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BBTC - Blockarb BTC Arbitrage Income Fund

Bitcoin (BTC) is a decentralized digital currency that has gained prominence as both a store of value and a hedge against traditional financial market instability. Its finite supply and widespread acceptance have made it a valuable asset for investors seeking long-term growth and protection against inflation.


The BBTC Fund is a sophisticated arbitrage strategy tailored for investors looking to expand their Bitcoin holdings. By employing market-neutral techniques, the fund generates consistent, Bitcoin-denominated returns while minimizing exposure to the inherent volatility of the cryptocurrency market. This approach provides investors with a reliable way to grow their BTC portfolio while managing risk effectively.

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Distribution Rate:

30 days Yield:

BBTC Retail
BBTC Business
BBTC Enterprise

Fund Facts

  • Fund Name Blockarb™ BTC Arbitrage Income Fund (BBTC)
  • Launch Date 7/05/2015
  • Fund Strategy Open-ended, arbitrage-driven digital asset income strategy
  • Investment Focus Stable yield generation through market-neutral arbitrage strategies
  • Total Asset 10,500BTC
  • Denomination BTC
  • Expense Ratio 0.00001%
  • Liquidity Monthly
  • Risk Management Comprehensive risk mitigation through market-neutral strategies
  • Performance Reporting Quarterly reports on performance, allocation, and market analysis
  • Investment Term Recommended for short to medium -term holding (1 month or longer)

Documents & Downloads

Prospectus download

Fund Structure

The Blockarb Bitcoin Arbitrage Income Fund operates under a Multi-Class or Tiered Sub-Fund Structure, offering multiple sub-funds within a single investment vehicle, each designed to meet diverse investor needs. This structure provides flexibility, allowing investors to choose sub-funds based on their capital, experience, and financial goals.


Each sub-fund has a unique investment strategy, risk profile, and fee structure, ensuring investors only pay for the services that match their chosen path. Retail investors gain access to institutional-grade trading tools and strategies, while institutional investors benefit from a liquid, retail-driven market that enhances efficiency, reduces costs, and improves stability.

The BBTC sub-funds include:

  • Retail Access (BBTC.R): The BBTC Retail Access Sub-Fund is designed specifically for individual investors seeking to participate in Bitcoin arbitrage strategies with an accessible entry point. Focused on market-neutral tactics, such as exchange arbitrage and statistical arbitrage, this sub-fund offers stable, consistent returns regardless of Bitcoin market conditions. With low volatility and minimal risk exposure, it provides a reliable income stream, making it an ideal option for retail investors looking to capitalize on Bitcoin's price inefficiencies while avoiding the direct risks of price fluctuations.

  • Business Access (BBTC.B): The BBTC Business Access Sub-Fund (BBTC.B) is tailored for small to medium-sized businesses and sophisticated investors who have exposure to Bitcoin and seek to generate BTC-denominated profits. This sub-fund leverages multiple arbitrage strategies, such as exchange, statistical arbitrage and market-making arbitrage , to capitalize on market inefficiencies, providing higher returns than retail-focused funds. Monthly BTC-denominated distributions and performance-based fees ensure that profits align with each investor's commitment, making it an ideal choice for those seeking growth and low-volatility strategies within the Bitcoin market.

  • Enterprise Access (BBTC.E): Enterprise Access (BBTC.E) is designed for large enterprises and institutional investors seeking high returns through advanced arbitrage strategies in the Bitcoin market. This sub-fund capitalizes on large-scale market inefficiencies using sophisticated trading techniques like exchange arbitrage, market-making, and delta-neutral trading. With a higher minimum investment, BBTC.E offers institutional-grade infrastructure, ensuring enhanced profitability and risk management. Investors benefit from consistent high returns, market-neutral positioning, and exposure to advanced Bitcoin trading strategies while maintaining low volatility.
BBTC.R (Retail) BBTC.B (Business) BBTC.E (Enterprise)
Fund Symbol BBTC.R BBTC.B BBTC.E
Investment Strategies Exchange Arbitrage, Statistical Arbitrage Exchange Arbitrage, Statistical Arbitrage, Market Making Exchange Arbitrage, Statistical Arbitrage, Market Making, Delta-Neutral Trading
Minimum Subscription 0.02BTC 2BTC 15BTC
Distribution Rate 24% 42% 60%
30-Day Yield 2% 3.5% 5%
Distribution Frequency Every 30 days Every 30 days Every 30 days
Expected Return Stable, low-risk returns with minimal volatility Medium-complexity, higher-than-average yield High-complexity, high-return strategy
Total Assets 3000 BTC 5000 BTC 2500 BTC
Performance Fees 5% 10% 15%

