Athena Capital Advisors Blockchain & Cryptocurrency...

Athena Capital Advisors LLC

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Suite 302

Lincoln, MA 01773

781.274.9300

athenacapital.com

Athena Capital Advisors

Blockchain & Cryptocurrency Review

January 2018

767 Third Avenue

Floor 21

New York, NY 10017

212.897.9640

One Ferry Building

Suite 255

San Francisco, CA 94111

415.851.7700

Blockchain

Athena Capital Advisors LLC Proprietary and Confidential. Not to be copied or distributed without express written permission.

Please see important disclosures and disclaimers at the end of this presentation.

1

What is Blockchain?

Blockchain is a distributed ledger of peer to peer transactions that allows for secure record storage. Blockchain forms the technical

backbone for cryptocurrencies such as Bitcoin but also has broad applications as a ledger of various records and contracts.

Blockchain is unique because:

• Recording: Each block references the ones before it, creating a seamless record of ownership & transactions

• Disaggregated network: The distributed ledger is run by a disperse network of participants (akin to Wikipedia). There is no

central authority like a traditional financial intermediary. Each transaction is approved through consensus by multiple

independent network participants

• Transparency: It’s fully transparent and accessible at blockchain.info/blocks

• Anonymity: People making transactions are identified solely by coded addresses

• Security: Leverages novel applications of cryptography for security purposes

2 Source: Blockchain Athena Capital Advisors LLC Proprietary and Confidential. Not to be copied or distributed without express written permission.


Recent Blocks

How Blockchain Works

3 Athena Capital Advisors LLC Proprietary and Confidential. Not to be copied or distributed without express written permission.


Source: Blockgeeks

Security of the Blockchain

Blockchain fraud would consist of re-writing old transactions by changing the addressee to the criminal. However, this would alter

the block in which that transaction was stored as well as all subsequent blocks, creating an obvious red flag for the blockchain

network not to accept those transactions. Transactions typically need to have six subsequent blocks, representing a number of

independent validations by the user network, to be considered valid.

In order to prevent the red flag, the criminal would have to re-create all the blocks that occurred after the theft, which is deterred by

limitations on computing power and the time lag in adding new blocks in the Bitcoin protocol. As a result, the blockchain is secure

as long as criminal elements control the minority of the network’s computing power. The incentives are constructed such that the

reward to effort ratio for being an honest miner exceeds that of being a criminal.

4 Source: Medium Athena Capital Advisors LLC Proprietary and Confidential. Not to be copied or distributed without express written permission.


Public and Private Blockchains

While Bitcoin runs off a transparent and public blockchain protocol, institutions such as banks and governments can use private

blockchains to store and manage information in a more efficient way. Public and private blockchains are both decentralized and

immutable, but private blockchains allow owners to control who has network access. Private blockchains also allow companies to

have oversight (ie can revert a transaction) and reduce energy usage because there are fewer nodes.



Source: IBM

Blockchain Implications for Financial Services

Blockchain technology could be used by traditional financial institutions for trade clearing and settlement, trade finance, AML/KYC,

equity and debt issuance, and asset authentication. A WSJ article estimates that blockchain could reduce infrastructure costs for

UBS by as much as $20 billion by 2022. Blockchain could disrupt banks, stock exchanges, accounting, audit, and legal functions.



Source: NYU Stern School of Business

Blockchain & Banking

According to a survey by IBM and the Economist Intelligence Unit, approximately 15% of banks are in the process of adopting

blockchain to reduce time, cost, and risk across business areas. Applications range from reducing settlement times to more

efficient compliance and financial reporting & audit.




Broader Implications of Blockchain

Other uses:

• Home & Auto Ownership, Title Transfer, and Insurance: reduce paperwork and costs

• Healthcare: 30% of all data in the world is healthcare-related. Blockchain can maintain health & prescription history

• Logistics/Supply Chain Management: cut costs, certify origin of goods, comply with import/export laws and sanctions

• Fine Art and Luxury Goods Authentication: prevent counterfeiting, establish proof of ownership



Source: IBM

Current Blockchain Applications

Cryptocurrencies



9

What is Cryptocurrency?

