1. Market systemic risk
- The fund invests in the crypto digital currency market, and the price of the cryptocurrency will fluctuate under the influence of various factors such as politics, economy, investment psychology and trading system, which will produce potential risks to the assets of the fund and lead to the fluctuation of the fund's income level. In the cryptocurrency market, this kind of risk which can not be eliminated by decentralized investment is called market systemic risk.
- Policy risk: The risk is caused by the fluctuation of market price due to the changes of macro policies (such as monetary policy, fiscal policy, industrial policy, regional development policy, etc.) in various countries in the world.
- Business cycle risk: With the cyclical change of economic operation, the return level of the investment market also changes periodically. When the fund invests in the digital currency market, the income level will also change accordingly, thus resulting in risks.
- Purchasing power risk: The purpose of the fund investment is to maintain and increase the value of the fund assets. The fund uses USDT as the settlement currency. If the USDT is greatly devalued, the income obtained from the fund's investment in market may be offset by inflation, thus reducing the actual income of the fund and affecting the value maintenance and appreciation of the fund assets.
2. Liquidity risk
- It refers to that the fund assets can not be converted into USDT rapidly, and the investment transaction cannot be realized or cannot be realized at the current reasonable price due to the market depth restriction or drastic market fluctuation in some markets, resulting in liquidity risk and even affecting the net value of fund shares.
- The fund mainly invests in the spot market of cryptocurrency, and carries out a small amount of contract hedging under special circumstances. Under normal circumstances, the proportion of assets invested in cryptocurrency accounts for 90% - 95% of fund assets. Under extreme market conditions, investment operation may not be realized or cannot be realized at the current reasonable price due to the deep restriction of the market or the drastic fluctuation of the market, thus bringing the risk of investment to the fund.
3. Managing risk
- In the process of fund management and operation, the knowledge, experience, judgment, decision-making and skills of fund managers will affect their possession of information and their judgment of economic situation and cryptocurrency price trend, thus affecting the level of fund returns;
- The change of management means and technology of fund managers and fund trustee will also affect the level of fund returns.
4. Other risks
- With the emergence and development of new investment instruments in line with the investment philosophy of the fund, the fund may face some special risks if it invests in these instruments;
- Risks arising from technical factors, such as the risk of unreliable computer systems;
- Due to the rapid development of fund business, the risk of imperfect system construction, staffing, internal control system establishment, etc;
- Risks caused by human factors, such as insider trading, fraud, etc;
- The possible risks arising from reliance on key business personnel such as fund managers;
- Possible risks due to business competition pressure;
- Investors who invest in the fund shall bear their own investment risks;
- In addition to the direct sales of the fund by BKEX Global, the fund also sells through other digital asset trading institutions. BKEX Global will strive to ensure the security of the income or principal of its users.