The Pearl Fund’s Bitcoin Fund offers a unique tax advantage that is unavailable through other Bitcoin investment vehicles. While standard Bitcoin investments and ETFs require paying capital gains taxes when you sell, our fund structure allows investors to experience Bitcoin's tax-free growth after the required 10-year holding period.

Yes and no, the OZ 1.0 program requires the initial deferred capital gains to be recognized on December 31, 2026 and processed w/ your 2026 income tax return. Then, if the QOF investment interest is held 10 years or longer, all realized capital gains thereafter will be tax-free.

Tax revenue: Billions of $ of tax revenue is locked up by Bitcoin holders with unrealized gains who don’t want to sell due to tax liabilities. To get the OZ benefits they need to realize capital gains on the investments they make into the fund now which will bring in revenue to the US Treasury in exchange for no taxes due in 10 years.

Jobs: Due to the 10+ years required for tax benefits & the fees derived from the investments into the fund the OZ program is an ideal structure to create long-term, well paying jobs in Opportunity Zones.

The Pearl Bitcoin fund offers exceptional benefits for generational wealth transfer. If an investor dies, their heirs inherit both the investment and the accumulated holding period. This means if someone has held their investment for five years and passes it to their heirs, they only need to hold it for another five years to receive the tax-free benefits—a feature rarely found in inheritance tax law.

The Pearl Bitcoin Fund is designed for accredited investors who already understand Bitcoin's potential and are looking for tax-efficient ways to increase their exposure. It's particularly well-suited for long-term investors with a generational wealth perspective who want to preserve capital across multiple generations free from future tax rate concerns.

There will be a 60 basis points per year management fee in addition there is a 1% entrance fee and a 2% exit fee.

The Pearl fund has executed a custody agreement with Anchorage Digital Prime. They offer our fund OTC desk purchasing and are a federally chartered bank. Other Anchorage customers include many of the ETFs (i.e. Blackrock), Hedge Funds, VCs, governments and corporations.

The firm has engaged Deloitte as their tax advisor and to do the fund’s annual tax returns

Yes the fund has engaged HC Global (link). They specialize in funds like our and have a global footprint w/ over $40 billion in Assets under Administration (AUA). They will produce & send quarterly statement to investors.

The fund will have annual audits once its has operated for one full calendar year . The audit report will be provided to investors. The auditor will be an outside firm and will be selected at a later date

While the full tax benefits require a 10-year hold, our fund structure allows for redemptions. You can harvest gains earlier if needed, though you would pay applicable capital gains taxes on those withdrawals and a 5% early withdrawal penalty.

This flexibility is unusual for long-term investment vehicles and gives investors greater control over their capital when circumstances change.

Unlike speculative crypto funds, the Pearl Bitcoin Fund employs institutional-grade security, and compliance measures that are SOC type I & II compliant and audited by one of the “big 4” firms.

Bitcoin can only be withdrawn with multiple advanced biometrics and behavioral analytics approvals. Operations require a quorum of approvals, and multiple approvals from the institutional custody firm.

Your investment is protected through regulated custodians, with comprehensive auditing and transparent practices and segregation of Bitcoin assets from the institution’s balance sheets in case of bankruptcy.

We implement a straightforward "buy and hold" strategy focused on long-term value creation rather than complex trading tactics.

No. Our approach is based on clearly defined elements of the tax code. Unlike complex tax avoidance schemes, the Opportunity Zone provisions we utilize are codified in the Internal Revenue Code since 2018 and made permanent in the BBB in 2025. There's no regulatory gray area to navigate—we're simply implementing a popular tax incentive program we have used since 2019 with our venture funds and are now implementing with this Bitcoin fund.

The underlying business model is investor-centric.  The Pearl Bitcoin Company is designed to accommodate the Bitcoin investment strategies of each direct investor, and indirect investors through the Pearl Bitcoin Fund. Investors control their investment appetite for Bitcoin-linked equity returns, the duration of their investment, and the return of capital and profits.

No long-term investment capital lockup. Unlike real estate and private equity funds, the Pearl Bitcoin Company does not enforce any long-term capital lock-up while holding investors hostage to a liquidation event at some unknown future date.  

Services supported by real people. BTC asset management services are at the core of the business model. Real people servicing the Company's investors and customers in their pursuit to maintain and manage an investment position in Bitcoin. Full transparency, institutional custody, institutional administrator, audited financial statements, customer account statements and human customer service managers.  Not a technology black box run by computers and text bots.

Equity-Only Capital Structure - just simple equity capital structure with entry and redemptions anchored to Bitcoin spot market prices. Leverage is absent to avoid financial risks to the Company. The Company is not a Bitcoin Treasury company and does not pledge its Bitcoin holdings as collateral to back the issuance of debt and derivatives.

Compliance-Centric - Company management is committed to a robust tax compliance program to maintain, defend and protect its tax classification as a Qualified Opportunity Zone Business pursuant to IRC Section 1400Z Opportunity Zones. Top of mind attention to tax compliance every day.  Retention of tax professionals to review tax compliance files and reports and to be fully prepared to address inquiries from Internal Revenue and any other regulators who contend they have standing to make inquiries.

Mandatory deferred taxation of capital contributions into Pearl Bitcoin Company to TY2026 (the same tax rule that is universally applicable to all Opportunity Zone investors nationwide). There is no IRC ambiguity; the deferred capital is recognized into IRC Section 61 gross income (tax terminology) on December 31, 2026 as the lower of i) the deferred capital gain amount, or ii) fair market value of the investment interest in the Pearl Bitcoin Fund. The deferred capital gain amount is indisputable and non-negotiable in the IRC.  Investors may take the initiative to explore the determination of fair market value of their investment in the Pearl Bitcoin Fund in compliance with the fair market value guidance provided in IRS Form 709 instructions.  The Pearl Bitcoin Fund does not compel its investors to report the fair market value alternative in compiling their TY2026 tax returns.  The Fund's management will not prepare, nor defend, nor expend company monies to derive any fair market value estimate other than as reported in audited financial statements.