Cryptocurrencies began as an electronic payment system between two parties (akin to PayPal, Venmo, etc.). The original purpose of

cryptocurrencies was to confer the benefits of cash transactions (privacy, fraud protection, accessibility, no fees) to electronic

payments.

• Unlike traditional non-cash payments like credit cards, cryptocurrency:

• Solves the double spending problem via public ledger

• Uses cryptographic techniques to provide security

• Is decentralized, so users don’t pay fees to third parties like banks and credit card companies

• Has superior privacy because people use pseudonyms known as “public keys”

• Is available to all, including people not in the traditional banking system

• Transactions are irreversible, which means merchants don’t have to worry about charge-backs




Applications of Cryptocurrency

Cryptocurrency may have limited day to day uses for those who are currently well-served by the traditional financial system, but

there are many potential implications for economically vulnerable populations and EM/Frontier countries. Additionally,

cryptocurrencies may be attractive for cash-light societies like Scandinavia and fiat currency skeptics.

• Unbanked or underbanked populations: about 9 million US households and 2 billion adults world-wide, particularly women, are

excluded from the financial system. An additional 24 million US households are underbanked. This prevents people from

saving and building up credit

• Remittance or cross-border payments: there is about $400 billion in annual global remittance payments, which can make up

over 25% of GDP in countries like Somalia and Haiti. Remittances are currently hampered by multi-day transaction times and

high fees averaging 7.5%

• Politically and economically unstable regimes: Venezuela is launching a national cryptocurrency, the Petro, backed by oil

reserves in hopes of offsetting the official bolivar’s 96% devaluation amid 4,000%+ inflation

• Sanctions and capital control evasion: Russia is seeking to develop a Cryptorouble, issued and controlled by the government, to

sidestep Western sanctions. China has banned cryptocurrencies for now as citizens may be tempted to use it to bypass capital

controls

• Countries that favor electronic payments: Sweden’s Riksbank is looking into creating an electronic version of the krona for the

nearly cashless economy (about 1% of payments are made in cash)

• Fiat currency skeptics: inflation hawks may prefer the inherent limit on the supply of cryptocurrencies in a global QE world

11 Source: World Bank Athena Capital Advisors LLC Proprietary and Confidential. Not to be copied or distributed without express written permission.


Bitcoin

Satoshi Nakamoto published a white paper in October 2008 spelling out the basic tenets of Bitcoin. Unlike prior iterations of

electronic payment systems, Bitcoin functioned without oversight from a third party intermediary like a bank. The paper had two

innovations: using a self-governing network to police payments and a novel combination of existing cryptographic techniques for

security. Nakamoto is a pseudonym that is widely speculated to represent Nicholas Szabo, a legal scholar with a background in

computer science.

Nakamoto released the original Bitcoin code and mined the first coin in January 2009.




Nicholas Szabo

Types of Cryptocurrencies

Cryptocurrency diversity is increasing as Bitcoin loses market share to Ethereum and other alternatives. Competition will likely

improve speed and user-friendliness while reducing overheated investor appetite in a single currency. While other cryptocurrencies

are highly correlated to Bitcoin, they may ultimately provide attractive alternatives as the underlying technology evolves. Newer

cryptocurrencies seek to differentiate themselves by focusing on issues including smart contracts, privacy, global payments, and

protocols building out blockchain.



Source: Coinmarketcap

Cryptocurrency Market Cap by Currency

Cryptocurrency Returns

2017 returns have been staggering at over 1,000%, but with significant volatility of up 7% a day. Public blockchain assets

dramatically outperformed traditional risk assets in 2017.

14 Source: Athena Capital Advisors

Annual Cryptocurrency Returns (%)

30 Day Trailing Average

Cryptocurrency As a Payment System

Transaction processing capacity will be crucial for cryptocurrencies to be practicable. Daily transactions have been increasing,

which bodes well for the development of cryptocurrencies into an institutional payment system. However, different cryptocurrencies

have different transaction bandwidths based on their underlying coding.



