The Fund is an actively managed exchange-traded fund. Under normal conditions, the Fund seeks to outperform the returns of bitcoin over a market cycle by dynamically allocating its assets between bitcoin futures contracts and ether futures contracts. Allocations are determined based on the assessment of the Fund’s sub-adviser, 21Shares US LLC (“21Shares”). ARK Investment Management LLC (“ARK”), the Fund’s sub-subadviser, provides non-discretionary advice to 21Shares related to the spot bitcoin market and spot ether market. 21Shares may, in its sole discretion, consider the advice provided by ARK when making investment decisions for the Fund to the extent 21Shares deems necessary. The sub-adviser and sub-subadviser rely on their expertise in digital asset markets and long-run market expectations, and they may take into account a variety of factors including, but not limited to:

The portfolio managers may employ both fundamental and quantitative tools to assess market conditions.

The Fund considers a neutral weighting to be approximately the relative market capitalization of each asset. The relative market capitalizations of bitcoin and ether are determined by multiplying the asset’s current price by the amount of each asset in circulation. As of September 30, 2023, the market capitalization weight of bitcoin and ether was 72.35% and 27.65%, respectively. The neutral allocation serves as a point of departure for evaluating the market and the extent to which the Fund’s actual allocations adhere to the neutral allocation may vary substantially from period-to-period based on the views of the portfolio managers. The Fund trades tactically to exploit short-term market dislocations or other profit opportunities related to the relative prices of bitcoin and ether or their futures. The Fund may also implement longer-term strategic tilts relative to the neutral weighting.

Under normal conditions, the Fund invests more than 25% of its total assets in investments that provide exposure to (i) bitcoin and/or Bitcoin Futures and/or (ii) ether and/or Ether Futures. The Fund may invest in the ARK 21Shares Active Bitcoin Futures Strategy ETF and/or the ARK 21Shares Active Ethereum Futures Strategy ETF (“Active Bitcoin Futures ETF” and “Active Ethereum Futures ETF,” together the “Underlying ETFs”), both of which are affiliated underlying funds and are managed by the same investment team as the Fund. The Fund may also invest in Bitcoin Futures and Ether Futures (defined below) through a subsidiary, as well as other investment companies that 21Shares believes can provide bitcoin and/or ether exposure. In addition, under normal conditions, the Fund will allocate its remaining net assets to cash and cash equivalents, primarily U.S. government securities, as described below.

Through a subsidiary, the Fund may invest in standardized, exchange-traded bitcoin futures and ether futures contracts that are cash settled in U.S. dollars and are traded on, or subject to the rules of, commodity exchanges registered with the Commodity Futures Trading Commission (“CFTC”), such as the Chicago Mercantile Exchange (the “CME”) (“Bitcoin Futures” and “Ether Futures,” respectively). Each of the Active Bitcoin Futures ETF and Active Ethereum Futures ETF may invest in Bitcoin Futures and Ether Futures, respectively, through a subsidiary. Neither the Fund nor Underlying ETFs invest directly in bitcoin, ether, or other digital assets, or maintain direct exposure to “spot” bitcoin or ether.

The Fund may seek to invest in Bitcoin Futures and Ether Futures contracts with the most attractive combination of cost, liquidity, and other relevant factors, in order to optimize roll yield. Additionally, the Fund may seek to invest in “front month” Bitcoin Futures and Ether Futures contracts. “Front month” contracts are the monthly contracts with the nearest expiration date. Typically, the Fund will roll to the next “nearby” Bitcoin Futures or Ether Futures contracts. The “nearby” contracts are those contracts with the next closest expiration date. Rather than roll the futures contracts on a predefined schedule, the Fund will roll to another futures contract at the time that the Fund believes will generate the greatest roll yield. However, there can be no guarantee that such a strategy will produce the desired results. There is no guarantee that such a strategy will produce the desired results.

Under normal conditions, the Fund may invest in short-term U.S. Treasury instruments. There is no restriction on the duration or composition of the Fund’s Treasury holdings, which are designed to generate yield while also providing liquidity. The Fund may invest in U.S. government securities of any duration. The Fund may also invest in other investment companies for cash management purposes.

