BITC

About BITC

The Fund seeks to achieve its investment objectivethrough managed exposure to bitcoin futures contracts (“Bitcoin Futures Contracts”) and investments in U.S. Treasury securities.Under normal market conditions, the Fund will invest at least 80% of its assets in Bitcoin Futures Contracts and U.S. Treasury securities.For purposes of compliance with this investment policy, derivative contracts (such as Bitcoin Futures Contracts) will be valued at theirnotional value. The Fund does not invest directly in bitcoin. Bitwise Investment Manager, LLC serves as the Fund’sinvestment adviser (“BIM” or the “Adviser”) and Vident Advisory, LLC serves as the Fund’s investment sub-adviser(“Vident” or the “Sub-Adviser”). The Fund utilizes a “long-flat” trend-followinginvesting strategy pursuant to which the Adviser rotates the Fund’s exposure between 100% exposure to Bitcoin Futures Contractsand 100% exposure to U.S. Treasury securities. A long-flat strategy, like the one utilized by the Fund, takes a long position when a trendis detected, seeking to take advantage of an anticipated increase in an asset’s value. However, when a downward trend is detected,instead of shorting the downtrend, the strategy exits the position and remains in cash or cash equivalents. The Fund’s strategyis based upon a proprietary signal that is based upon an observation and comparison of bitcoin’s 10-day and 20-day exponential movingaverage price. An exponential moving average applies a weighting factor to each price point, giving exponentially more weight to recentdata, making it a useful tool for identifying trends as it is more responsive to new price changes and trends. This signal is completelyquantitative in nature and is based solely on the price movement of bitcoin. The trend-following strategy utilized by the Fund seeks toenhance risk-adjusted returns and decrease the downside risk associated with investments in bitcoin-linked instruments, such as BitcoinFutures Contracts. Due to the nature of the Fund’s trend-following investment strategy, there will be periods – and perhapsextended periods – when the Fund has no exposure to Bitcoin Futures Contracts, as the entirety of its assets will be invested inU.S. Treasury securities. Even during periods when the Fund has 100% notionalexposure to Bitcoin Futures Contracts, it will still invest up to 75% of its remaining assets in U.S. Treasuries, other U.S. governmentobligations, money market funds, cash and cashlike equivalents (e.g., high quality commercial paper and similar instruments thatare rated investment grade or, if unrated, of comparable quality, as the Adviser determines) to provide liquidity, serve as margin orcollateralize the Fund’s investments in Bitcoin Futures Contracts. Due to the high margin requirements that are unique to BitcoinFutures Contracts and certain tests that must be met in order to qualify as a regulated investment company (“RIC”), the Fundmay also utilize reverse repurchase agreements during certain times of the year to help maintain the desired level of exposure to BitcoinFutures Contracts. The use of reverse repurchase agreements constitutes a form of borrowing. During periods when the Fund has 100% notionalexposure to Bitcoin Futures Contracts, the Fund may enter into swap agreements that provide exposure to bitcoin or Bitcoin Futures Contracts.Swap agreements are derivative contracts entered into primarily with major global financial institutions for a specified period rangingfrom a day to more than one year. In a typical swap transaction, two parties agree to exchange, or “swap”, payments basedon the change in value of an underlying asset or benchmark. For example, two parties may agree to exchange the return (or differentialsin rates of returns) earned or realized on a particular investment or instrument. It is currently contemplated that the Fund would primarilyutilize swap agreements to provide exposure to movements occurring in the price of bitcoin during times when Bitcoin Futures Contractsare not trading (such as over the weekend). However, the Fund may utilize such swap agreements under other circumstances as well, suchas if the Fund is not able to obtain exposure to Bitcoin Futures Contracts. To the extent the Fund utilizes swap agreements, such instrumentswill be cash-settled uncleared and non-exchange traded. Additional Information Relating to BitcoinFutures Contracts When the Fund has exposure to Bitcoin FuturesContracts, the Fund generally seeks to invest in cash-settled, front-month Bitcoin Futures Contracts. The Fund may also invest in back-month,cash-settled Bitcoin Futures Contracts. Front-month Bitcoin Futures Contracts are those contracts with the shortest time to maturity.Back-month Bitcoin Futures Contracts are those with longer times to maturity. Bitcoin Futures Contracts are standardized,cash-settled futures contracts traded on commodity exchanges registered with the CFTC that use bitcoin as the reference asset. In general,a futures contract is a legal agreement to buy or sell a standardized asset on a specific date or during a specific month that is facilitatedthrough a futures exchange. When a futures contract reaches its expiration, the holder of a futures contract (such as the Fund) mustsell that futures contract and replace them with new futures contracts with a later expiration date. This is called “rolling.”Bitcoin Futures Contracts are cash settled on their expiration date, unless they are “rolled” prior to expiration. The Fundintends to “roll” its futures positions in the week prior to expiration and will typically roll to the next available contract(i.e., the contract with the next upcoming expiration date). However, the Fund is not required to roll the contracts at any specifictime and the Adviser may roll the contracts at any time of its choosing, depending upon prevailing market conditions and other factors.The Fund’s regular purchases and sales of individual Bitcoin Futures Contracts throughout the year may cause the Fund to experiencehigher than normal portfolio turnover. Before a Bitcoin Futures Contract’s expiration,it may trade at a value that is higher or lower than the spot price of bitcoin. When a Bitcoin Futures Contract is trading at a pricethat is greater than the spot price of bitcoin, the market is said to be in “contango.” If the Bitcoin Futures Contract istrading at a price that is lower than the spot price of bitcoin, the market is said to be in “backwardation.” As the timeto expiry of the Bitcoin Futures Contract decreases, the price will trend towards the spot price of bitcoin. When a Bitcoin Futures Contractis in contango, this will cause the return of the contract to underperform the spot price of bitcoin. When a Bitcoin Futures Contractis in backwardation, this will cause the return of the contract to overperform the spot price of bitcoin. The performance of Bitcoin FuturesContracts and bitcoin may not be precisely correlated, over short or long periods of time. To the extent the Fund has investments in back-monthBitcoin Futures Contracts, the Fund’s performance can be expected to be less correlated with the price of bitcoin than if it heldfront-month Bitcoin Futures Contracts. The Fund invests in Bitcoin Futures Contractsprimarily through a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands (the “Subsidiary”).The Fund’s investment in the Subsidiary is intended to provide the Fund with exposure to the Bitcoin Futures Contracts marketsin accordance with applicable rules and regulations. The Subsidiary and the Fund have the same investment adviser and investment objective.The Subsidiary also follows the same general investment policies and restrictions as the Fund. Except as noted herein, for purposes ofthis Prospectus, references to the Fund’s investment strategies and risks include those of the Subsidiary. The Fund complies withthe provisions of the 1940 Act governing investment policies and capital structure and leverage on an aggregate basis with the Subsidiary.Furthermore, Bitwise Investment Manager, LLC, as the investment adviser to the Subsidiary, complies with the provisions of the 1940 Actrelating to investment advisory contracts as it relates to its advisory agreement with the Subsidiary. The Subsidiary also complies withthe provisions of the 1940 Act relating to affiliated transactions and custody. Because the Fund intends to qualify for treatment asa regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”),the size of the Fund’s investment in the Subsidiary will not exceed 25% of the Fund’s total assets at each quarter end ofthe Fund’s fiscal year. The Fund is classified as “non-diversified”under the Investment Company Act of 1940 (the “1940 Act”), which means it has the ability to invest a relatively high percentageof its assets in financial instruments with a single counterparty or a few counterparties.