Source: Coindesk

Bitcoin vs Other Cryptocurrencies

Bitcoin is facing significant difficulty scaling. Compared to other cryptocurrencies, Bitcoin faces challenges with network capacity

due to its 10 minute average transaction processing time. As transaction volume increases, the pluralistic nature of the network

causes bottlenecks in processing time and drives up transaction fees. Unless this is rectified, it will be unlikely that Bitcoin becomes

the go-to cryptocurrency. Bitcoin has been losing market share in 2017 to competing cryptocurrencies such as Ethereum, which

can process approximately 3 times more transactions per day.



Source: Coinmetrics

Average Daily Transactions (#)

Bitcoin

Ethereum

Categorizing Bitcoin



17

How to Categorize Bitcoin?

“In a way, the emergence of cryptocurrencies is akin the dot-com

era, because there is no perfect comparison to illuminate the

“real” value of something like bitcoin.

It’s a currency (like the dollar), whose owners consider it a long-

term store of value (like silver), which is appreciating as if it were

a faddish collectible (like a Beanie Baby), and is running on a

blockchain platform, which some insist could change the future

of everything from legal titles to daily payments (like Internet).

How can one be so sure bitcoin is a bubble if we don’t even know

what the proper comparison is—dollars, silver, Beanie Babies, or

the Internet?”

- The Atlantic

18 Source: The Atlantic Athena Capital Advisors LLC Proprietary and Confidential. Not to be copied or distributed without express written permission.


Is Bitcoin a Currency?

Bitcoin is not yet a currency as traditionally defined in economic terms.

1) A unit of account – very few retailers denominate their prices in Bitcoin even when they accept it and prices vary widely across

trading platforms

2) A store of value – Bitcoin’s exceptional volatility is unlike any traditional currencies or assets

3) A medium of exchange – only ~300k transactions a day, not accepted by many merchants, long delays in transactions (10

minutes+), surveys indicate that about 93% of users are male



Source: NYU Stern School of Business, Coinmetrics

https://ww

w.ncbi.nlm.

nih.gov/pm

c/articles/P

MC451913

9/

Trailing 30 Day Bitcoin Volatility vs S&P 500 (%)

Bitcoin

S&P 500

Is Bitcoin the New Gold?

While Nakamoto envisioned Bitcoin functioning akin to gold, it hasn’t yet displayed such characteristics. Bitcoin has had a negative

correlation to gold thus far and its own users think it’s more like a digital currency than digital gold. Athena thinks that defining an

asset as a store of value is extremely subjective. For example, what is the intrinsic value of fiat currency, gold, or diamonds? Assets

become stores of value if they are deemed as such, and Bitcoin is unlikely to gain such social status in the near-term given its

novelty and the public’s skeptical reaction.




“There is nobody to act as central bank or federal reserve to adjust the money supply as the population of

users grows…In this sense, it's more typical of a precious metal. Instead of the supply changing to keep

the value the same, the supply is predetermined and the value changes.”

- Nakamoto

Is Bitcoin a Speculative Investment?

Athena believes Bitcoin is a speculative investment. According to a 2014 research paper by Christopher Fink and Thomas

Johann of the University of Mannheim, the ratio of trades to commercial transactions in Bitcoin is approximately 12:1. Research

by Florian Glaser of Goethe University also found no connection between the volume of users trading cryptocurrencies on

exchanges and those using them to make payments. This leads us to infer that the vast majority of Bitcoin trading volume is for

speculative investment.



Source: Goethe University

“There is no subsequent migration

between exchange and network

volumes, at least within the last

three years. That is, both

increases in Wikipedia searches or

exchange volumes do not affect

network volumes. We Bitcoin -

Asset or

Currency? Twenty Second

European Conference on

Information Systems, Tel Aviv 2014

11 therefore conclude that

uninformed users most likely stay

with exchange trading after their first

contact, holding Bitcoin as

alternative

investment asset and eventually will

neither contribute to nor participate

in the Bitcoin currency

network.” – Florian

Glaser

Is Bitcoin a Speculative Investment?

