Find Answers to Your Questions
Digital assets, also known as crypto assets or tokens, refer to any asset—digital or physical—that is stored, accessed, and traded via the blockchain. The digital asset ecosystem includes thousands of different tokens that can be categorized into 3 types:
To help further contextualize the digital asset landscape, view our Digital Asset Taxonomy.
Several traditional banks or financial service companies, such as Goldman Sachs, offer limited access to select crypto assets through third-party partnerships. Conversely, fund managers like Arca or MultiCoin Capital focus on digital asset investing with versatile fee structures, comprehensive risk management, and broad product exposure. For more information, read Crypto Digital Asset Funds - An Easy Way Into Crypto Investing For Family Offices?
Stablecoins are intended to be digital cash equivalents, often pegged to an external reference such as the U.S. Dollar, treasuries, or commercial paper. Stablecoins can be fiat-backed, commodity-backed, algorithmic-based, or cryptocurrency-backed. In volatile markets like crypto, investors look for digital means of “fixed” assets as on-ramps or off-ramps for token positions that allow them to remain in the digital asset ecosystem. For more information, read What Is a Stablecoin?
The digital assets market is nascent and rapidly evolving, resulting in significant information asymmetry and price inefficiency. However, experienced investment managers are well-equipped to capitalize on the associated volatility and opportunities due to their strong information network, scalable infrastructure, risk management, and other advanced technologies. For more information, read Why Digital Assets Require Active Management.
Methods for analyzing securities and fixed income products in traditional markets, such as Graham and Dodd’s Security Analysis and The Handbook of Fixed Income Securities by Frank Fabozzi, offer useful frameworks for valuing some digital assets. Similar to other asset classes, digital assets vary in function, type, and issuance; therefore, they should be treated separately using a blend of conventional and nuanced guidelines. To learn more about valuation methods, watch Digital Asset Types and Valuations.
ESG encompasses any business or investment’s environmental, social, and governance aspects. With respect to digital assets, Bitcoin—one of the thousands of crypto assets that make up this ecosystem—has been criticized for its environmental impact. More pertinent to the ESG conversation concerning digital assets is the governance impact, which reflects collaborative decision-making and organizational structures. For more information, read Digital Assets: ESG – Why Not GSE?
The investment risks of digital assets are similar to traditional asset classes with the addition of regulatory uncertainty and security vulnerabilities. For example, without consumer protections in place, lost or forgotten private keys pose custody risks resulting in unrecoverable funds. Separately, smart contracts carry security risks due to data exposure and vulnerabilities to cyber attacks. For more information, read Parsing 3 Types of Risk in Digital Assets and Different Types of Crypto Trading and Investment Risks in 2022.
Institutions and other market participants must implement new operational procedures to accommodate the perpetually changing conditions and corresponding price actions characteristic of a 24/7/365 global market. A market without opening and closing hours creates a need for institutions to analyze larger sets of data, constantly monitor global news, and consider price changes through a different lens. For more information, read Here’s How Crypto-Market’s 24/7 Trading is Setting an Example.
Institutions have identified digital assets for investment diversification, liquidity, and efficiencies in adopting emerging technologies. However, many institutions face adoption challenges due to outdated operational procedures, a lack of regulatory guidance, and tax and compliance discrepancies. For more information, watch our panels from The Digital Age For Institutional Investors.
Digital assets offer a different means for investors to diversify portfolio exposure and risk. Further, tokens allow investors to contribute and participate in blockchain projects with varying use cases, including DeFi, NFTs, and Web3. The digital asset ecosystem has many sectors and enables investors to get involved in projects they foresee future adoption and growth. For more information, read The Case for Crypto in an Institutional Portfolio.
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This fund is an interval closed-end fund.
An investor should carefully consider the investment objectives, risks, charges, and expenses of the Arca U.S. Treasury Fund before investing. This and other information is available in the Fund’s prospectus, which should be reviewed carefully prior to investing. To obtain a prospectus, please call 1-888-526-1997.
Fund Risks
You may not have access to the money you invest for an extended period of time. • You may not be able to sell your shares at the time or in the quantity of your choosing regardless of how the Fund performs. • Investors should understand that the Fund's shares are not currently listed on or available for trading through a national securities exchange or any other exchange, and a market for trading on an exchange may never be available to investors. Except for individually negotiated peer-to-peer transactions, there is currently no secondary market for ArCoins, and no such market is expected to develop. • Because you may not be able to sell your shares at the time or in the quantity of your choosing, you may not be able to reduce your exposure to the Fund in a market downturn. • An investment in the Fund may not be suitable for investors who may need the money they invested in a specified timeframe. • The amount of any distributions the Fund may pay is uncertain. There is no assurance that the Fund will maintain a particular level of distributions, nor is there any guarantee that the Fund will make distributions at any particular time. • Due to the emerging nature of blockchain use in securities transactions, the Fund anticipates that (other than monthly repurchase offers as described below) there will initially be limited to no liquidity in ArCoins due to low or no volume in peer-to-peer transactions. Investors should therefore initially expect greater price volatility in the secondary market than would be the case if the shares had greater liquidity. • The Fund will not invest, directly or indirectly, in digital assets, including digital securities. • Although shareholders can engage in peer-to-peer transactions using blockchain technology, the Transfer Agent will maintain the official record of the Fund's shareholders.
Arca Capital Management, LLC dba “Arca Labs” serves as adviser to the Arca U.S. Treasury Fund, distributed by UMB Distribution Services, Member FINRA/SIPC. Arca and UMB are not affiliated.