What is Bitcoin? Bitcoin is a digital asset also referred to as a digital asset or a crypto asset. Bitcoin, as a digital asset, is a unit of account on the “bitcoin network,” an open source, decentralized peer-to-peer computer network, which is also known as the “Bitcoin Blockchain.” Bitcoin may be held as an investment, may be used to purchase goods and services, or may be exchanged for fiat currency (like U.S. dollars). No single entity owns or operates the bitcoin network and the value of bitcoin is not backed by any government, corporation or other central body. Instead, the value of bitcoin is determined by supply and demand in markets created to facilitate trading and transactions in bitcoin. Because the source code for the bitcoin network is open-source, anyone can contribute to its development. Ownership and transaction records for bitcoin are protected by information technology known as cryptography, which is designed to protect the digital asset and only permits transactions to take place if certain conditions are satisfied. Public-key cryptography, or asymmetric cryptography, is an encryption scheme that uses two mathematically related, but not identical, keys - a public key and a private key. Unlike symmetric key algorithms that rely on one key to both encrypt and decrypt, each key performs a unique function. The public key is used to encrypt, and the private key is used to decrypt.

Transactions in bitcoin that occur on the network are also encrypted, which is designed to prevent anyone from creating counterfeit assets or from spending more money than is in their account. The ultimate supply of bitcoin is finite and currently limited to 21 million “coins.” The amount of bitcoin currently available continues to increase as new bitcoin supplies will be mined until the 21 million current protocol cap is reached. The bitcoin network is operated by a decentralized group of participants who run computer software that validates and records transactions in bitcoin (“miners”), developers who propose changes and improvements to this software, and users who use the software. Periodically, the software used by the bitcoin network is modified, which can result in different versions of bitcoin (“forks”). Although the Fund does not invest directly in bitcoin, the value of Bitcoin Futures can be affected by forks.

What are Bitcoin Futures? Bitcoin Futures are futures contracts traded on a commodity exchange registered with the CFTC. Currently, the only Bitcoin Futures contracts in which the Fund will invest are traded on the CME. The Fund may invest in standard Bitcoin Futures and in micro Bitcoin Futures (collectively referred to herein as Bitcoin Futures). These futures contracts are agreements between two parties that are executed on a commodity futures exchange, and that are cleared and margined through a clearing house. Bitcoin Futures are cash-settled, which means that one party agrees to buy a fixed quantity of bitcoin from another party at a future point in time at a price agreed at the initiation of the contract, but instead of taking physical delivery of bitcoin at the later date, settlement occurs using cash. The contractual obligations of a buyer or seller of Bitcoin Futures are generally satisfied by cash settlement at the end of the contract period or by making an offsetting sale or purchase of an identical futures contract before the designated date of delivery.

What is Ether? Ether is a digital asset also known as a crypto asset. Ether, as a digital asset, is a unit of account on the “Ethereum network,” an open source, decentralized peer-to-peer computer network. The ethereum network is governed by a set of rules that are commonly referred to as the “Ethereum protocol”. Ether may be held as an investment, may be used to purchase goods and services, stored for future use, or may be exchanged for fiat currency (like U.S. dollars). No single entity owns or operates the Ethereum network and the value of ether is not backed by any government, corporation or other central body. Instead, the value of ether is determined, in part, by supply and demand in markets created to facilitate trading and transactions in ether. Ether is the second largest digital asset by market capitalization behind bitcoin. Because the source code for the Ethereum network is open-source, anyone can contribute to its development. Ownership and transaction records for ether are protected by information technology known as cryptography, which is designed to protect the digital asset and only permits transactions to take place if certain conditions are satisfied. Public-key cryptography, or asymmetric cryptography, is an encryption scheme that uses two mathematically related, but not identical, keys - a public key and a private key. Unlike symmetric key algorithms that rely on one key to both encrypt and decrypt, each key performs a unique function. The public key is used to encrypt, and the private key is used to decrypt.

The Ethereum network is operated by a decentralized group of participants who run computer software that validates and records transactions in ether (“validators”), developers who propose changes and improvements to the Ethereum protocol and the software that enforces the Ethereum protocol, and users who use the Ethereum software. Periodically, the software used by the Ethereum network is modified, which can result in different versions of ether (“forks”). Although the Fund and Active Ethereum Futures ETF do not invest directly in ether, the value of Ether Futures can be affected by forks.

For instance, in June 2016, the Ethereum community faced a divisive choice: whether to reverse a large hack (theft) of ether from a third-party project called “The DAO,” a decentralized autonomous organization that was designed to act as a decentralized, investor-directed venture capital firm operating in the Ethereum ecosystem. While the hack didn’t directly impact the Ethereum protocol itself, it harmed trust in the ecosystem. The majority of the ecosystem chose to reverse the hacked transactions and return the stolen ether to its original holders, while a minority believed that reversing the transactions was the incorrect course. This led to a hard fork in the Ethereum Blockchain, with the smaller of the two communities taking the name Ethereum Classic and running a separate blockchain with its own native crypto asset. Additional forks of the Ethereum Blockchains are possible. A large-scale fork could introduce risk, uncertainty, or confusion into the Ethereum Blockchains, or could fraction the value of the main blockchain and its native crypto asset, which could significantly impact the value of ether, and thereby of the Ether Futures held by the Fund.