According to Fink and Johann, the history of Bitcoin winners and losers is akin to a slightly right-skewed distribution with a mean

around zero, which supports the idea that it is a risk asset.




Is Bitcoin a Speculative Bubble?

Lessons about speculative bubbles:

• A bubble is hard to define, and even harder to spot

• Bubbles can be “rational” if you expect the supply of buyers to remain nonzero with some probability (greater fool theory)

• They end very quickly

• Bubbles are typically fueled by retail investors, but about 1,000 people own 40% of all outstanding Bitcoin. These core

owners may provide a ballast against smaller and newer market participants

• As of 2Q17, 58% of people surveyed on a cryptocurrency website said that digital asset valuations are in a bubble

• Bitcoin’s 2013 price decline (a stress case scenario) is more akin to the tech bust of the late 1990s than the oft-referenced

tulip bulb bubble. Bitcoin seems to resemble a risky, entrepreneurial investment more than a tulip bubble

23 Source: College of William & Mary, Athena Capital Advisors

Approximately 1,000 people own 40

percent of all bitcoin in circulation,

according to Bloomberg. Just 100 accounts

control 17 percent of the market.

https://www.theatlantic.com/business/archi

ve/2017/12/bitcoin-bubble/547952/



https://www.bloomberg.com/news/articles/2017-12-08/the-bitcoin-whales-1-000-people-who-own-40-percent-of-the-market

https://www.theatlantic.com/business/archive/2017/12/bitcoin-bubble/547952/





Portfolio Implications

A small allocation to Bitcoin may improve risk-adjusted portfolio performance based on modern portfolio theory because Bitcoin

thus far has not been correlated to any traditional assets. Of course, correlations are unstable and subject to change.




Global Regulation

The sampling of recent headlines shown below highlights that global governments are keen to regulate cryptocurrency, but the

response so far has been a patchwork ranging from excitement to crackdown. China and South Korea are seeking to curb

cryptocurrency trading while Japan and Scandinavian countries are more sanguine. Cryptocurrencies could evade regulations

absent a coordinated global regulatory response.


Please see important disclosures and disclaimers at the end of this presentation. Source: Strategic Coin, Bitcoin, Hacked, CCN, Coindesk

US Regulation

Below is a summary of the views of various US regulatory agencies on cryptocurrencies.



Source: MarketWatch

Athena’s Conclusion: Blockchain and Cryptocurrency

Opportunities:

• In our opinion, blockchain is a game-changing technology with broad applications across business and government functions

• By eliminating the middleman, blockchain can lower costs and challenge the function of many institutions

• Cryptocurrencies based on blockchain technology can have useful applications, especially in EM and Frontier countries,

though the systems aren’t robust enough to compete with traditional currency at this time (for example, the volatility is too

high). Some cryptocurrencies are more viable than others as a payment system. The next generation of cryptocurrency is

creating decentralized applications such as smart contracts, which have broader uses than payments

• Cryptocurrency is most likely a speculative asset that has been uncorrelated to traditional assets thus far, though it has

extremely high volatility and is not widely understood

Risks:

• It is difficult to determine the intrinsic value of cryptocurrencies due to their novelty. While prices have skyrocketed, they may

be justified if cryptocurrency is a competitor for Visa, MasterCard, Amex, Western Union, etc. On the other hand,

cryptocurrencies could turn out to be a repeat of the internet bubble

• The lack of a central authority can have drawbacks; there is no recourse from errors and no one to mediate conflicts

• Cryptocurrencies are not yet a viable medium of exchange; they are not broadly accepted by merchants, are very volatile, and

the owner base is relatively homogeneous

• Bitcoin mining is extremely energy intensive

• Regulatory action may prohibit cryptocurrencies or significantly change the landscape, though several governments are testing

their own cryptocurrencies

• Cryptocurrency is considered property by the IRS and is subject to capital gains tax rates



How to Invest in Cryptocurrency (caveat emptor)

28 Source: CoinDesk, Coincentral, Athena Capital Advisors

Option 2) Buy Through an Investment Fund

Public Funds: Bitcoin Investment Trust (GBTC), Winklevoss Bitcoin Trust (unregistered)

Private Funds: BlockTower, Cryptocurrency Fund, Protos, etc.

