loader blockarb image
hero image

BETH - Blockarb Ethereum Arbitrage Income Fund

Ethereum (ETH) is a leading blockchain platform known for its smart contract capabilities and a thriving ecosystem of decentralized applications. As the second-largest cryptocurrency by market capitalization, ETH is crucial for investors seeking exposure to the growing world of decentralized finance and blockchain innovation.


The BETH Fund is a specialized arbitrage strategy designed for investors looking to increase their Ethereum holdings. By leveraging market-neutral techniques, the fund aims to generate steady, Ethereum-denominated returns while mitigating the risks associated with market volatility. This approach allows investors to grow their ETH portfolio consistently while managing exposure to the fluctuating cryptocurrency market.

usdt icon

Distribution Rate:

30 days Yield:

BETH Retail
BETH Business
BETH Enterprise

Fund Facts

  • Fund Name Blockarb™ Ethereum Arbitrage Income Fund (BETH)
  • 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 250,000ETH
  • Denomination ETH
  • 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 Ethereum Arbitrage Income Fund operates under a Multi-Class or Tiered Sub-Fund Structure, offering a variety of sub-funds within a single investment framework, designed to cater to the diverse needs of Ethereum-focused investors. This flexible structure allows participants to select sub-funds that align with their capital allocation, risk appetite, and financial goals.


Each sub-fund within the BETH Fund features a tailored investment strategy, risk profile, and fee structure, ensuring that investors only pay for the specific services that meet their chosen objectives. Retail investors are provided with access to institutional-grade Ethereum trading tools and strategies, while institutional participants benefit from a liquid, retail-driven market, which enhances efficiency, reduces costs, and stabilizes operations.


This multi-class approach enables both retail and institutional investors to grow their Ethereum-denominated portfolios, maximizing returns while effectively managing risk in the dynamic digital asset market.

The BETH sub-funds include:

  • Retail Access (BETH.R): Designed for individual or retail investors, this sub-fund offers access to advanced trading tools and arbitrage strategies typically reserved for institutional players. The focus is on stable, consistent returns with low entry barriers, providing a growth avenue for smaller-scale investors looking to grow their Ethereum holdings without exposure to high market risk.

  • Business Access (BETH.B): Targeted at small to medium-sized businesses and more experienced investors, the Business Grade sub-fund offers enhanced risk-adjusted returns. This sub-fund applies more sophisticated strategies while maintaining liquidity, making it an ideal choice for those seeking a balance between risk and reward, with access to more dynamic arbitrage techniques.

  • Enterprise Access (BETH.E): Designed for large institutions and high-net-worth investors, the Enterprise Grade sub-fund offers the highest potential for yield among the BETH sub-funds. With access to exclusive strategies, higher capital deployment, and greater liquidity, this sub-fund is focused on maximizing Ethereum-based returns while maintaining a market-neutral stance, making it a robust choice for seasoned investors aiming for substantial long-term growth.

Benefits of the BETH Sub-Funds:

  • Tailored Risk-Reward Profiles: Each sub-fund offers a distinct risk and reward structure, allowing investors to choose based on their specific goals and risk tolerance.

  • Ethereum-Denominated Returns: All returns are generated and distributed in Ethereum, offering a way to grow ETH holdings irrespective of fiat currency fluctuations.

  • Market-Neutral Strategies: The sub-funds employ arbitrage techniques to capture value in volatile markets without being exposed to directional market risks, preserving capital while pursuing growth.

The BETH Sub-Funds are designed to offer a comprehensive range of Ethereum-based investment options, providing flexibility, security, and the potential for significant returns across varying levels of investment sophistication.

BETH.R (Retail) BETH.B (Business) BETH.E (Enterprise)
Fund Symbol BETH.R BETH.B BETH.E
Investment Strategies Exchange Arbitrage, Statistical Arbitrage Exchange Arbitrage, Statistical Arbitrage, Market Making Exchange Arbitrage, Statistical Arbitrage, Market Making, Delta-Neutral Trading
Minimum Subscription 0.3ETH 30ETH 300ETH
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 150,000 ETH 62,500 ETH 37,500 ETH
Performance Fees 5% 10% 15%

Subscription & Redemption

The BETH Ethereum Arbitrage Income Fund operates under a unique subscription model that allows investors to generate consistent yields using their Ethereum (ETH) assets. To participate in the fund, investors must first establish a dedicated personal fund interface, which acts as their gateway to the fund's sophisticated arbitrage systems.

How the Model Works:

  • Interface Creation: Investors start by creating their own personal fund interface, where they can manage their investments and access the fund’s systems.

  • Asset Deployment: After the interface is established, investors transfer the ETH they wish to deploy for yield generation into the personal BETH fund portal. This deployed ETH becomes the base capital for arbitrage activities.

