The Fund’s objective is to achieve absolute returns for investors during and over a long-term time period, to achieve consistent returns irrespective of the prevailing market conditions, with such returns being independent of and uncorrelated to traditional forms of securities investments. There can be no assurance that the Fund will achieve its investment objectives.
The Fund operates a digital asset and derivative strategy that provides investors with exposure to the top digital currency assets, Bitcoin “BTC” and Ethereum “ETH,” representing over 70% of the digital currency coin market cap.
The Fund holds assets in both Bitcoin and Ethereum, understanding that these respective coins’ scarcity and technological dominance can generate significant upside returns as they experience continued adoption from both institutional and retail investors.
While digital currencies have outperformed traditional asset classes like equities, bonds, and metals, over the last 1, 5, and 10 years, the volatility risk that these digital assets incur has kept many investors from widescale adoption.
Two Prime offers a solution to manage volatility by implementing a derivative overlay strategy on the portfolio, providing downside volatility protection via covered calls and financed puts.
Additionally, the fund maintains a percentage of the portfolio in an interest-bearing crypto account that returns ~8% APR for those assets. The combined assets of the interest-bearing assets and the derivative overlay strategies create the fund’s total return, which is rebalanced quarterly to achieve an optimized risk profile for investors.
The Fund maintains net long exposure to both digital currencies and uses our derivative overlay strategy to materially reduce volatility, protect against tail risk events, and generate consistent annual returns for investors.
The fund can offer a hedge for currency and inflation risk and also serves as a high growth offering with risk-managed downside and active rebalancing for a diversity of investor types.