Subscription & Redemption

Subscription Model for the Fund The BBTC Enterprise Access Fund operates under a specialized subscription model designed to leverage Bitcoin (BTC) assets for consistent yield generation through advanced arbitrage strategies. To participate in the fund, investors must first create a personal fund interface, which grants access to the fund's sophisticated arbitrage systems.

How the Model Works:

  • Interface Creation: Investors start by creating a dedicated personal fund interface, which serves as the gateway to manage their investments and access the fund's arbitrage systems.

  • Asset Deployment: After setting up the interface, investors transfer the amount of BTC they intend to deploy into their personal fund portal. This BTC will be used to generate yield through the fund’s trading strategies.

  • Qualification and Integration: Once the BTC is deployed, the personal fund interface qualifies for integration into the fund’s automated systems based on the subscription amount. The chosen strategy suite depends on the capital subscribed, allowing the system to monitor digital asset markets for arbitrage opportunities.

  • Yield Generation: The BBTC Fund’s systems continuously track market inefficiencies, executing arbitrage trades as opportunities arise. This dynamic approach maximizes profit while maintaining a market-neutral strategy.

Key Advantages of the BBTC Subscription Model:

  • Direct Asset Control: Investors retain full control of their BTC, while also enabling its active deployment within the fund.

  • Efficient Yield Generation: The automated systems swiftly execute arbitrage trades, ensuring efficient utilization of capital.

  • Transparency and Accessibility: Investors can easily monitor their BTC deployment and track the performance of their investments through the personal fund interface.

Fund Participation and Performance Reporting

The BBTC Fund uses a participation model based on capital subscribed, not a fixed number of shares. Each investor’s contribution is measured in monetary value, providing a precise and flexible representation of their stake in the fund.


Performance is calculated based on the BTC available in the investor’s account when the fund’s systems execute arbitrage opportunities. The specific strategy suite selected via the investor's interface influences returns. Profits are distributed proportionately based on the success of the arbitrage trades and the fund’s internal parameters.


This dynamic participation model adjusts seamlessly to capital inflows and outflows, ensuring all investors benefit equitably while maintaining transparency in reporting.

Subscription Redemption

  • Investors maintain full control over their subscription capital (BTC), allowing them to withdraw their initial investment at any time, transferring it back to their private wallets or digital exchanges. This ensures flexibility in capital access.

Profit Redemption

  • Profit Redemption Profits are redeemed at 30-day intervals, with a performance fee charged only on profits generated by the fund. Investors who wish to withdraw profits before the 30-day cycle will incur double the standard performance fee to account for the fund's rebalancing needs, ensuring smooth operation and efficiency in the arbitrage process.

  • This structure aligns investor goals with the fund’s performance while ensuring efficient management of the fund’s operations.

Fees Structure

The digitrage Fund implements a transparent fee structure designed to align with investor returns and the fund’s performance. Below are the primary fee components:

Management Fees:

The BBTC Fund does not charge any expense ratio on the subscription amount. Instead, all operational costs, platform maintenance, and strategy implementation expenses are covered through the fund’s performance-based fee structure. This ensures that investors’ capital is fully deployed for yield generation, with fees only applied to profits earned, aligning the fund’s interests with those of its investors.

