- The Fortuna team launched the Fortuna Hedged Bitcoin ETF ($HBTC) because we believe that crypto-curious investors should have the option to allocate without taking an outsized amount of risk.
- Bitcoin's sharp declines are rarely predictable, which is why waiting for the right moment to add a hedge isn’t a winning strategy.
- During five distinct Bitcoin selloff periods since HBTC was launched, the fund cushioned investors’ downside relative to the spot price of Bitcoin, while maintaining Bitcoin-linked exposure.
- HBTC uses options on IBIT, the iShares Bitcoin Trust ETF to execute its hedging strategy effectively, thanks to IBIT’s deep, liquid options market
Source: Bloomberg. This relative performance chart and standardized performance can also be found on the HBTC factsheet found here.
*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. HBTC's total annual operating expense ratio is 1.75%
If you're watching Bitcoin’s recent price movement, you've probably had one of two reactions.
Either you're excited about the sell-off because you’ve been waiting for a dip that finally makes Bitcoin feel accessible, or you're relieved that you didn't buy in at the top. Either way, if you're paying close attention, it’s likely that a better question than “should I allocate” is “what's the right way to participate?”
Astute observers will note that HBTC doesn't hold Bitcoin directly.
Bitcoin Volatility Isn't a Bug. But It Is a Real Problem.
Bitcoin doesn't sell off gently. When it moves against you, it can move hard and fast; often outside of regular trading hours and without obvious warning. The January 14 to February 5, 2026 period is a recent example. Bitcoin declined -34.50% over that stretch. A 34% loss in less than a month is difficult for most investors to absorb, let alone stay disciplined and hold throughout.
HBTC, over that same period, sought to manage the downside and experienced a -15.36% decline, which was less than half of Bitcoin's drop. That's a +19.14% difference in relative performance during one of the more punishing Bitcoin drawdowns on record¹ showing the effectiveness of its structure.
What Makes HBTC Different From Simply Owning Bitcoin?
HBTC uses an actively managed options strategy applied to bitcoin-related securities to provide Bitcoin-linked exposure while seeking to reduce downside volatility.
This means the fund combines long exposure to Bitcoin-related securities with:
- Protective put options designed to place a floor on potential losses when Bitcoin sells off sharply.
- A short call spread used to help generate premium income that helps offset the cost of those puts.
The result is a payoff profile designed to participate in uncapped Bitcoin-related upside while seeking to limit how much investors lose when the market drops. The options positions are repositioned monthly, keeping the hedge aligned with current conditions rather than drifting out of relevance.
This means that, regardless of when a Bitcoin selloff might occur, HBTC’s underlying hedges are already in place, and with regular rebalance intervals the fund has a better chance of avoiding over-paying for this hedge. We believe that investors who try to add protection after a drawdown starts face a very different equation since options become more expensive precisely when they’re needed most.
Why IBIT Options?
*video as of 2/25/26. More recent data for HBTC and IBIT can be found in the attached fact sheet.
Astute observers will see that HBTC doesn’t hold Bitcoin directly. So why exactly does HBTC use IBIT, the iShares Bitcoin ETF, as the underlying security for its options strategy?
The answer is more practical than ideological.
When Fortuna Funds was initially designing the strategy, the portfolio management team explored other potential hedging strategies. But one key factor was liquidity in the Bitcoin options chain, and as IBIT has grown into the dominant Bitcoin ETF in the industry, its options market has developed significant depth and volume. This liquidity matters enormously for execution, as it allows the fund's portfolio managers to execute efficient trades. An illiquid options market makes the entire strategy more expensive and less precise.
It's also worth noting that HBTC's fund documents are written to give the PMs flexibility for their hedging strategy, as they call for options on Bitcoin-related securities, not IBIT specifically. If a more liquid, more efficient instrument emerges, the fund has the option to adapt. But for now, IBIT's options chain appears to be the best available tool for the job.
The Drawdown Pattern Has Been Consistent.
Since HBTC's launch in March 2025, there have been five distinct Bitcoin drawdown periods. Across all five, HBTC has demonstrated relative outperformance versus Bitcoin spot, with HBTC’s outperformance relative to the spot price of Bitcoin ranging from +2.32% to +19.14%.²
We believe this consistency is important. A hedged strategy that only works once could be coincidence; a strategy that seeks to manage downside across multiple different market environments - including a tariff-driven macro selloff in April 2025, a fourth-quarter correction in late 2025, and the sharp January 2026 drawdown - reflects a structure that appears to be working as designed.
Who Is HBTC For?
HBTC is not designed for investors who want full, unhedged Bitcoin exposure and can absorb its full volatility range. A direct Bitcoin ETF is simpler and less expensive for that investor.
We believe that HBTC is designed for an investor who is genuinely curious about Bitcoin's potential, but who either can’t financially afford a significant, and potentially sustained draw-down, or who doesn’t want their first experience to be volatility and draw-downs that send them running. For those investors, the hedge embedded in HBTC is an important feature that makes the investment palateable in the first place.
¹ Source: Bloomberg LLC, as of 3/31/2026.
² Drawdown periods referenced: 3/24/25-4/8/25, 10/6/25-10/17/25, 10/27/25-11/21/25, 12/10/25-12/18/25, 1/14/26-2/5/26. Source: Bloomberg LLC, as of 3/31/2026.
