3iQ At-The-Market Fund Offerings

January 25, 2021

3iQ’s mission is to help investors gain price exposure to digital assets such as bitcoin and ether in a passive and transparent manner through regulated, exchange-traded funds. We are honored to be the digital asset manager of choice for Canadians who have entrusted us with over C$1 billion of assets under management. Thank you to all of the unitholders who have been with us since the beginning and to those who have joined along the way.

Since November of 2020, there has been an overwhelming demand for fund units. In order to facilitate this demand, we conducted offerings in various formats. The recently announced At-The-Market (“ATM”) program seeks to achieve the best execution of unit offerings to the benefit of existing unitholders while allowing us to meet current demand.

An ATM offering is a daily offering of units into a trading market at publicly available bid prices on the Toronto Stock Exchange or marketplace. ATM offerings attempt to optimize the offer price by permitting units to be sold in the market over an exchange at prevailing market prices as opposed to negotiated prices with institutional investors. The benefits to unitholders of the ATM program include the accretion of bitcoin per unit, lower market impact, lower cost, and increased transparency of offerings.

Accretion To Unitholders

When units are sold at a market price higher than the Net Asset Value per Unit (“NAVPU”), i.e. trading at a premium, this is accretive to existing unitholders. Each unit sold above the NAVPU increases the bitcoin per unit value for all outstanding units. As outlined in the chart below, the distribution of units through the ATM have largely increased the bitcoin per unit since the inception of the program. In accordance with 9.3(2)(a) of NI 81-102, the issue price of a unit will not, as far as reasonably practicable, be a price that causes dilution of the NAVPU.

Acting in its capacity as the investment fund manager, 3iQ seeks to utilize the ATM offering to suppress market fluctuations. When the premium to the NAVPU is elevated, the ATM offering is utilized. When the premium to NAV compresses or potentially trades at a discount, the Manager will likely not use the ATM offering. These levels assist in normalizing market performance to better track the price of the underlying digital asset. The ATM offering requires no commitment of any kind with respect to the number of units sold, the price, or the timing. The Manager retains the right to sell, suspend or terminate the offering at any time. The Agency agreement provides us with full discretion on the price, amount, and timing of sales.

Lower Market Impact

The ATM offering distributes units into the natural trading flow of the markets. During times of outsized demand, units are sold at the prevailing market price. Prior offerings conducted including the fund re-opening in May and the various overnight offerings in November, presented challenges due to the timing and magnitude of the offerings. The ATM offering seeks to alleviate these challenges by spreading out offerings over time and seeks to achieve the best execution by continuously checking the market for the highest bid. In contrast to large agency offerings targeted to institutional investors with negotiating power, the Manager can provide regular offerings in the open market at various amounts to achieve enhanced price discovery on a real-time basis.

Lower Cost

The ATM offering seeks to reduce the costs associated with offerings. Placement agents on fund re-openings and overnight offerings incur costs of marketing, diligence, and coordination on these large transactions. As such, these fees are charged to investors participating in the offerings which can affect the fees charged. The ATM offering seeks to decrease and minimize fees so that the price in the open market is beneficial to both new and existing unitholders. Agent’s fees and commissions associated with the ATM offering are typically lower compared to fully marketed offerings.

Increased Transparency

As seen in our prospectus supplement and the press release, the ATM offering requires an increased level of transparency to investors. The Manager must disclose the number of units sold, average price, gross and net proceeds raised, and aggregate commissions paid to the Agents of the offerings. This data is disclosed in our quarterly and annual filings.

Our primary objective as a passive asset manager is to track the price of the underlying digital asset and provide value to unitholders. 3iQ will continue to monitor these offerings and take all reasonable measures to ensure that unitholders continue to benefit from the growth of our funds.

Disclaimer

The material presented on our website is for informational purposes only and should not be construed as investment advice. This website is not a recommendation of, or an offer to sell or solicitation of an offer to buy, securities of any of our funds in the United States or to U.S. persons, and is not an offer to sell these securities and is not soliciting an offer to buy these securities in any other jurisdiction where the offer, solicitation or sale is not permitted or would be unlawful.

January 25, 2021

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The Bitcoin Fund Establishes At-The-Market Equity Program

Toronto, July 13, 2021 (GLOBE NEWSWIRE) — Not for distribution to U.S. newswire services or for dissemination in the United States.

This announcement and the information contained herein is restricted and is not for release, publication or distribution, in whole or in part, directly or indirectly in, or into or from the United States or any other jurisdiction in which the same would be unlawful. Further, this announcement is for information purposes only and shall not constitute an offer to sell or issue or the solicitation to buy, subscribe for or otherwise acquire any securities of The Bitcoin Fund in any jurisdiction in which any such offer or solicitation would be unlawful.