What are Ether Futures? Ether Futures are futures contracts traded on a commodity exchange registered with the CFTC. Currently, the only Ether Futures contracts in which the Fund will invest are traded on the CME. The Fund and the Active Ethereum Futures ETF may invest in standard Ether Futures and in micro Ether Futures (collectively referred to herein as Ether Futures). These futures contracts are agreements between two parties that are executed on a commodity futures exchange, and that are cleared and margined through a clearing house. Ether Futures are cash-settled, which means that one party agrees to buy a fixed quantity of ether from another party at a future point in time at a price agreed at the initiation of the contract, but instead of taking physical delivery of ether at the later date, settlement occurs using cash. The contractual obligations of a buyer or seller of Ether Futures are generally satisfied by cash settlement at the end of the contract period or by making an offsetting sale or purchase of an identical futures contract before the designated date of delivery.

Each of the Fund and the Underlying ETFs expect to gain exposure by investing in a wholly owned subsidiary of the Fund and each Underlying ETF, respectively, organized under the laws of the Cayman Islands and for which Empowered Funds, LLC dba EA Advisers (the “Adviser”) serves as investment adviser, 21Shares US LLC (“21Shares”) serves as sub-adviser and ARK Investment Management LLC (“ARK”) serves as sub-subadviser. Investing more than 25% of the Fund’s or each Underlying ETF’s assets in the subsidiary could have adverse tax consequences for the Fund or the Underlying ETFs, respectively. See the section entitled “Taxation” in the Statement of Additional Information for more information. There can be no assurance that the Fund or each Underlying ETF will be able to achieve or maintain its target bitcoin or ether exposure. References to investments by the Fund or the Underlying ETFs, respectively, should be read to mean investments by either the applicable subsidiary or the Fund or the Underlying ETFs.

Under normal conditions, each of the Fund and each Underlying ETF invest more than 25% of its total assets in investments that provide exposure to bitcoin and/or Bitcoin Futures and ether and/or Ether Futures.

Neither the Fund nor Underlying ETFs invest directly in ether, bitcoin, or other digital assets, or maintain direct exposure to “spot” ether or bitcoin. Investors seeking direct exposure to the price of ether or bitcoin should consider an investment other than the Fund.

More Information Regarding the Investment Strategy of the Underlying ETFs

The Bitcoin Futures (with respect to the Active Bitcoin Futures ETF) and Ether Futures (with respect to the Active Ethereum Futures ETF) in which the Underlying ETFs invest generally have monthly or quarterly contract periods. Under normal conditions, the Underlying ETFs will hold its respective Bitcoin Futures or Ether Futures contracts during periods when the value of bitcoin or ether may be rising, falling or flat. In order to maintain its positions in Bitcoin Futures or Ether Futures, the Underlying ETFs will sell Bitcoin Futures or Ether Futures contracts as they near expiration, the end of the contract period, and buy new Bitcoin Futures or Ether Futures contracts with a later expiration date. This is called “rolling.” Rolling Bitcoin Futures or Ether Futures contracts means that the Underlying ETFs will incur expenses associated with selling and buying positions.

In addition, the Underlying ETFs’ investments in Bitcoin Futures or Ether Futures will be subject to “contango” and “backwardation.” Contango occurs when a futures contract with a longer term to expiration is priced higher than a contract with a shorter term to expiration. This means that it costs more to replace a futures contract as the remaining term of the contract gets shorter. When rolling Bitcoin Futures or Ether Futures contracts in contango, the Underlying ETFs are selling a contract at a lower price and buying a new, longer contract at a relatively higher price. Backwardation occurs when a futures contract with a longer term is less expensive than a futures contract with a shorter term. When rolling Bitcoin Futures or Ether Futures contracts in backwardation, the Underlying ETFs are selling a shorter-term contract at a higher price and buying a longer-term contract at a lower price. Whenever the Underlying ETFs are buying or selling a Bitcoin Futures or Ether Futures contract, the Underlying ETFs will incur transaction expenses.

The Underlying ETFs’ Remaining Investments. The Underlying ETFs will generally invest its remaining assets in any one or more of the following types of short-term cash instruments to provide liquidity, serve as margin, or collateralize the Underlying ETFs’ investments in Bitcoin Futures or Ether Futures:

The Underlying ETFs may also engage in reverse repurchase agreements or similar transactions for leveraging purposes.

Each of the Fund and the Underlying ETFs are classified as non-diversified funds, which means that the Fund and each Underlying ETF may invest a greater percentage of its assets in investments backed by a particular issuer, or in the case of Bitcoin Futures or Ether Futures contracts, in contracts with a single counterparty or a few counterparties.