will still take some days to complete the task efficiently. Due to the way variation margin works, futures positions in particular cannot be unwound quickly without unnecessary loss of capital; in addition, it is likely we will lose a few percentage points on some of our positions in listed assets, as the fund's exit will, however gradual, likely be enough to move the market. As per our previous monthly report, I will personally take on the liability of a 7 BTC, 90-day loan made by the fund. Finally, as of this writing, the fund is still owed 26.43 BTC by the operator of another asset on BTC-TC; this operator has previously made good on 59.44 BTC owed to the fund, and at this time, I have no reason to believe the individual will default.

Thank you to all participants for the opportunity to operate this fund, even if only briefly. I am very grateful for that opportunity, and I appreciate your many messages of support.

September 2013 Results Posted: 7 years ago

Since our interim report on 23 September, the fund's Net Asset Value has climbed to .0891 BTC per share, an increase of 9.73%.

Relative to our previous full report which covered the month to 14 September, NAV per share decreased by 11.92%.

For comparison, a sample of relatively large and liquid equities across BTC-TC and BitFunder had already fallen by an average of roughly 18% from the end of our previous period thru 22 September, the day before the announcement of BTC-TC's closure. Extending that period by another 8 days, to 30 September, the same group of equities had not only failed to rebound, but had instead continued to fall for a total loss of approximately 43%.

We are still in discussions about moving the fund to a different exchange, and an announcement will be made in this regard as soon as we have something concrete to report.

For the full report, please see the fund's forum thread:

Monthly Report Details for BTC-GROWTH Posted: 7 years ago

The second full report for BTC Growth will be published in summary form on BTC-TC and in both summary and detailed form on the fund's discussion thread on Tuesday 1 October at 1 pm UK time. This early date will bring our reporting in line with calendar months.

Interim Report 23 September 2013 Posted: 7 years ago

In light of the pending closure of the BTC-TC exchange, and the immediate and negative impact which Burnside's announcement has had on listed assets across the board, we are releasing an interim report on the current state of the fund and our options going forward.

Taking a snapshot of our current holdings across all platforms, and estimating values on BTC-TC using bid values current as of this writing, the fund's NAV has fallen to .0812 BTC per share, a decrease of 19.731%.

We are currently evaluating ways forward. As of this moment, closure of the fund -- with the option to re-open it in future on another exchange -- appears to be the leading candidate, but if another exchange should step in very quickly to provide a clear plan for picking up the pieces of BTC-TC, that assessment could change.

For the full interim report, please see our announcement in the fund's main thread:

August-September 2013 Results Posted: 7 years ago

During the month from the fund's initial offering on 15 August to 14 September, net asset value after fees increased from 0.0998 BTC per share (i.e., .1 BTC per share at the offering, net of the exchange's 0.2% transaction fee) to 0.1012 BTC per share. This represents an increase during the month of 1.403%, or 18.20% on an annual basis.

Gains in equity derivatives and forex derivatives offset losses in equities, while a backdrop of debt delivered less volatile returns. As a new fund, the cost of moving from cash to new positions with sometimes exorbitant bid/ask spreads was significant, creating immediate losses -- relative to market bids -- which in some cases approached high single digits in percentage terms.

The fund's initial allocation of capital ensured that no single entity held more than approximately 30% of the total, achieving sufficient diversification that even the complete failure of an entire exchange or an entire asset would have left the vast majority of our capital safe and untouched by such an event.

For the full report, please see the fund's forum thread:

Monthly Report Details for BTC-GROWTH Posted: 7 years ago

The first monthly report for BTC Growth will be published in summary form on BTC-TC and in both summary and detailed form on the fund's discussion thread on Monday 16 September at 1 pm UK time. For reference, this is 8 am in New York and 8 pm in Beijing.

For more information on the fund itself, please see the listing documents:

IPO Details for BTC-GROWTH Posted: 7 years ago

The initial offering for BTC Growth will kick off on Thursday 15 August at 1 pm UK time. For reference, this is 8 am in New York and 8 pm in Beijing.

For more information on the fund itself, please see the listing documents:

For information on the mechanics of the offering, please see the forum announcement here:

No motions yet
Contract & Prospectus
Moderator Score 1  (1/0)
Moderator Votes YES 1 / 0 NO    (0 ABSTAINING -- Users with 10 or more shares of LTC-GLOBAL are allowed to vote.)
Shares Outstanding 14641 / 1000000 Issued
Issuer morganitee <>
Issuer Detail

The fund will be provided as a service to the exchange by Mulhauser Consulting Ltd., a UK company which was incorporated in June 2002 and which has been in continuous operation ever since.

Registered office:

2 Mill Road
Suffolk CB9 8BD
United Kingdom

UK registration number: 4455464

The fund will be managed by Dr Greg Mulhauser, the company's founder and Managing Director. In other areas of its business, the company works with a team including both volunteers and paid employees and consultants, but for the purposes of this service, fund management will be handled entirely by the Managing Director.

With educational background in mathematics, philosophy, and later in mental health, Dr Mulhauser has worked at the Pentagon, UK universities, and telecommunications giant BT. Originally employed at BT as a research scientist in cognition, complex systems and biologically inspired computation, he was also responsible for curiosities such as the Lattice of Extended Turing-Style Automata, which he designed as a novel computational architecture for implementation with FPGAs in a fashion similar to cellular automata. He later left the Complex Systems Laboratory for business strategy roles and advised on corporate venturing and on derivatives strategies associated with M&A projects. He contributed to the company's Asian portfolio management, assessed flotation and alternative demerger options for its wireless operation, and developed strategy for its £500 million indirect channels business. In 2002, he left a strategic partnering role in security and mobile technology to found his own firm, securing consulting contracts ranging from ground-based air defence systems at Northrop Grumman and the UK Ministry of Defence to internal communication at the UK's national Police IT Organisation (PITO). A British Marshall Scholar and Fellow of the Royal Society of Arts, Mulhauser lives in Devon, England with his wife and daughter.