Estimated total over 120 hedge funds with over $2 billion AUM

Option 1) Buy Cryptocurrency Directly through an Exchange

There are over 40 exchanges globally. Coinbase, Gemini and Kraken are the primary exchanges based in the US. Coinbase is the

most popular exchange, but it charges high fees. Gemini seeks to serve a more institutional clientele by focusing on security and

regulation. Kraken supports more cryptocurrencies, but it isn’t registered with US regulators and isn’t as robust as its competitors.



How to Store Cryptocurrency

29

Cryptocurrency is typically stored in a wallet, which is a service that allows users to hold, send, and receive digital currency. There

are two primary kinds of cryptocurrency wallets:

• Hot wallet: computer or smartphone-enabled software that stores a user’s account information. Accounts within exchanges like

Coinbase are also considered hot wallets. These accounts are seen as less secure because they are on devices or cloud

networks that are connected to the internet and can be hacked.

• Cold wallet: hardware or paper-based storage that is not connected to the internet and therefore not susceptible to hacking.

Hardware wallets are physical devices that resemble USB flash drives. Some wallet companies will store most client funds in

cold wallets. A paper wallet is simply a written down or printed version of the user’s login information (public and private keys).

It is impossible to retrieve account access if users lose their hardware or paper wallets.

Investors can have both hot and cold wallets. Hot wallets are typically used for trading while cold wallets are considered more

secure and are better for storing cryptocurrency holdings. Below are some of the providers of various wallets:

Hardware Cold Wallets:

• Ledger Nano S

• Trezor.io

• KeepKey

Hot Wallets:

• Coinbase

• Blockchain.info

• Electrum

• Jaxx

Paper Wallets:

• Blockchain.info

• MyEtherWallet (MEW)

• Walletgenerator.net

• Bitaddress.org



Comparing Cryptocurrency Wallets

30 Source: Blockgeeks Athena Capital Advisors LLC Proprietary and Confidential. Not to be copied or distributed without express written permission.


Appendix – Blockchain Examples



Source: Blockchain

“Accountants work frequently in the ‘verification’ business – audit and attest and so

on -- and blockchain is all about verification...Clearly audit is going to change

dramatically -- it already is changing… Ultimately, CPAs will be attesting to

companies’ compliance with cyber-security standards”

Appendix – Cryptocurrency Demographics

User community largely:

• Male

• Age 26-35

• Most first bought cryptocurrency this year

• Generally own over $1k in cryptocurrency



Source: Coindesk

Appendix - How Does Mining Work?

Miners use graphics processing units (GPUs) to do proof of work exercises all day. There are five large mining pools where

miners pool resources and share the rewards. Serious miners can build large mining farms, often near cheap sources of

energy like Icelandic geothermal. The winning miner earns 12.5 Bitcoin (~$200k).

Mining can be extremely energy-intensive. Energy consumption is the primary real-world cost of Bitcoin. Global mining

costs about $1.6 billion a year in electricity and is akin to the annual energy consumption of Denmark. Each Bitcoin

transaction uses approximately the same energy as 4,000 Visa card transactions. Other cryptocurrencies have less

intense energy usage.

33 Source: NYU Stern School of Business, Greentechmedia Athena Capital Advisors LLC Proprietary and Confidential. Not to be copied or distributed without express written permission.


