Risk Disclosure

Options premiums increase

This is the upfront capital required to enter an options contract. Premiums are affected by a variety of market conditions such as expected volatility and available Bitcoin to be sold in an options contract.

Counterparty default

In any investment transaction, counterparty default is a risk. Major cryptocurrency exchanges such as Lnmarkets, Deribit, and Binance are our counterparties. If our counterparty were to default on its obligations, we would have the right to make a creditor's claim on your behalf.

Custodial risk

Bitcoin transactions are irrevocable and stolen or incorrectly transferred bitcoins may be irretrievable. As a result, any incorrectly executed bitcoin transactions could adversely affect the value of your collateral.

Regulatory uncertainty

Regulatory changes or interpretations could obligate Encrypted Energy or its counterparties to register and comply with new regulations, resulting in potentially extraordinary, nonrecurring expenses to Encrypted Energy and its counterparties.

Bitcoin exchange fees

The financial sponsors of the Bitcoin options markets, such as Lnmarkets, Deribit, and Binance may increase their fees to prices that exceed the payoffs generated from options contracts purchased on their exchanges.

Competitive pressures

New entrants to the market for Bitcoin Volatility Hedge Contracts may negatively affect the ability of the Encrypted Energy to garner substantial income and achieve commercial success.