Additional information about the fund manager specifically regarding his investment background is available from one of the newest sites in the company's portfolio, Psychological Investor:

Potential participants can get something of a flavor of the fund manager's general approach to investing from the same site, and a small selection of his recent articles specifically about the Bitcoin economy can be found here:

For further background, the archive section of the Mulhauser Consulting site also includes work on business strategy development and even older research work on topics like algorithmic information theory, computability and recursion theory dating back to the 1990s. (Greg Chaitin, who as a teenager independently invented algorithmic information theory alongside Kolmogorov and Solomonoff, described the fund manager's first book as "One of the first serious applications of algorithmic information theory; fun to read!")

Posts by the fund manager on the forum can be found here:;u=132160;sa=showPosts

As with ordinary hedge funds, in which the General Partner typically invests alongside Limited Partners, the fund manager intends to participate in the fund, helping to ensure alignment between his interests and those of the fund. Note, however, that the General Partner/Limited Partnership model itself is neither desirable nor practical for a fund intended to trade freely on a Bitcoin-denominated exchange.


Fund Goal

Operating as a hedge fund-style service to the exchange, the BTC Growth fund aims to achieve capital growth denominated in Bitcoin. In other words, it aims to increase the Net Asset Value per fund unit, as denominated in Bitcoin. The fund aims to do so in an environment of managed risk and moderate portfolio diversification.

Investment Approach and Context

The fund may invest in securities listed on Bitcoin-denominated exchanges, or in unlisted short-term debt of listed or unlisted businesses with demonstrable cashflow. It may construct strategies using derivatives intended to hedge risks associated with these investments or to generate returns in their own right. In exceptional circumstances, the fund may invest privately in unlisted businesses where one or more potential exit strategies can be identified in advance, but due to its seniority in terms of capital structure and the lack of a secondary market for equity in unlisted businesses, debt will generally be favored. The fund may provide capital to exchanges, and it may construct positions designed to extract value from volatility in the value of Bitcoin versus other currencies. The fund will attempt to deal appropriately with correlations or outright overlap between potential investments.

As of this writing, the landscape of publicly traded Bitcoin investments is extremely limited, with very few offering a compelling case for investment. A small handful of new candidates may become available for private equity investment, with additional risks and limited liquidity. However, the context is also changing rapidly, and the landscape may look very different in the coming months. As the Bitcoin economy matures, the issuer anticipates diversifying the fund's portfolio up to a maximum of two dozen separate assets, not including individual derivative positions. While this would place it at the concentrated end of the spectrum by fiat standards, when compared to typical Bitcoin investment vehicles, it offers moderate diversification.

All investment will be handled directly by the fund manager; trading bots and related automated methods will play no role.

Excluded Investments

While the range of securities which the fund will not invest in is obviously unlimited, potential participants should note two in particular: the fund will not invest in mining bonds not backed by current actual mining, and it will not invest in securities whose principal characteristics or activities incorporate unhedged conversion of Bitcoin into other assets or whose value derives principally from an unhedged fiat income stream. The latter include 'store of value' type assets, such as funds holding precious metals, funds buying real estate to generate rental income, and others.

The fund manager has outlined separately his views on the asymmetry of risk in perpetual mining bonds in particular; see 'Bitcoin Mining Revisited: Asymmetric Risk in Perpetual Mining Bonds':

As a result, the issuer does not expect the fund to invest in mining bonds of any kind except those which are believed to be backed by actual current and ongoing mining activities with demonstrable returns.

With regard to precious metals funds and other 'store of value' assets, investing in these assets is equivalent to taking an unhedged short position in Bitcoin relative to the precious metal or other asset in question. As a result, these investments incorporate unlimited risk with respect to appreciation in the value of Bitcoin as expressed in units of the precious metal or other asset. Shorting without a hedge is a paradigm example of a poor way to invest if one's aim is to achieve capital growth denominated in Bitcoin.

The picture is similar for funds holding fiat-denominated real estate with a view to generating fiat-denominated rental income: to generate positive returns denominated in Bitcoin, the total return of the investment in fiat terms needs to be greater than any appreciation in the value of Bitcoin relative to the fiat currency in question.

The fund manager has written separately about these types of investments in 'How to Lose Money with a Bitcoin Investment, Part 2: The Unhedged Short':

For the avoidance of doubt, ongoing mining operations will not be treated as falling into the class of investments incorporating unhedged conversion of Bitcoin into other assets. As Furuknap has pointed out, analyzing the value of ongoing mining operations is extremely complex, but for the purposes of this document and purely from the perspective of Bitcoin-denominated capital growth, our primary interest is in the Bitcoin-denominated net present value of the resulting free Bitcoin revenue stream and how much we would have to pay in Bitcoins today to secure that stream. (Changes in the value of Bitcoin versus fiat do impact that stream, but not at all straightforwardly: it is not a simple matter of mining activity climbing as Bitcoin climbs and mining activity falling as Bitcoin falls.) Our questions would differ if we were assessing the fiat-denominated return of an investment of fiat currency in fiat-denominated hardware producing revenue converted to fiat.

Finally, the fund will not trade on margin unless at least one of the following two conditions is met: 1) margin borrowing is fully covered by the fund's cash, or 2) margin borrowing is coupled with a guaranteed stop loss order limiting potential losses to an amount fully covered by the fund's cash.