Appendix - Cryptography Basis of Blockchain Security

Hash functions:

• Text input algorithm output

• Example: Athena 412b726dc9dc6f02318798948a421e124f1ca5946be39b87cca764e063d6ebca

• Athena Capital 658352c6a378a521129416ba3dcdb21e4ce1149c4c3565b50c3a8cb473ed4cf1

• Algorithm turns any text into a 64 digit alphanumeric code

• Output will always be the same for a given input

• Can’t work backwards from output to find original input

• Initially developed by AT&T Bell Labs in 1950s as way to encrypt data

Difficulty

• Difficulty denotes the number of consecutive leading zeroes that must be in a hash (ie

0000000000000000000098948a421e124f1ca5946be39b87cca764e063d6ebca)

• The more leading zeroes, the harder it is to randomly generate such a hash

• Difficulty calibrated so on average will take about 10 minutes for Bitcoin. As a result, higher computing power does

not make mining easier

Proof of Work (Bitcoin)

• Miners use trial and error to try to find a nonce that produces a hash with enough leading zeroes (can take billions to

trillions of iterations)

• Cannot be gamed and no algorithmic shortcuts. Uses time and electric resources

• Any given transaction will be verified by multiple independent sources




Appendix - Transaction Example

35 Source: Blockchain, Athena Capital Advisors

Block 1 Block 2 Block 3 Block 4 Block 5

16pMLZJCumkuB7a6uSrN

Wfmxp85ADQrLMo

(Alice’s Address)

1DMxMmZ1VycmM3rLB9P

e9HCXPNR48KiRfn (Bob’s

Address)

Alice sends Bob 0.02 Bitcoin at 1:30 pm on 12/19/2017 310bcc79a04076373d37309c653

910317376fd44ec0038f819b773c

c7b0371e0 (unique hash of all

transaction info)

Transaction 1

1LE7j5WNzLMatb7AYLaE

KqGYsGPGgRqoCa

(Mike’s Address)

15TARz56yraLD8PmKv5xS

LuY4xuCRyYzQ4 (Dan’s

Address)

Mike sends Dan 0.7 Bitcoin at 1:40 pm on 12/19/2017 61d0988ef92a779fa875b07abd34

5e3bbd5958d2a06916620ebd451

57db9f052 (unique hash of all

transaction info)

Transaction 2

Hash

Previous

Hash

3J6F

3J6F

A83H

A83H

R9S5

R9S5

Z293

Z293

4B7A



https://blockchain.info/address/16pMLZJCumkuB7a6uSrNWfmxp85ADQrLMo

https://blockchain.info/address/16pMLZJCumkuB7a6uSrNWfmxp85ADQrLMo

https://blockchain.info/address/1DMxMmZ1VycmM3rLB9Pe9HCXPNR48KiRfn

https://blockchain.info/address/1DMxMmZ1VycmM3rLB9Pe9HCXPNR48KiRfn

https://blockchain.info/tx/310bcc79a04076373d37309c653910317376fd44ec0038f819b773cc7b0371e0



https://blockchain.info/address/1LE7j5WNzLMatb7AYLaEKqGYsGPGgRqoCa

https://blockchain.info/address/1LE7j5WNzLMatb7AYLaEKqGYsGPGgRqoCa

https://blockchain.info/address/15TARz56yraLD8PmKv5xSLuY4xuCRyYzQ4

https://blockchain.info/address/15TARz56yraLD8PmKv5xSLuY4xuCRyYzQ4

https://blockchain.info/tx/61d0988ef92a779fa875b07abd345e3bbd5958d2a06916620ebd45157db9f052



Why is Blockchain Secure?

•Competition among miners creates the indelibility of data on a blockchain

•Fraud = rewriting old transactions

•Prohibitively difficult to recreate a block; nonces must be found for all subsequent blocks before honest miners code the

next block

•Implication: transactions are indelible, but also irreversible

•According to Nakamoto: “as long as a majority of CPU power is controlled by nodes that are not cooperating to attack the

network, they’ll generate the longest chain and outpace attackers”

36 Source: NYU Stern School of Business Athena Capital Advisors LLC Proprietary and Confidential. Not to be copied or distributed without express written permission.


