•   A decline in the adoption of bitcoin could have a negative effect on the price of bitcoin and bitcoin-related investments. Bitcoin’s adoption has been on a generally continuous climb since bitcoin first gained mass media attention in 2013. However, there can be no guarantees this growth will continue. Further, adoption of bitcoin as a means of payment has been limited when compared with the increase in the price of bitcoin, indicating that the majority of bitcoin’s use is for investment and speculative purposes. A lack of acceptance of bitcoin as a means of payment could negatively impact the price of the Bitcoin Futures contracts in which the Fund invests.
A Bitcoin (spot or futures) exchange (like any online trading firm) charges its clients a fee to carry out trading activities. As exchanges face the risk of hacking and theft, it is wise not to trust an exchange with all your coins. You should split and keep part of them in other devices or cold storage. Now with bitcoin futures being offered by some of the most prominent marketplaces, investors, traders and speculators are all bound to benefit. These centralized marketplaces will facilitate trade based on a trader’s outlook for bitcoin prices, gain exposure to bitcoin prices or hedge their existing bitcoin positions. Overall, the launching of bitcoin futures by Cboe and CME will facilitate price discovery and price transparency, enable risk-management via a regulated bitcoin product and give a further push to bitcoin as an accepted asset class. (For more, see: The Risks Of Buying Bitcoins.)
Bitcoin relies on blockchain technology. “Blockchain” is a decentralized database. Transactions are grouped in blocks and then chained together through cryptographic links. Blockchain is designed so that the chain can be added to, but not edited. This structure is called a “distributed ledger.” Transactions in the distributed ledger are permanently recorded and can never disappear, although theft and loss of bitcoin can occur. While bitcoin has grown in popularity, it’s still not nearly as widely accepted as traditional currency.
For purposes of this SAI, the word “invest” refers to a Fund directly and indirectly investing in securities or other instruments. Similarly, when used in this SAI, the word “investment” refers to a Fund’s direct and indirect investments in securities and other instruments. For example, the Funds typically invest indirectly in securities or instruments by using financial instruments with economic exposure similar to those securities or instruments.
  •   A decline in the adoption of bitcoin could have a negative effect on the price of bitcoin and bitcoin-related investments. Bitcoin’s adoption has been on a generally continuous climb since bitcoin first gained mass media attention in 2013. However, there can be no guarantees this growth will continue. Further, adoption of bitcoin as a means of payment has been limited when compared with the increase in the price of bitcoin, indicating that the majority of bitcoin’s use is for investment and speculative purposes. A lack of acceptance of bitcoin as a means of payment could negatively impact the price of the Bitcoin Futures contracts in which the Fund invests.
When a new crypto is launched, its founders announce how many coins will be mined. Once the quota is reached, no further coins can be produced. The first digital coin introduced was Bitcoin, which remains today the benchmark for all other digital coins. Among other currencies that have made their way into the cryptocurrency hall-of-fame we have: Ethereum, Ripple, Litecoin, EOS, and a number of derived currencies, including Bitcoin Cash and Bitcoin Gold.
  •   Large-Cap Company Investment Risk —The Fund invests in stocks of large-cap companies. Although returns on investments in large-cap companies are often perceived as being less volatile than the returns of companies with smaller market capitalizations, the return on large-cap securities could trail the returns on investments in smaller and mid-sized companies for a number of reasons. For example, large-cap companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies.
Bitcoin and other cryptocurrencies have evolved from a playful experiment among technical experts to an established and growing branch of the global financial industry. This means that the times in which cryptocurrency traders and investors only concerned themselves with straightforward buying and selling are over. Derivatives are now entering the picture.
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