fortunafunds.com
Key Takeaways
- Most investors don’t fail to pick the right Bitcoin exposure — they fail to hold it when things get uncomfortable.
- Leveraged Bitcoin products make the holding problem significantly worse, turning a difficult situation into a potentially catastrophic one.
- Protection built into a position before a selloff is fundamentally different from protection purchased after one begins.
- HBTC uses an options-based strategy designed to de-lever Bitcoin exposure so investors can stay in the trade when others are forced out.
- The goal isn’t just to limit losses. It’s to make Bitcoin exposure something clients can actually hold.
Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower than the quoted returns. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. For the fund’s most recent month-end returns, please visit fortunafunds.com. Total annual operating expense ratio is 1.75%. Please see the fact sheet for standardized performance.
There is a moment every advisor with Bitcoin-exposed clients knows well. The market is down sharply. The client is calling. And the question isn’t whether the long-term thesis is intact — it’s whether the client can emotionally withstand staying in the position long enough for it to matter.
That moment is where most Bitcoin strategies fail. Not on paper. Not in a backtest. In real time, with a real client, in a real drawdown.
The Fortuna Hedged Bitcoin Fund (ticker: HBTC) was built specifically around this problem. The question Mark Adams, CIO and Co-Founder of Fortuna Funds, kept coming back to wasn’t “how do we capture more upside?” It was: “how do we construct something investors can actually hold?”
Why Is Bitcoin So Hard to Hold Through Volatility?
Bitcoin’s volatility is well documented. What gets discussed less often is the behavioral cost of that volatility — what it actually does to investors and their advisors when a drawdown arrives.
Traditional assets have valuation anchors. When equities sell off, analysts point to earnings multiples, dividend yields, book value. These metrics don’t make drawdowns painless, but they give investors a framework for deciding whether to hold. Bitcoin has no equivalent. There is no earnings yield to fall back on, no coupon to collect while you wait. When it sells off, the only question is whether to stay or go.
That uncertainty makes Bitcoin uniquely difficult to hold — and it makes the structure of how you own it matter enormously. An investor who is already uncomfortable with Bitcoin’s volatility, sitting in a product that amplifies every move, is not going to hold through a 20% decline. They are going to sell at the worst possible time and capture the loss without participating in the recovery.
What Does Leverage Do to the Holding Problem?
Leveraged Bitcoin products make this dynamic significantly worse. The appeal is straightforward — more upside in a rising market. The cost is less obvious until you’re living through it.
“On days where you’re down 5%, and then all of a sudden your asset is down 10 plus — that’s not great. Leverage is a dual-edged sword. It can be great when you’re going straight up. But it can cause a lot of problems.”
— Mark Adams, CIO & Co-Founder, Fortuna Funds
When a client’s Bitcoin position is down 10% or more in a single session, the conversation an advisor has to have changes completely. It’s no longer about whether Bitcoin is a reasonable portfolio allocation. It’s about damage control. That conversation is harder to recover from than the drawdown itself.
Leverage also creates a practical problem for long-term holding. Daily rebalancing in leveraged products generates compounding losses during volatile, sideways markets — a phenomenon called volatility decay. An investor can be directionally right about Bitcoin over a year and still lose money in a 2x product if Bitcoin moves up and down sharply along the way. Leverage punishes the very thing Bitcoin requires: patience.
What Does It Mean to De-Lever Bitcoin Exposure?
HBTC takes the opposite approach. Rather than amplifying Bitcoin’s movements, the fund is structured to reduce them — specifically on the downside.
“We are not using leverage. In fact, by the nature of what we’re doing, we’re de-levering the asset.”
— Mark Adams, CIO & Co-Founder, Fortuna Funds
HBTC uses an actively managed options strategy applied to bitcoin-related securities to provide Bitcoin-linked exposure while seeking to reduce downside volatility. The strategy combines long exposure to bitcoin-related securities with options positions designed to limit how much the portfolio can lose when Bitcoin sells off sharply.
The options positions are repositioned monthly, keeping the hedge aligned with current market conditions rather than relying on a static structure that may drift out of relevance as Bitcoin’s price moves.
The result is a fund that participates in Bitcoin’s upside while having a built-in cushion against sharp declines — a structure designed specifically to make Bitcoin exposure more holdable for the clients most advisors are actually working with.
Why Does It Matter That Protection Is Built In Before a Selloff?
This is a point worth dwelling on. There is a meaningful difference between a position that has protection embedded before a selloff begins, and one where an investor tries to add protection after volatility has already spiked.
When Bitcoin sells off sharply, implied volatility in the options market tends to spike at the same time. That spike makes purchasing options significantly more expensive — sometimes prohibitively so. Investors who wait for a drawdown to begin before buying protection are paying elevated prices for an insurance policy they needed days earlier.
HBTC’s hedge is already in place. It was put on at normal volatility levels, as part of the fund’s monthly repositioning, before any particular drawdown began. Investors who own HBTC going into a selloff have the cushion in place. Investors who try to add protection after the fact are dealing with a very different cost structure.
“Having the protection on allows you to hold while other people are losing their minds. You can sit there and say: I’m calm. I’m down some, but I’m down a lot less than I could be.”
— Mark Adams, CIO & Co-Founder, Fortuna Funds
How Did This Play Out During the April 2025 Selloff?
The April 2025 tariff-related market selloff provided a live test of the strategy. When Bitcoin and IBIT (the iShares Bitcoin ETF that HBTC uses for exposure) sold off sharply in early April, the built-in options hedge started to demonstrate its value. As IBIT rebounded, so did HBTC.
The advisors who mattered most in that moment weren’t necessarily the ones with the best-performing positions. They were the ones whose clients didn’t panic. Clients who saw their Bitcoin-related exposure hold up better than the broader market, who had a reason to stay in rather than a reason to sell, were positioned to participate in the recovery that followed.
That is the practical value of de-levered, hedged Bitcoin exposure — not just a better drawdown number, but a calmer client conversation at exactly the moment those conversations are hardest.
Is HBTC the Right Fit for Every Bitcoin Allocation?
HBTC is not designed for investors who want maximum Bitcoin exposure and can tolerate the full range of its volatility. For that investor, a direct Bitcoin ETF is simpler and less expensive.
HBTC is designed for a different investor: one who wants meaningful participation in Bitcoin’s return potential but needs a structure that reduces the likelihood of a panic sell at the wrong time. Clients who are Bitcoin-curious but volatility-averse. Clients who have been burned before by buying high and selling low during a drawdown. Clients whose advisors need to be able to have a calmer conversation when things get difficult.
For those clients, the hedge embedded in HBTC is not a cost — it’s the feature that makes the allocation viable in the first place.
Who Is Managing This Strategy?
HBTC is managed by Mark Adams, CIO and Co-Founder of Fortuna Funds, with more than 20 years of professional options trading experience including time at the Federal Reserve. The strategy reflects an institutional derivatives approach applied to Bitcoin-linked exposure — the kind of risk management framework that professional options traders use to stay in difficult markets, now accessible through a single ETF in a standard brokerage account.
The fund launched March 19, 2025, and is listed on the Cboe BZX Exchange. Foreside Fund Services, LLC is the fund’s distributor.
The Fortuna Hedged Bitcoin ETF seeks to achieve long-term capital appreciation. The Fund is an actively managed exchange-traded fund (“ETF”) that seeks to achieve its investment objective primarily through its investments in Bitcoin-related securities. The Fund does not invest directly in Bitcoin.