Performance Fees:

The performance fee is only charged on profits generated by the fund and is designed to ensure that the fund managers are incentivized to maximize returns for investors. This fee varies depending on the sub-fund (Retail Access, Business Access, or Enterprise Access) and is charged as a percentage of the profit earned.

  • Standard Performance Fee Rate: Applied to profits at regular intervals (usually at 30-day periods).

  • Early Withdrawal Fee: If profits are withdrawn before the 30-day cycle, an early redemption fee is imposed, which doubles the standard performance fee. This fee compensates for the added costs of spontaneous rebalancing required by the fund.

Redemption Fees:

No fees are charged for subscription redemptions, meaning investors can withdraw their initial capital without penalty. However, as mentioned in the profit redemption section, a higher performance fee applies to early profit withdrawals before the 30-day period.

Sub-Fund Name Management Fee Standard Performance Fee Early Withdrawal Fee
Retail Access 0.00001% 5% 10%
Business Access 0.0001% 10% 20%
Enterprise Access 0.001% 15% 30%

NAV Erosion Prevention

What is NAV Erosion? NAV erosion refers to the decline in a fund's Net Asset Value (NAV), which measures the value of its assets minus liabilities. When NAV erodes, it reduces the value of each investor's share, negatively impacting long-term returns. Causes of NAV erosion include high fees, market losses, and inefficient management strategies.

Causes of NAV Erosion:

  • High Fees: Excessive management or performance fees eat into returns, reducing NAV over time.

  • Return of Capital: Some funds return the original capital as dividends, lowering NAV.

  • Market Losses: Decreased asset values affect NAV, particularly during volatile market conditions.

  • Futures Roll Costs (Contango/Backwardation): In futures-based strategies, rolling contracts in contango can slowly erode NAV.

  • Liquidity Issues: Struggling to liquidate assets at favorable prices may contribute to NAV degradation.

How Blockarb Mitigates NAV Erosion:

  • Market-Neutral Arbitrage: Blockarb employs market-neutral arbitrage strategies that don't depend on market direction, reducing exposure to volatility and preventing losses from market fluctuations that typically lead to NAV erosion.

  • Low Fees and Performance-Based Charges: Blockarb's fee structure is performance-based, meaning fees are charged only on profits rather than assets, avoiding a constant drag on NAV. Additionally, management fees are kept minimal, ensuring costs don’t erode NAV unnecessarily.

  • Efficient Capital Deployment: The fund actively deploys investor capital to exploit arbitrage opportunities in highly liquid digital asset markets, minimizing the risk of idle capital and inefficiency. This keeps investor assets working, protecting against value erosion.

  • Dynamic Rebalancing: Blockarb’s automated systems continually monitor and adjust positions to respond quickly to market shifts, mitigating risks that could lead to losses. Early withdrawal fees help stabilize the portfolio and prevent destabilization caused by unexpected outflows.

  • No Return of Capital: Blockarb avoids NAV erosion by not returning the original capital as dividends. Instead, all payouts come from genuine profits earned through arbitrage activities, maintaining the integrity of the fund’s NAV over time.

Performance

2023 Monthly Performance Breakdown: BBTC.R, BBTC.B, and BBTC.E
Month BBTC.R Return (%) BBTC.B Return (%) BBTC.E Return (%)
January 1.97 3.47 4.94
February 2.03 3.55 5.10
March 1.78 3.42 4.82
April 2.01 3.10 5.28
May 2.02 3.59 4.30
June 1.96 3.41 4.70
July 2.04 3.52 5.40
August 1.59 3.01 4.60
September 2.05 3.59 5.50
October 1.95 3.55 4.90
November 2.06 3.48 5.00
December 1.74 3.41 5.10
Total 23.20 41.10 59.64

BBTC Fiat adjusted returns

The fiat-adjusted returns of the BBTC Fund provide a clearer view of the fund's performance by accounting for fluctuations in Bitcoin’s price relative to fiat currencies. This helps investors understand how their Bitcoin-denominated returns translate into real-world purchasing power.