Capital Structure and Voting Rights

Shares (also commonly called 'units' in this context) represent a proportional interest in the net assets of the fund itself, not in the issuer; that proportion for any given investor's holdings is calculated by dividing the number of shares held by the number of shares outstanding. The collective interest in the net assets of the fund represented by the total shares outstanding shall always be 100%. As described in the section headed 'Subscriptions and Redemptions,' the issuance of new shares and the redemption of outstanding shares will be conducted in such a way as to enhance, rather than dilute, Net Asset Value per share.

Shares in the fund carry no voting rights with respect to entities in which the fund has invested, and should shareholder votes be called by those underlying entities, the fund manager intends to cast votes in the manner he believes best furthers the financial interests of the fund's shareholders.

Fund Performance

Potential participants should understand that this is not an absolute return fund.

The issuer provides no guarantee of positive performance, and participants may receive back less than their original investment. The value of Bitcoin businesses and of Bitcoin itself relative to fiat is highly volatile, and Bitcoin financial markets, such as they are, appear to be relatively inefficient from an information theoretic standpoint.

For background on information theoretic assessment of market efficiency, see the paper 'Algorithmic complexity theory and the relative efficiency of financial markets', by Giglio, et al.:

Inefficiency and volatility, together with rapid growth in the Bitcoin economy itself, provide significant opportunities for growth and creation of shareholder value; these same characteristics also provide significant opportunities for destruction of shareholder value.

Disclaimer of Guarantees, Indemnification and Legal Jurisdiction

The fund issuer makes no guarantee, either explicit or implied, as to the suitability or fitness for purpose of this fund for any investment goal or for the needs of any specific participant. No individual should consider participating in this fund if they require such a guarantee, or if they are in any doubt whatsoever as to the meaning of any word, phrase or concept employed in this document or in an external resource referenced by this document. Potential participants should not participate in this fund if their own personal risk tolerance does not accommodate the general picture of risks described in the section headed 'Risk Factors.' Potential participants should seek independent financial advice if they have any questions about the suitability of this fund for their needs.

By participating in the fund, participants assert and agree that such participation is at their sole risk. By participating in the fund, participants assert and agree that in no event will the issuer or the fund manager or any person or entity involved in the operation of the fund be liable for any damages, including, without limitation, direct, indirect, incidental, special, consequential or punitive damages arising out of the participant's participation in the fund. By participating in the fund, participants agree to defend, indemnify and hold harmless the fund issuer, the fund manager, their affiliates and their respective directors, officers, employees and agents from and against all claims and expenses arising out of their participation in the fund; notwithstanding the aforementioned indemnification, the fund issuer shall remain liable to each participant for that participant's proportional interest in the Net Asset Value of the fund.

By participating in the fund, participants assert and agree that they understand, acknowledge, and accept that the fund manager is not a registered financial advisor and that the fund issuer is not a bank, brokerage firm, insurer, exchange or other financial institution; they further assert and agree that operation of the fund is not provided as an investment; they further assert and agree that operation of the fund is provided as a service to the exchange and not as a service to any individual participant on the exchange.

This document will be interpreted under the laws of England and Wales.

Section headings used in this document are for convenience only and shall not be given any legal import.

Individuals considering participating in this fund should ensure they are familiar with and fully accept the terms of service of the exchange itself; this fund is available solely through the exchange and should not in any way be construed as a direct offer or solicitation from the fund issuer to potential participants.

Potential participants for whom this document is in any way 'TL;DR' should not participate in this fund.

Compliance and Modifications

The fund issuer may update this document from time to time as needed for administrative or other reasons, including to ensure compliance with applicable laws and regulations. Except where required to do so by law, the fund issuer will not make any modifications to this document which could reasonably be foreseen to cause a materially negative impact on participants' interest in the fund without a minimum of 30 days of prior notice.

Initial Offering, Minimum Participation Level, and Fund Closure

Following the initial offering of shares in the fund at a price of 0.1 BTC per share, investment by the fund will begin as described in this document, provided that a minimum of 2500 shares have been taken up. If the initial offering does not attain this level, the fund issuer may choose to cancel the exchange listing and promptly return the fund's Net Asset Value to participants. If at any point in the future, redemptions bring the total number of outstanding shares below 2500, the issuer may likewise opt to close the fund and return its Net Asset Value to participants. The initial exchange listing fee will be paid entirely by the fund issuer and will not be charged against the value of the fund, regardless of whether the initial offering attains the minimum participation level.

More generally, the issuer retains the right to close the fund at any time, for any reason — including a lack of suitable investment candidates — its only obligation to participants being to distribute current Net Asset Value to them. Should this occur, the issuer intends to provide participants with public notice 30 days prior to closure, but in certain circumstances (including but not limited to the death or disability of the fund manager), notice may not be provided in this fashion. Closure may be effected via a buyback of all outstanding shares using the mechanisms provided by the exchange for this purpose.

Periodic Public Reporting on NAV

Approximately once per month, the fund's investments will be marked to market, and the issuer will publish the fund's Net Asset Value (NAV) and an overview of its current strategy and investment types. Net Asset Value will provide the basis for determining fund fees as well as providing subscription and redemption windows as described in the following section. The frequency of NAV reporting may be adjusted so as to occur more or less frequently, in accordance with participant interest; any decision to adjust the frequency of reporting will be announced publicly at least 7 days in advance.

In the case of individual equity options, for which a bona fide market does not exist, open positions will be valued using the best available data at the time -- for example applying the most recently available implied volatility for the nearest match offered in terms of strike price and expiry. Debt for which no secondary market exists will be discounted for any potential impairment as estimated by the fund manager. Investments in unlisted businesses will be valued on a case-by-case basis, with adjustments relative to original book prompted by changes such as significant changes in cashflow or new valuations implied by the unlisted business's subsequent funding rounds. The fund manager is well aware of the hazards implicit in attempting to value illiquid assets such as unlisted businesses, and therefore adjustments to original book will be made only where the case is compelling.