  • Qualification and Integration: The personal interface qualifies for integration into the fund’s automated systems based on the amount of ETH subscribed and the strategies the investor qualifies for. These systems constantly scan digital asset markets, identifying price inefficiencies and executing arbitrage trades in real time.

  • Yield Generation: BETH's strategy is market-neutral, ensuring that the fund captures arbitrage opportunities regardless of market direction. This dynamic approach maximizes returns on the ETH deployed while mitigating exposure to market volatility.

Key Advantages of the BETH Subscription Model:

  • Direct Asset Control: Investors retain control over their ETH, which is actively deployed within the fund to generate yield through arbitrage strategies.

  • Efficient Yield Generation: Automated systems execute arbitrage trades in real time, ensuring that investor capital is utilized efficiently to generate consistent returns.

  • Transparency and Accessibility: The personal fund portal enables investors to track their ETH deployment and monitor the fund's performance, ensuring a transparent and straightforward investment experience.

Fund Participation and Performance Reporting

Participation in the BETH Fund is based on the capital subscribed by investors, not on a fixed number of shares. This structure allows investors to participate in the fund with flexible amounts, offering precise representation of their individual contributions.


Returns are calculated based on the capital subscribed at the time arbitrage opportunities are identified and executed by the fund’s systems. The chosen strategies through the investor's interface influence these returns, ensuring performance is directly linked to the arbitrage profits generated during successful trades. This dynamic model adjusts to capital inflows and outflows, ensuring fair and transparent participation for all investors.

Subscription Redemption

  • Investors maintain full control over their subscription capital. They can withdraw their initial ETH investment at any time and transfer it to their private wallets or digital asset exchanges for conversion to local currency, providing flexibility and immediate access to their capital.

Profit Redemption

  • Profit redemption occurs at regular 30-day intervals. Investors can withdraw the profits generated by the fund during this period, subject to a performance fee, which is charged only on profits. This fee aligns the fund’s costs with its performance, ensuring a performance-based expense model.

  • If an investor wishes to redeem profits before the 30-day interval ends, they incur a double performance fee. This compensates for the additional costs related to portfolio rebalancing and ensures the fund can continue operating efficiently without disruption to its investment strategies.

  • By offering both flexibility and transparency, the BETH Fund's subscription and redemption model is designed to meet the needs of investors looking for consistent, Ethereum-denominated returns while maintaining full control over their capital.

Fees Structure

The BETH Fund implements a clear and transparent fee structure that aligns investor returns with the fund’s performance. Below are the primary fee components:

Management Fees:

The BETH Fund does not charge any fixed management or expense ratio on the capital subscribed. Instead, operational expenses, platform upkeep, and strategy execution costs are fully covered through the performance-based fee structure. This ensures that 100% of investors' capital is deployed for yield generation, and fees are only applied to profits, aligning the fund's goals with those of its investors.

Performance Fees:

Performance fees are charged exclusively on the profits generated by the fund, ensuring that the fund managers are motivated to maximize returns. These fees differ depending on the sub-fund (Retail Access, Business Grade, or Enterprise Grade) and are applied as a percentage of the profits earned.

  • Standard Performance Fee Rate: Charged on profits at regular intervals, typically every 30 days.

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

Redemption Fees:

There are no fees charged for the redemption of subscription capital, meaning investors can withdraw their initial capital without penalty. However, early withdrawals of profits before the 30-day period will incur a higher performance fee, as noted in the profit redemption section.


By directly linking fees to performance, the BETH Fund fosters an environment where both the investors and fund managers benefit. This fee structure ensures that the fund is incentivized to generate strong returns, creating a win-win situation where fees are applied fairly and proportionally to the profits achieved.

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

NAV erosion refers to the decline in a fund's Net Asset Value (NAV), which can adversely affect the value of each investor's share and ultimately reduce long-term returns. In the context of Ethereum arbitrage trading, several factors can contribute to NAV erosion, including high transaction costs, slippage, latency in execution, liquidity issues, regulatory risks, market volatility, counterparty risks, smart contract vulnerabilities, and inefficient futures management.

Key Problems Leading to NAV Erosion:

  • High Transaction Costs: Excessive fees associated with trading can diminish returns and negatively impact NAV.

  • Slippage: The difference between the expected price of a trade and the actual price can lead to decreased profits.

  • Latency and Execution Delays: Delays in trade execution can result in missed arbitrage opportunities, affecting profitability.

  • Liquidity Issues: Difficulty in liquidating positions at favorable prices can erode NAV during market downturns.

  • Regulatory and Legal Risks: Uncertainty in regulatory environments can pose risks to the fund's operations.

  • Market Volatility: Fluctuations in Ethereum prices can affect the value of assets held within the fund.

  • Counterparty Risks: The risk associated with the failure of exchanges or other entities involved in transactions can lead to losses.

  • Smart Contract Vulnerabilities: Flaws in smart contracts can expose the fund to potential exploits.