Month BTC Price Monthly Change (%) BBTC.R Fiat Adjusted Return (%) BBTC.B Fiat Adjusted Return (%) BBTC.E Fiat Adjusted Return (%)
January 39.83 41.80 44.68 47.65
February 0.04 2.07 3.55 5.14
March 23.01 24.79 27.22 28.78
April 2.79 4.80 5.98 8.32
May -6.87 -4.85 -3.53 -2.39
June 11.97 13.93 15.79 17.46
July -4.08 -2.04 -0.7 1.08
August -14.90 -13.31 -12.34 -10.03
September 3.99 6.04 7.72 9.74
October 28.55 30.50 33.11 34.6
November 8.82 10.88 12.61 14.26
December 21.78 23.52 25.93 17.79
Total 114.93 138.13 160.02 180.15

Investment Risk Disclosure

Investment Risks

The BBTC Fund utilizes sophisticated arbitrage strategies to provide BTC-denominated returns while minimizing directional market exposure. However, as with any investment, the fund carries certain risks that potential investors should understand before committing capital. Below are the primary risks associated with investing in the fund:

  • Market Risk: Despite the use of market-neutral strategies, the BBTC Fund remains exposed to broader market risks. Arbitrage techniques aim to limit exposure to BTC price movements, but systemic risks across global cryptocurrency markets, such as exchange outages, liquidity crises, or regulatory changes, may still impact performance.

  • Liquidity Risk: The BBTC Fund trades across multiple cryptocurrency exchanges. While arbitrage strategies prioritize liquid markets, certain market conditions could reduce liquidity, making it difficult to execute trades or withdraw funds quickly.

  • Counterparty Risk:Engaging in trading across various cryptocurrency exchanges introduces counterparty risk. If an exchange suffers a breach, insolvency, or operational failure, the fund could experience losses.

  • Operational Risk: The fund relies on various technologies, platforms, and systems for trade execution and risk management. Any system failure, cybersecurity breach, or operational issue could disrupt fund performance and expose investors to losses.

  • Regulatory Risk: The cryptocurrency market is subject to evolving regulations in different jurisdictions. Changes in laws governing cryptocurrency trading, taxes, or exchange regulations could affect the fund’s operations, performance, and profitability.

  • Operational Risk: The BBTC Fund relies on technological infrastructure such as trading algorithms, market data feeds, and exchange APIs. Technical failures, cybersecurity breaches, or human errors could lead to trading losses or operational disruptions.

  • Leverage Risk: The BBTC Fund may use leverage to enhance returns. While leverage can amplify gains, it also increases the potential for losses, particularly during periods of market stress or heightened volatility.

  • Cryptocurrency-Specific Risks: Bitcoin and other digital assets are relatively new financial instruments, and their market behavior can be unpredictable. Factors such as hard forks, protocol changes, or shifts in public sentiment may introduce risks specific to digital assets.

  • Taxation Risk: The tax treatment of cryptocurrency investments can vary across jurisdictions and is subject to change. Variations in tax laws could affect the after-tax returns of the BBTC Fund.

Disclosures

  • Investment Suitability: The BBTC Fund is intended for investors who understand the risks associated with digital assets and are willing to accept the potential for loss in exchange for BTC-denominated returns.

  • Past Performance: Historical performance of the fund is not indicative of future results. Cryptocurrency markets can be unpredictable, and returns may vary.

  • No Guaranteed Returns: While the fund seeks to generate consistent returns through arbitrage strategies, there is no guarantee that the fund will achieve its performance objectives.

  • Limited Liquidity: The BBTC Fund allows monthly redemptions at NAV. However, in periods of market stress, liquidity may be temporarily limited.

By investing in the BBTC Fund, investors acknowledge and accept these risks, understanding that while the fund seeks to minimize exposure to volatility, losses may still occur.

Importance Notice

This document is intended for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy shares of the Blockarb™ USDT Arbitrage Income Fund. Prospective investors should review the fund's full prospectus and consult with a financial advisor before making any investment decision.