As a general rule, hedge funds do not disclose full trading histories, and they disclose snapshots of specific holdings only weeks or even months in arrears, if at all, so as to minimise the adverse impact on returns caused by publicizing their ongoing investment strategies. Participants who rely on portfolio snapshots to infer underlying investment strategies, or who otherwise require detailed updates on portfolio changes, should probably not invest in hedge funds in general and should not participate in a Bitcoin-denominated fund operating in a hedge fund style.

Subscriptions and Redemptions

While hedge funds normally apply a lock-up period of up to two years, during which time participants cannot withdraw from the fund, the fund issuer intends to pursue investment strategies that will provide sufficient fund liquidity to support periodic redemptions. Unlike a normal hedge fund constructed around a General Partner/Limited Partnership model and which therefore does not trade on an exchange, participants will not be required to serve notice of their intention to redeem; instead, the fund issuer may, at its discretion, support redemptions via open market purchases should the fund's shares trade at a significant discount to the most recent publicly reported NAV. This means that participants wishing to exit their positions can, in the first instance, simply sell their shares on the open market; should the open market bid fall significantly below the fund's most recently published NAV, the fund issuer may, at its discretion, place bids to re-purchase shares at a level intended to fall in the closed interval between NAV and the open market bid. Similarly for new subscriptions (issuance of new shares): should the open market ask price rise significantly above the most recently published NAV, the issuer may, at its discretion, place offers intended to fall in the closed interval between NAV and the open market ask, so as to issue new shares.

The intention is to protect the value of continuing participants' investment by ensuring that any new shares placed on the market are offered at NAV or at a slight premium to NAV and that any redemptions occur at NAV or at a slight discount to NAV, while simultaneously providing liquidity at market or better than market rates to participants who choose to exit their investment. For participants, this offers significantly greater flexibility than either fixed lock-up periods or the hefty fees sometimes applied in lieu of lock-up periods.

When in operation, the subscription and redemption facility will be made available only for a relatively brief period following the publication of the fund's NAV, so as to preclude any incentive for the issuer either to issue or to re-purchase on the basis of knowledge about the fund's NAV which has not yet been made public. (While doing so might provide a short term benefit for existing participants in the fund, it would be contrary to the interests of new participants and thus would not serve the longer term development of the fund as a whole.)

As to why lock-ups or withdrawal limits would ever be required for hedge fund-style funds in the first place, when no such restrictions apply to investments such as normal exchange traded funds, the principal difference is functional: hedge funds typically cannot simply buy and sell stocks at will to maintain a target portfolio composition. For funds which intend to employ derivatives, for example — including this one — planning for the decay of time value incorporated within a derivative's price forms an important part of investment strategy. Likewise, investing directly in debt of other businesses where no secondary market exists necessarily involves specific periods of maturity. As a result of these and other factors related to their active investment strategies, virtually all hedge funds provide substantially less liquidity than any typical exchange traded fund. (In some cases, lock-ups may also relate to regulatory rather than functional concerns, such as requirements associated with registration exemption under Regulation D.)

By listing directly on one or more exchanges, however, and by providing a straightforward facility for periodic subscriptions and redemptions, BTC Growth intends to provide substantially more liquidity than any typical hedge fund.

Management and Performance Fees

In line with common hedge fund practice designed to incentivize performance, this fund employs the well known 'two and twenty' structure, whereby the fund issuer will receive an annual management fee of 2% of assets under management and participants share 20% of fund profits with the issuer as a performance fee. Fees will be calculated monthly, with the annual management fee applied on a pro-rata basis; effectively, this translates to 0.17% per month.

For illustrative purposes, the two and twenty structure means that if the per unit NAV of the fund increases by 30%, participants will share 6% in absolute terms (20% of 30% in relative terms) with the fund issuer, while retaining 24% in absolute terms (80% of 30% in relative terms) for themselves. This performance fee is constrained by a rolling high-water mark, which will be tallied on a trailing three-month basis. The high-water constraint means that no performance fee will be paid should the fund's NAV before management fees fail to attain at least its previous highest level reached in any of the preceding three months. The high-water mechanism is intended to ensure that the fund issuer does not profit from simply losing value and then regaining that value.

Data Protection Act

The fund issuer is registered as a data controller under the UK Data Protection Act. The fund issuer will not sell, lend, or otherwise disclose personal details of individual participants — including the participant email addresses provided to it by the exchange — to any third party without the consent of the participant concerned, except where it is required to do so by law or by the rules of the exchange.

Risk Factors

The following risk factors describe a sample of risks specific to participating in this fund, many of which derive from risks inherent to Bitcoin funds in general. This list is not intended to be exhaustive. This list is based on that provided at the fund site:

Systemic Risks

While the fund may hedge against risk specific to businesses in which it invests, it does not intend to hedge against systemic risk. This means that any event which could negatively impact the Bitcoin economy as a whole should be assumed to impact the fund itself. Such events might include, but clearly are not limited to, the possession or transmission of Bitcoin being outlawed; pathological failure of the Bitcoin network due to intrinsic software or design faults or extrinsic attack or interference; or sustained loss of confidence in Bitcoin as a currency or store of value.