  • Futures Roll Costs: Rolling futures contracts can incur costs that gradually erode NAV.

  • Exchange Risks: Disruptions or outages on trading platforms can impede trade execution.

Solutions for Protecting Against NAV Erosion:

  • Managing High Transaction Costs:
    Optimized Gas Usage: The BETH Fund implements smart routing systems to minimize gas fees by executing trades during low network congestion and utilizing Layer 2 solutions to reduce costs.
    Fee Optimization Strategies: Negotiating reduced fees with exchanges based on trading volumes and leveraging DEXs that offer fee rebates.

  • Preventing Slippage:
    Advanced Execution Algorithms: Employing trading algorithms that split orders across multiple exchanges to minimize slippage.
    Automated Trading Systems: Using automated arbitrage bots to detect and act on price inefficiencies instantly.

  • Mitigating Latency and Execution Delays:
    Low-Latency Infrastructure: Maintaining high-speed execution infrastructure for rapid order processing across exchanges.
    Fee Optimization Strategies: Negotiating reduced fees with exchanges based on trading volumes and leveraging DEXs that offer fee rebates.

  • Addressing Liquidity Issues:
    Diversification Across Exchanges: Trading on multiple platforms to tap into a broader pool of liquidity.
    Liquidity Management Tools: Analyzing real-time liquidity to ensure efficient trade execution without impacting market prices.

  • Navigating Regulatory and Legal Risks:
    Jurisdictional Diversification: Operating across multiple jurisdictions to reduce regulatory exposure and enhance compliance.
    Automated Compliance Systems: Implementing automated solutions to swiftly adapt to regulatory changes.

  • Protecting Against Market Volatility:
    Hedging Strategies: Employing hedging techniques, such as holding stablecoins or options contracts, to mitigate downside risks.
    Diversified Arbitrage Approaches: Implementing a variety of arbitrage strategies to minimize reliance on any single price discrepancy.

  • Mitigating Counterparty Risks:
    Reputable Exchange Partnerships: Trading exclusively on established exchanges and utilizing decentralized platforms with audited smart contracts.
    Risk Allocation Strategies: Diversifying assets across multiple exchanges to limit exposure to any single platform’s risks

  • Smart Contract Risk Management:
    Rigorous Smart Contract Audits: Engaging in thorough audits of smart contracts to ensure security and mitigate vulnerabilities.
    Decentralized Insurance Products: Utilizing insurance protocols to provide coverage against potential exploits.

  • Minimizing Futures Roll Costs:
    Active Futures Management: Employing dynamic rolling strategies to optimize timing and minimize costs associated with futures contracts.
    Exploration of Alternative Derivatives: Investigating other derivative products that do not require constant contract rolling.

  • Addressing Exchange Risks:
    Multi-Exchange Strategy: Maintaining accounts on various exchanges to ensure liquidity access during outages.
    Automated Fail-Safe Systems: Implementing systems that cancel or pause trades during technical issues to prevent potential losses.

  • Strengthening Risk Management:
    Real-Time Risk Monitoring: Utilizing continuous risk management systems to monitor exposure and liquidity for automatic adjustments to strategies.
    Regular Stress Testing: Conducting stress tests under extreme market conditions to identify vulnerabilities and refine risk controls.

By addressing these potential problems through robust solutions, the Digitrage BETH Fund effectively protects against NAV erosion, safeguarding investor capital and enhancing the sustainability of returns over time.

Performance

2023 Monthly Performance Breakdown: BETH.R, BETH.B, and BETH.E
Month BETH.R Return (%) BETH.B Return (%) BETH.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

BETH Fiat adjusted returns

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

Month ETH Price Monthly Change (%) BETH.R Fiat Adjusted Return (%) BETH.B Fiat Adjusted Return (%) BETH.E Fiat Adjusted Return (%)
January 32.70 35.31 37.30 37.64
February 1.14 3.19 4.73 6.24
March 13.50 15.52 17.38 18.32
April 3.25 5.33 6.45 8.53
May -0.17 1.85 3.41 4.13
June 3.11 5.13 6.63 7.81
July -3.96 -2.00 -0.58 1.44
August -11.30 -9.89 -8.63 -6.70
September 1.49 3.57 5.13 6.99
October 8.61 10.73 12.47 13.51
November 13.1 15.43 17.04 18.10
December 11.10 13.03 14.89 16.2
Total 43.8 97.2 116.22 132.21

Investment Risk Disclosure

Investment Risks

The BETH Fund utilizes sophisticated arbitrage strategies to provide ETH-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 BETH 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 BETH 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 BETH 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 BETH 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 BETH Fund.

Disclosures

  • Investment Suitability: The BETH 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 BETH Fund allows monthly redemptions at NAV. However, in periods of market stress, liquidity may be temporarily limited.

By investing in the BETH 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.