Crypto Money Fund Dollar Hedge II

Structured Bitcoin Income Strategy

Manager: Nicholas Levenstein & Company

Strategy Focus: Risk-managed income from Bitcoin volatility

Instruments: Bitcoin spot, futures, and options

What the Fund Does (In Simple Terms)

The fund is designed to generate income from Bitcoin markets without relying on directional price bets. Instead of speculating on whether Bitcoin goes up or down, the strategy focuses on harvesting yield from market structure and volatility.

You can think of it as owning Bitcoin and renting it out through derivatives.

How Returns Are Generated

The strategy has two primary income engines:

1. Futures Carry (Contango Yield)

When Bitcoin futures trade above the spot price, the fund buys Bitcoin and sells futures contracts at a premium. As the futures contract converges to spot over time, that premium becomes income.

2. Options Premium (Covered Calls)

The fund sells call options against Bitcoin it already owns. Most short-dated options expire worthless, allowing the fund to retain the premium as income.

Additional tools include structured option spreads (such as butterflies) to adapt to changing volatility conditions.

Investment Objective

• Convert: Bitcoin volatility into recurring income.
• Reduce: Reliance on outright price appreciation.
• Maintain: Disciplined risk controls and full collateralization.
• Deliver: Smoother returns relative to long-only crypto exposure.

Risk Overview (Important)

This is not a risk-free strategy. Key risks include:

• Market risk: Sudden price moves or volatility regime changes can impact performance.
• Strategy risk: Periods of low contango or unfavorable option dynamics may reduce returns.
• Execution risk: Derivatives require precise position management.
• Exchange/counterparty risk: Crypto markets operate across multiple venues.
• No guarantee of returns: Past results do not ensure future performance.

The strategy seeks to manage risk, not eliminate it.

Who This Is For

• Investors who believe in Bitcoin long-term.
• Those seeking income and structure, not speculative leverage.
• Allocators who want crypto exposure with an emphasis on discipline.

Key Characteristics

• Fully collateralized positions
• Quarterly reporting
• Institutional risk framework
• Focus on income, not hype