Company Specific Risks and Lack of Transparency

No 'companies' — in fact, very few are incorporated as companies at all — which are currently available for the fund to invest in offer any significant operating history, any reasonable level of financial transparency, or more than a few nods in the direction of modern standards of corporate governance. At best, companies available for Bitcoin-denominated investment have been involved with Bitcoin for less than four years, while the entire operating histories of most are actually numbered in months. Even the largest cats in this space provide little or no financial transparency, auditing, or shareholder-friendly corporate governance. Many operate anonymously and outside the reach of regulatory frameworks that could provide recourse for shareholders or creditors in the event of disputes, corporate malfeasance or simple incompetence. These factors and more make the evaluation of risk associated with any given investment extremely challenging. Participants should expect that the fund will not always make these evaluations correctly and will be unlikely to foresee all or even any changes in the competitive landscape of individual companies that could alter their risk profiles radically.

Currency Exchange Risks

The fund will not, in the general case, hedge against changes in the exchange rate of Bitcoin relative to the dollar or other fiat currencies, except to the extent that doing so may form part of activities designed to hedge against risk inherent to a portfolio business which is itself exposed to changes in the exchange rate, or activities specifically designed to profit from movements in the exchange rate. Participants should not use the fund as any form of hedge against changes in exchange rates. As an illustrative example, if the fund gains 20% per annum in Bitcoin terms, but Bitcoin itself falls by 20% against the participant's native fiat currency during the same period, then relative to the participant's native fiat currency, the participant has lost 4%. (One Bitcoin invested grows to 1.2 Bitcoins, but 1 Bitcoin falls to .8 times its original value in fiat, yielding 1.2 multiplied by .8, or .96 times original fiat value.)

Exchange Platform Risks

By necessity, the fund will rely on fully functioning exchanges both in its investment activities and in the issuing and redemption of shares. Such exchanges introduce their own type of risk which cannot easily be hedged against, except via diversification. Participants should be aware that the failure of one or more exchanges used by the fund may significantly adversely impact the value of the fund. Even in the case of fund shares listed on BTC-TC, where up-to-date participant lists are emailed once very 12 hours, orderly liquidation of the fund in order to return investments to participants may adversely impact the value of the fund, and it may prove difficult or impossible to reconcile claims from participants who traded in shares of the fund prior to the time of exchange failure but subsequent to the time the latest participant list was emailed.

As a point of interest, one recent study of 40 different Bitcoin currency exchanges found a failure rate of 45% and a median life expectancy of just 381 days:

Liquidity and Standardization Risks

Particularly with respect to derivatives, the Bitcoin economy does not provide the level of liquidity or standardization that investors expect in the fiat world. This severely restricts the utility of derivatives as a reliable component of Bitcoin-denominated investment strategies. It is not unusual to find both futures on Bitcoin versus the dollar and individual company options radically over-priced relative to theoretical pricing models, and it is not unusual to find insufficient market depth in either to support anything other than relatively small positions. The absence of market makers and the structure of existing markets for trading derivatives also make it impossible to enter even the most basic of combination positions, such as vertical spreads, without the higher risk of "legging in" (if at all). Butterflies are just a distant dream. Nor is it typically possible to liquidate such a combination position reliably, and in the absence of a central clearinghouse acting as guarantor and facilitating orderly assignment, failing to liquidate prior to expiry introduces risks of its own.

The fund manager has written separately about this in 'The Puzzles of Bitcoin Options for Ordinary Investors':

Counterparty Risks

As of this writing, Bitcoin-denominated currency exchanges operate as trading networks, meaning that they broker transactions between third parties, rather than acting as counterparties to the trades themselves. In the absence of a central exchange acting as counterparty, only exchange software platform features protect exchange participants from counterparty risk. During times of high market volatility, exchange software platform features may in the future be — and have in the past been — inadequate to protect market participants fully from counterparty risk. (Many people continue to believe that a non-centralized currency is somehow incompatible with a centralized exchange or, for that matter, a centralized options clearinghouse in the case of options on stocks, even though comparing these meanings of 'centralized' is like comparing apples and The Jetsons.) Where appropriate, the fund will attempt to mitigate risk due to the absence of an identifiable exchange or market maker acting as counterparty, but participants should be aware that in many cases it is essentially impossible to hedge such risks at all, save for in the very limited sense made possible by diversification.

Underperformance Risk Due to Liquidity Maintenance

The liquidity necessary to support ongoing redemptions does not come without cost in terms of performance: capital held in cash or very short dated debt so as to be available to support redemptions will be unavailable for deployment into other investments potentially offering significantly higher returns.

Underperformance Risk Due to Volatility Management

Attempting to reduce portfolio risk via diversification and explicit hedging may reduce the impact of adverse price moves, but such risk management may also reduce the 'risk' of advantageous price moves. In other words, successfully reducing portfolio risk may reduce returns.

Fund Management Competence and Experience Risks

While the fund manager offers significant experience managing portfolios of equities, commodities and listed derivatives, and has successfully invested in the Bitcoin economy for a time, it is entirely possible that his experience will not translate fully into successful management of a potentially larger fund of this type. In particular, the relatively primitive nature and limited liquidity of derivatives available in the Bitcoin space do not currently support the same array of strategies that can be constructed with standardized derivatives. Without recourse to other than the most primitive of strategies, it is entirely possible that the fund manager will be unable to construct suitably hedged and profitable positions.

Regulatory Risks

As a United Kingdom registered company, the issuer is subject to any and all legislation which might be introduced by the UK government to regulate, limit, or even prohibit activities of this type. While the company will make commercially reasonable best efforts to continue the operation of the fund while complying with unforeseen new legislation, it is possible that new legislation may make this impossible. As of this writing, our understanding is that the UK government has indicated that Bitcoin investment gains are not subject to tax until the point at which they are converted to fiat currency. We believe that this situation affords significant leeway to operate a Bitcoin-denominated fund without incurring the overheads of taxation that would otherwise become due as a result of our current structure as an ordinary limited company rather than as a passthrough investment company. As a point of interest, the UK government has also reportedly indicated in direct correspondence with an exchange operator that the operation of an exchange itself does not at this time require registration as a money transmitter:

We hope and believe that this provides an early indication of the UK government's intention to pursue policies which will not unduly constrain growth in the Bitcoin economy.