Disclosures and Disclaimers



37

Athena Capital Advisors LLC (“Athena”) prepared this document solely for the person to whom it has been given for informational and discussion purposes only. This document and the

information contained herein are strictly confidential and may not be reproduced, distributed or communicated to any third party without the express written approval of Athena. Athena

reserves the right at any time to amend or change the contents of this document without notice. The information and opinions herein reflect the views and opinions of Athena as of the

date hereof and not as of any future date. All forecasts are speculative, subject to change at any time and may not come to pass due to economic and market conditions.

This document and the information contained shall not constitute an offer, solicitation or recommendation to sell or an offer to purchase any securities, investment products or investment

advisory services. The material contained herein has not been based on a consideration of any individual client circumstances and is not investment advice, or should it be construed in

any way as tax, accounting, legal or regulatory advice. An investment with Athena involves substantial risks and there can be no assurance that the investment objectives described

herein will be achieved. Athena believes that the research used in this presentation is based on accurate sources (including but not limited to economic and market data from various

government and private sources and reputable external databases), but we have not independently verified those sources, and we therefore do not guarantee their accuracy. The

opinions, projections and estimates contained herein reflect the views of Athena only and should not be construed as absolute statements and are subject to change without notice.

In considering the performance information contained herein, recipients should bear in mind that past and present performance is not necessarily indicative of future results, nor does it

ensure that investors will not incur a loss with respect to their investment. Current performance may be higher or lower than the performance data quoted. Certain performance numbers

in this presentation may be unaudited, preliminary and based on estimates. Final reported and audited performance numbers may vary considerably from these estimates due to many

factors. Estimated gross and net performance numbers could change materially as final performance figures and underlying investment costs and fees are determined and

allocated. Certain information contained herein constitutes “forward-looking statements” which can be identified by the use of terms such as “may”, “will”, “should”, “seek”, “expect”,

“anticipate”, “project”, “estimate”, “intend”, “continue”, “target” or “believe” (or the negatives thereof) or other variations thereon or comparable terminology. Due to various risks and

uncertainties, actual events or results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. As a result, investors should

not rely on such forward-looking statements in making their investment decisions. No representation or warranty is made as to future performance or such forward-looking statements.

Benchmarks are shown for illustrative purposes only and are provided for the purpose of making general market data available as a point of reference only. Such benchmarks may not be

available for direct investment, may be unmanaged, assume reinvestment of income, do not reflect the impact of any trading commissions and costs, management or performance fees

and have limitations when used for comparison or other purposes because they, among other reasons, may have different trading strategy, volatility, credit, or other material

characteristics (such as limitations on the number and types of securities or instruments). No representation is made that any benchmark or index is an appropriate measure for

comparison.

Historical index performance results for all historical benchmark indices do not reflect the deduction of transaction and custodial charges, or the deduction of an investment manager fee,

the incurrence of which would have the effect of decreasing indicated historical performance results. The historical performance results for all indices are provided exclusively for

comparison purposes only, so as to provide general comparative information to assist in determining whether Athena’s performance meets, or continues to meet, your investment

objective(s). Comparative indices may be more or less volatile than Athena portfolios. Athena performance results reflect the reinvestment of dividends and other account earnings, and

are net of applicable account transaction charges. It should not be assumed that Athena account holdings will correspond directly to any such comparative benchmark index.

Any description of tax consequences set forth herein is not intended as a substitute for careful tax planning. Recipients of this material are advised to consult tax counsel for advice

specifically related to any and all tax consequences of an investment made with or through Athena. The information provided herein is not intended to, nor does it specifically advise on,

tax matters pertaining to federal, state, estate, local, foreign or other tax consequences of an investment. The recipient is solely responsible for all tax consequences with respect to any

investment made with or through Athena.

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781.274.9300

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Athena Capital Advisors Blockchain & Cryptocurrency...

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