Estate planning option - investments in the form of equity securities issued by the Pearl Bitcoin Fund are not marked-to-fair market value in excess of tax cost basis at the time of estate settlement on IRS Form 709 United States Gift (and Generation-Skipping Transfer) Tax Return, regardless of the investors' holding period. Inheritance beneficiaries step into the shoes of the deceased person. There is no tax ambiguity or tax opinion required to support this tax treatment.

Tax-Free Capital Gains Embedded Option for Long-term Investors - The Pearl Bitcoin Fund does not impose any mandatory +10-year hold on its investors.  No wait-and-see-and-hope for some future unknown liquidity event.  Investors completely control their holding period for all or some their investments in the Pearl Bitcoin Fund. In the case of redemptions prior to minimum 10-year hold for this option, then the investors' after-tax returns will generally track with the performance of Bitcoin over their holding period, reduced by Company operating costs, up-front subscription fee (1%) and redemption fees (5%).  Investors who wish to pursue long-term tax-free capital gains treatment will realize after-tax returns equal to before-tax returns that generally track with the performance of Bitcoin over their holding period (through December 31, 2047), reduced by Company operating costs, up-front subscription fee (1%) and redemption fees (2%).   As stated above, management is committed to a robust compliance program to protect and defend this option within the framework of IRC Section 1400Z Opportunity Zone program. 

Most states comply (i.e. not required to pay any capital gains tax to the state) if your OZ investment complies with the federal OZ rules.

However there are a few states that don’t comply with the OZ rules and you must pay capital gains tax to the state. These are California, Mississippi Massachusetts and North Carolina. Arkansas and Hawaii only comply if the OZ fund is based in that state.

The Pearl Funds are based in an OZ in Harlem in New York City

With the Opportunity Zone program scheduled to conclude at the end of 2026, there is increased urgency for investors seeking these unique tax benefits. Additionally, as more investors become aware of this tax-free Bitcoin investment structure, similar funds may emerge—though our experience with Opportunity Zone investing since the program's inception gives us a significant advantage in implementation.

Because of the size of the fund it will be not be buying bitcoin from exchanges but will have the ability to select from a number of OTC desks. At each purchase (or sale) we will determine the best price from multiple OTC options at that particular point in time.

Each taxable year, a qualified opportunity zone business (“QOZB”) must earn at least 50 percent of its gross income from business activities within a QOZ.  The regulations provide three safe harbors that a business may use to meet this test.  These safe harbors take into account any of the following—

Whether at least half of the aggregate hours of services received by the business were performed in a QOZ;

Whether at least half of the aggregate amounts that the business paid for services were for services performed in a QOZ; or

Whether necessary tangible property and necessary business functions were located in a QOZ.

According to 26 U.S. Code § 61 - Gross income defined, gross income means all income from whatever source derived, including gross income derived from business and gains derived from dealings in property. We expect that well over 50% (and most likely 100%) of the QOZB gross income is directly associated with the QOZB business activities performed in a Qualified Opportunity Zone. Additionally, the QOZB is expected to be eligible to employ one or more of the three safe harbor provisions to support the QOZB’s contention that it satisfies the 50 percent-of-gross income test, since it will hire people and contractors to perform QOZB services in the Qualified Opportunity Zone. description

According to 26 U.S. Code §1400Z-2(d)(2)(D)(i), the term "qualified opportunity zone business property means tangible property used in a trade or business of the qualified opportunity fund (or qualified opportunity zone business) if-

(I) such property was acquired by the qualified opportunity fund (or qualified opportunity zone business) by purchase (as defined in section 179(d)(2)) after December 31, 2017,

(II) the original use of such property in the qualified opportunity zone commences with the qualified opportunity fund (or qualified opportunity zone business) or the qualified opportunity fund (or qualified opportunity zone business) substantially improves the property, and

(III) during substantially all of the qualified opportunity funds (or qualified opportunity zone business’) holding period for such property, substantially all of the use of such property was in a qualified opportunity zone.

Tangible property has form and physical substance, and it can be touched and moved.

Leased real property is also classified as QOZBP in the regulations pertaining to IRC Section 1400Z Opportunity Zones.

See IRS Digital Assets. Digital Assets, including Bitcoin, are classified by the IRS as Property, not tangible property. Therefore, Digital Assets, including Bitcoin, are not classifiable as QOZBP. description

The final OZ regulations provide that Intangible Property of a qualified opportunity zone business is used in the active conduct of a trade or business in a QOZ if the following requirement is satisfied.

The use of the intangible property must be normal, usual, or customary in the conduct of the trade or business. In addition, the intangible property must be used in the QOZ in the performance of an activity of the trade or business that contributes to the generation of gross income[1] for the trade or business.

We have already stated that the Pearl Fund Company will be engaged in the active business of Bitcoin asset management on behalf of its Members, (and the members of its Members (e.g. Pearl Bitcoin Fund)) with continuity and regularity, with the intent to generate gross income for its Members.

Then it follows that Bitcoin, which is acquired, owned and sold throughout the Company’s execution of Bitcoin asset management services, is in fact one of the primary components of the Company’s active business, and the direct ownership of Bitcoin is intended to be the primary generator of gross income for the Company’s its Members (and the members of its Members)