Data Loss, Death and Disability Risks

For many years, the company has had an encryption recovery policy and continuity procedure in place to help ensure the ongoing operation or, if necessary, the smooth winding down of the company, should death or other unplanned circumstances such as sudden disability compromise the ability of the company's Managing Director to continue in his role.

Although steps have been taken to mitigate the risk, it remains possible for the company to suffer catastrophic data loss. Should both sets of encryption keys for our doubly-encrypted, geographically distributed backup system be lost, the company's electronic assets would in effect be digitally shredded, significantly impairing the company's ability to function.

In addition, should the fund manager die or become otherwise unable to continue in his role, a significant gap may occur in the management of open investment positions before the portfolio can be fully liquidated and gracefully wound down. This may adversely impact the fund's value.

The Not-So-FAQ

In anticipation of some of the types of questions frequently asked when any proposed new exchange offering is announced on the forum, this small selection of questions directed at the fund manager is included in hopes of allowing a few of them to be not-so-frequently asked.

Q: OMG, are you some kind of total n00b? You only registered on the forum in June! Who do you think you are, proposing an investment fund without at least [insert preferred number] posts or activity level [insert preferred number] under your belt?

A: I appreciate that many who have participated in the forum for longer periods of time have invested thousands of dollars worth of their time in generating hundreds or even thousands of forum posts. I also appreciate that the longer a person has been involved with the forums, the more opportunities they have had to have been personally duped by someone who later turned out to be a scammer. I understand that this can create a very strong incentive not to repeat the mistakes of the past and to treat everyone who has not followed the same path of investing large sums in forum posts as arrogant, incompetent, or out to get you (maybe all three). However, I hope that even the oldest of old timers will acknowledge that not everyone treats investing large sums in forum posts — or even registering on the forum at all — as a pre-condition for learning about Bitcoin, for using Bitcoins, or for investing in the Bitcoin economy. (I am far from alone in having done all of these things before registering on the site, as evidenced at the very least by my articles published prior to registering for a forum account.) The ghosts of scammers past demonstrate all too well that forum longevity does not on its own imply anything about trustworthiness or competence; registration date on a forum is simply not a reliable proxy for either competence or trustworthiness. On the contrary, a robust and well-aged forum account is a scammer's single most powerful tool of exploitation. Nor does the absence of forum longevity on its own imply anything about an absence of trustworthiness or competence.

The crowd-sourced forum view of the competence or trustworthiness associated with a (usually pseudonymous) user account provides one extremely limited signal, one distinctly noisy source of information, about the actual underlying competence or trustworthiness of the individual behind that account. Since I have personally chosen to discard pseudonyms and instead to interact with the Bitcoin community as a real individual, with a real name and a real business and a real reputation and fully enforceable laws to follow, I hope that members of the community will consider the full range of signals and information sources made available to them, including not just my forum posts but also the other information I have provided. For more specifically on gauging my trustworthiness with reference to evaluations by non-anonymous entities with statutory teeth, such as national governments, please see the end of my reply to the next question.

Q: Why don't you have a WOT account? Don't you understand that if you don't have a WOT account, you're nobody, and you've never been in the business of Bitcoin at all?

A: I respect the value of the WOT in helping to promote safety in largely anonymous transactions which are inherently irreversible. Moreover, I appreciate the value of anonymous transactions themselves, and I have no problem with them. Speaking for myself, however, I have no particular interest in transacting anonymously, and therefore I have no interest in accumulating trust ratings for a pseudonymous — or autonymous, for that matter — WOT user account. (I also began accepting Bitcoin payments for registration fees on professional sites in mental health and veterinary medicine some time ago and have not been asked for WOT credentials even once; it should not be surprising that out in the wider economy of people willing to try out Bitcoin transactions with openly identified, non-anonymous people, many and perhaps most have never even heard of the WOT. When a guy or gal walks into a pub in London and pays for a round of pints with Bitcoins, nobody cares about the WOT.) I do, however, value privacy and therefore recognize both the distinction between anonymity and privacy and some of the ways in which focusing on anonymity may actually undermine privacy. I have written separately about this with 'In the Bitcoin Economy, Anonymity and Privacy are Not the Same Thing':

With regard to trust more generally, potential participants might also like to review some of my previous history and the positions of trust I have held. They may also note that I have held Enhanced Disclosure from the UK's Criminal Records Bureau, and they should be aware that none of the occasions on which I have worked for the US or UK governments would have been possible had those governments not satisfied themselves fully with regard to my trustworthiness.

Q: Can you prove this isn't a Ponzi scheme?

A: Of course not. Since almost any business structure can, over time, be turned into a Ponzi scheme or a similar variant on the 'delayed implosion' theme via modifications that were not apparent at the start, it's vaguely analogous to the halting problem: if something is obviously structured as a Ponzi scheme, then you can identify it, but if it has not yet completed a subtle transformation into a Ponzi scheme, you have no way of proving whether or not it might still become one but just hasn't done so yet.

What I will say is that if someone were going to stand up publicly and put their name, reputation, and 11-year-old company on the line for a scam which would obviously be a once-only, burn-your-bridges-forever, deeply unethical and permanently character-tarnishing sort of thing, one which would involve significant risk of going to prison (given that the protections of anonymity were discarded), wouldn't they choose something with a significantly higher payoff than a small Bitcoin investment fund? I personally wouldn't do that to other people or to myself anyway, but if I imagine myself in the shoes of someone who would be willing to do it, I think I would want a whole lot more than a Bitcoin investment fund to counterbalance everything I would be giving up.