The Bitcoin Fund (the “Fund”) is pleased to announce its at-the-market equity program (the “ATM Program”) to allow the Fund to issue Class A Units having an aggregate sale price of up to US$200,000,000 (the “Class A Units”) to the public from time to time, at the discretion of 3iQ Corp. (the “Manager” or “3iQ”). Any Class A Units issued will be sold at the prevailing market price at the time of sale through the Toronto Stock Exchange (“TSX”) or any other marketplace in Canada on which the Class A Units are listed, quoted or otherwise traded.

The volume and timing of distributions under the ATM Program, if any, will be determined at the Manager’s sole discretion. The ATM Program will be effective until December 5, 2022 unless terminated prior to such date by the Fund. The Fund intends to use the proceeds from the ATM Program in accordance with the Fund’s investment objectives, investment strategies and investment restrictions.

Sales of the Class A Units through the ATM Program will be made pursuant to the terms of an equity distribution agreement dated July 9, 2021 with Canaccord Genuity Corp. (the “Agent”).

Sales of Class A Units will be made by way of “at-the-market distributions” as defined in National Instrument 44-102 Shelf Distributions, including sales made directly on the TSX or on any other existing trading market for the Class A Units in Canada. Since the Class A Units will be distributed at prevailing market prices at the time of the sale, prices may vary among purchasers during the period of distribution. The ATM Program is being offered pursuant to a prospectus supplement dated July 9, 2021 to the Fund’s short form base shelf prospectus dated November 5, 2020, as amended by amendment no. 1 dated January 5, 2021. Copies of the prospectus supplement and the short form base shelf prospectus may be obtained from your registered financial advisor using the contact information for such advisor, or from representatives of the Agent, and are available on SEDAR at www.sedar.com.

About 3iQ Corp.

Founded in 2012, 3iQ is Canada’s largest digital asset investment fund manager with over C$2.5 billion in assets under management. 3iQ was the first Canadian investment fund manager to offer a public bitcoin investment fund, The Bitcoin Fund (TSX: QBTC, QBTC.U), and a public Ether investment fund, The Ether Fund (TSX: QETH.UN, QETH.U). More recently, 3iQ launched the 3iQ CoinShares Bitcoin ETF (TSX: BTCQ, BTCQ.U) and the 3iQ CoinShares Ether ETF (TSX: ETHQ, ETHQ.U). 3iQ offers investors convenient and familiar investment products to gain exposure to digital assets. For more information about 3iQ and its digital asset investment funds, visit www.3iQ.ca or follow us on Twitter @3iQ_corp.

Press Contact

Fred Pye – Chairman and CEO  

E: fred.pye@3iQ.ca  

P: +1 (416) 639-2130 

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Important Notices

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED THEREIN, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

This announcement should not be distributed, forwarded, transmitted or otherwise disseminated in or into the United States. This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for securities in the United States or any other jurisdiction. The ETF’s securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or under the applicable securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, resold, transferred or delivered, directly or indirectly within, into or in the United States, absent registration or an applicable exemption from, or except in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any relevant state or other jurisdiction of the United States. Neither this announcement, nor the fact that it has been disseminated, shall form the basis of, or be relied upon in connection with, any future information that we distribute.

Disclaimer

Please read the prospectus before investing. Important information about the ETF is contained in the prospectus. Copies of the prospectus may be obtained from 3iQ Corp. or at www.sedar.com. 

You will usually pay brokerage fees to your dealer if you purchase or sell units of the ETF on a stock exchange or other alternative Canadian trading system (an “exchange”). If units of the ETF are purchased or sold on an exchange, investors may pay more than the current net asset value when buying units of the ETF and may receive less than the current net asset value when selling them.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.

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Fred Pye

Frederick T. Pye

CHAIRMAN, CHIEF EXECUTIVE OFFICER & DIRECTOR

Frederick T. Pye is the Chairman, Chief Executive Officer and Director of 3iQ Corp. He is also the Chairman and Director of 3iQ Digital Holdings Inc. Mr. Pye is recognized for creating and promoting creative and unique investment products for the investment industry.

Mr. Pye has managed private client portfolios with Landry Investment Management and various other investment dealers. Prior to this Mr. Pye was Founder, President & Chief Executive Officer of Argentum Management and Research Corporation, a company dedicated to managing and distributing quantitative investment portfolios including the first long-short mutual fund in Canada.

He was also Senior Vice-President and National Sales Manager of Fidelity Investments Canada and an integral part of the team that saw assets rise from $80 million to over $7.5 billion in assets under management during his tenure. He also held various positions with Guardian Trust Company, which listed the first Gold, Silver and Platinum Certificates on the Montreal Exchange.

Mr. Pye obtained a Masters in Business Administration from Concordia University.