Potential participants may note that the SEC finally indicted pireateat40 for fraud in July 2013:

Q: Are you a sock puppet paid by the finance industry? You're obviously way too interested in Bitcoin investments!

A: I hesitate to dignify this with a response, but having been blindsided by a profanity-spewing, hero-adorned troll on the Bitcoin forum who hurled accusations that my interest in Bitcoin investments must imply that I have no real interest in Bitcoin technology and must instead be a 'sock puppet' paid by the finance industry to post on the forum, I recognise that there could be some much more civil non-trolls who might wonder the same thing. No, I am not a sock puppet. Potential participants who share this worry should consider reading about my background on Psychological Investor, on the Mulhauser Consulting company website, on my mental health site, or on some of my other websites and forming their own conclusions. (Having first encountered elliptic curve cryptography, for example, while employed at Europe's largest communications technology research lab in the 1990s, it's just too funny to hear this kind of accusation from an individual labelled a Bitcoin 'hero' because they registered anonymously on a discussion forum — a whole two years ago — and promptly began distinguishing themselves via the crudity of their insults aimed at fellow users.) Participants who do not trust material except what they read on the Bitcoin forum or who otherwise remain convinced that I am a sock puppet should not participate in this fund.

Q: Why do you keep referring to it as a 'hedge fund-style investment'? Is it a hedge fund or isn't it?

A: Nothing at all rides on whether this service to the exchange is called a hedge fund or not called a hedge fund. There is no statutory definition of 'hedge fund' and no standard checklist of characteristics which would separate hedge funds from non-hedge funds. Nonetheless, things which get called hedge funds typically do display several of a particular set of characteristics, and this service shares many of the characteristics in the set. Participants who object to the term 'hedge fund' might choose to call it an actively managed exchange traded fund. Should new legislation be introduced to subject Bitcoin-denominated hedge funds to the same regulations and limitations as fiat-denominated hedge funds, such as a restriction to participation by accredited investors only, this fund certainly should be called an actively managed exchange traded fund and not a hedge fund.

Potential participants should note that the General Partner/Limited Partnership model common to traditional hedge funds, in which investors are Limited Partners, is neither desirable nor practical for a fund intended to trade freely on a Bitcoin-denominated exchange.

Q: Why won't the fund pay dividends?

A: The objective of the fund is to achieve capital growth denominated in Bitcoins, not current income. Potential participants who require current income rather than capital growth should not participate in the fund. Obviously this does not mean the fund will not invest in other businesses which do pay dividends, since it is the total return of portfolio investments that matters to the fund's NAV.

Q: Why won't the fund trade on margin except under the two circumstances described?

A: The two circumstances (namely, full coverage of margin borrowing with cash and full coverage up to the amount protected by the guaranteed stop loss order) enable the fund to avoid owing more than it can repay, regardless of how suddenly or violently the market might move.

Q: Why doesn't the fund intend to provide detailed trading histories and a portfolio list?

A: The issuer does intend to publish periodic overviews of investment strategy, to the extent that doing so does not compromise the strategy. As a general rule, however, hedge funds invest actively and therefore do not publicize the details of their evolving strategies, open derivative positions, or equity portfolios; where portfolio 'snapshots' are reported, for example for regulatory reasons, this typically takes place weeks or months after the fact. This differs markedly from a passive index fund or other fund simply investing in a basket of shares and maintaining a fixed portfolio allocation.

Potential participants should note that portfolio snapshots published by actively managed funds — i.e., those which do not have a fixed portfolio composition — can be extremely misleading to investors due to 'window dressing' at reporting time that bears no quantifiable relationship to actual investment strategy at work during other times. Potential participants who require detailed information about strategy or who believe that the composition of an actively managed portfolio at an arbitrary moment in time indicates anything about overall strategy should not participate in this fund and might instead consider passive funds with strictly fixed portfolios.

Q: Are you sheltering within a UK limited liability company so you're protected when all this turns out to be a scam?

A: Limited liability companies provide no protection whatsoever from criminal activity. Fraud is a crime, and those who commit financial fraud may face not just civil liability but criminal prosecution, imprisonment, and permanent barring from certain types of business activities, such as holding directorships. My company was formed in 2002 to provide a single umbrella for several different areas of business activity. This is efficient from an accounting perspective; nothing more, nothing less.

Q: Are you just going to invest in ASICMiner, put the rest in CoinLenders, sit back and call it good?

A: Dang, you got me. Yes, I can't think of any other way to generate worthwhile returns or manage risk, and now you've stolen my idea. Begone, foul fiend! If you believe this, you should not participate in this fund.

Q: Why should I care about risk instead of absolute returns? This is Bitcoin, after all, so I've accepted significant risk just by holding the currency in the first place!

A: It is trivially easy to boost potential returns by taking on additional risk. The extreme example is gambling — increasing the probability of suffering high levels of loss (or repeated low levels of loss) in exchange for a chance of hitting a high level of return. For investors, as distinct from gamblers, what really matters is risk-adjusted returns, or the level of return attained for a given level of risk. (That's why an entire cottage industry has put analysts to work evaluating skewness, kurtosis, Sharpe ratios and other measures to distinguish good investment management from bad.) So while it may be true that holding Bitcoins at all entails significant initial risk, total risk is determined by what you do with them once you have them, and whether you choose to gamble, invest, or do something in between will impact your probability of making outsized gains as well as your probability of experiencing outsized losses.

Q: Pop quiz: can you give me an investment opinion on EXAMPLE.CORP to prove you know anything about Bitcoin or Bitcoin related businesses?

A: No, I will not be offering any investment opinions or advice, nor entering into any attempts to prove anything to anyone — except for my identity, which I will be glad to do with the exchange or forum admins on request. I have provided a significant volume of information about the proposed fund, and I have provided further links to additional information about me, my views and my personal background. It is incumbent upon anyone considering participating to take the time to read and evaluate for themselves what I have already provided. If an individual finds the materials I have already provided to be lacking in some way, then they will have answered the central question: they should not participate in this fund.

Q: What's the deal with your company's address? Why did you recently move?

A: We didn't. The company recently changed its registered office from the founder's base of operations in Devon to the office of the company's accounting firm, Hackett Griffey LLP, in Suffolk. (The company's accounting firm is on the other side of the country because the company was originally set up when we lived in Suffolk and I worked at BT; moving ourselves across the country in 2003 was no reason to change accounting firms.) As a result, potential participants relying on less accurate third party commercial services rather than the official UK government database may still find the older Devon address listed. For potential participants who are unfamiliar with standard UK practice, the purpose of the registered office is to act as the primary contact point for the UK government's tax communications and other statutory communications, and therefore it is common for the registered office to match the office of the accounting provider.

Participants who would like to verify the company's details, its address history, or any other matters should consider using the official UK government agency Companies House:

Q: Why does your company's official government registration entry only show web publishing activities as its primary business activity?

A: The overall SIC code list is changed by the government periodically, and the individual codes for each company are updated once per year, but these are descriptive rather than prescriptive. If you check the history of the company, you will find that we have listed business consulting and other activities in the past, having updated codes to match whatever happened to represent the bulk of our business at the time of filing. Since we currently receive more revenue from web publishing activities than any other, that is what we've shown.

Q: You say you'll be participating in the fund, so exactly how much, and what is the URL for your publicly visible portfolio?

A: Exactly how I will participate has not yet been decided, and I will not be providing any private financial details for public viewing. While I appreciate that it is common for pseudonymous users to post URLs for publicly visible portfolios in an attempt to build trust in their pseudonym, I am not a pseudonym. Potential participants who consider it essential to have access to my private financial details should not participate in the fund.

Q: Do you intend to list on other exchanges? What about BitFunder?

A: We'd be happy to consider cross-listing on BitFunder, but we'd like to get the fund up and running via BTC-TC first. We have no plans to pursue a listing on MPEx.

Q: OK, I've read some of your stuff on other sites; what's up with your spelling?

A: Having lived in the UK for more than two decades, I normally write in British English, and that is what you'll find in most of my articles on other sites. However, since I anticipate writing more often about US markets than others on the Psychological Investor site, I have made an effort to return to US English for articles published there. Of course, most readers are intelligent enough to understand that British English is something different than simply Wrong American English, but Google is not so clever. Over the last couple of years, Google has bounced around wildly in terms of how it treats non-US spelling when returning results for US search terms. As a precaution against Google's ongoing tantrums over spelling, and Google's influence over who is allowed to find the site, I've tried to stick to US English, even though it no longer comes naturally.

Note: This document is copyright 2013 by Mulhauser Consulting Ltd., with all rights reserved, and may not be repurposed without written consent.

Executive Summary

Operating as a hedge fund-style service to the exchange, the BTC Growth fund aims to achieve capital growth denominated in Bitcoin.

The fund may invest in securities listed on Bitcoin-denominated exchanges, or in unlisted short-term debt of listed or unlisted businesses with demonstrable cashflow. It may construct strategies using derivatives intended to hedge risks associated with these investments or to generate returns in their own right. In exceptional circumstances, the fund may invest privately in unlisted businesses. The fund may provide capital to exchanges, and it may construct positions designed to extract value from volatility in the value of Bitcoin versus other currencies.

The fund's portfolio will be marked to market and its Net Asset Value published approximately once per month. Being exchange traded, no redemption notice is required, and the fund may provide additional redemption and subscription liquidity by placing bids or asks (respectively) at a level between NAV and open market prices.

The fund employs a 'two and twenty' fee structure common to the hedge fund industry, together with a rolling high-water mark tallied on a trailing three-month basis.

Potential participants for whom this full document is in any way 'TL;DR' should not participate in this fund.

Business Description

We have included this information directly in the section "Contract, or Shareholder Agreement".

Definition of the Market

This fund is intended solely for parrticipants who seek to grow their Bitcoin investments in Bitcoin terms, and who understand and accept the fund's strategy and risks as outlined in the section "Contract, or Shareholder Agreement".

Products and Services

The fund management service to the exchange is described in the section "Contract, or Shareholder Agreement".

Organization and Management

This fund will operate entirely as a service to the exchange provided by Mulhauser Consulting, Ltd. (The General Partner/Limited Partnership model common to traditional hedge funds, in which investors are Limited Partners, is neither desirable nor practical for a fund intended to trade freely on a Bitcoin-denominated exchange.) This United Kingdom company, registration number 4455464, was incorporated in June 2002 and has two controlling shareholders. In other areas of its business, the company works with a team including both volunteers and paid employees and consultants, but for the purposes of this service, fund management will be handled entirely by the company's founder and Managing Director, Dr Greg Mulhauser.

Please see the 'Your Details' section for more information on the company and the fund manager.

Marketing Strategy

While information about the fund will be made publicly available for informational purposes, at this time the fund issuer has no plans for active marketing of the service.

Financial Management

This section is not applicable, as we are providing a new fund management service to the exchange, rather than floating a new or existing business.

ʡ = Recent Notification or Pending Motion, ʬ = Recent Contract or Prospectus Change