Nakamoto Announces Actively Managed Bitcoin Derivatives Program Designed to Generate Volatility Income and Hedge Downside Exposure
Nakamoto Announces Actively Managed Bitcoin Derivatives Program Designed to Generate Volatility Income and Hedge Downside Exposure
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Tags
crypto
Key Terms
bitcoin derivativesfinancial
Bitcoin derivatives are financial contracts whose value is linked to the price of bitcoin—examples include futures, options and swaps. They let investors gain exposure to, hedge against, or speculate on bitcoin’s price moves without holding the coin itself, much like an insurance policy or a bet on whether a stock will rise or fall. For investors, derivatives can magnify gains or losses and help manage risk or access bitcoin through regulated markets.
covered callsfinancial
A covered call is a financial strategy where an investor sells the right to buy their owned stock at a specific price within a certain time frame. This allows the investor to earn extra income from the stock they already own, especially if they believe the stock price will stay stable or rise slightly. It helps generate additional earnings while potentially limiting the upside if the stock's price increases significantly.
call spreadsfinancial
Call spreads are an options tactic where an investor buys a call option (the right to buy a stock at a set price) and simultaneously sells another call option on the same stock with a higher target price and the same expiration. This limits how much you can gain and how much you pay up front, so it’s a lower-cost, lower-risk way to bet on a stock rising — like buying a discounted ticket that gives up the biggest prize in exchange for a cheaper price.
protective putsfinancial
A protective put is an option strategy where an investor buys the right to sell a stock at a set price, acting like insurance against a big drop in value. It matters because it limits potential losses while allowing participation in upside gains, similar to paying an insurance premium to protect a valuable possession; investors use it to manage risk and preserve capital during uncertain markets.
put spreadsfinancial
A put spread is an options strategy that combines buying and selling put contracts for the same stock and expiration at different strike prices, creating a limited-risk, limited-reward position. Think of it like buying insurance while selling a cheaper policy layer to offset part of the cost: it protects against a drop in the underlying security but caps how much you can gain, making it useful for hedging or modestly bearish bets.
implied volatilityfinancial
Implied volatility is the market’s estimate of how much a stock’s price is likely to swing over a given time, inferred from the price of its options rather than from past moves. It matters to investors because higher implied volatility means options cost more and signals greater perceived risk or uncertainty—like a weather forecast predicting stormy conditions—which can affect hedging costs, trade decisions, and expectations about future price movement.
separately managed accountfinancial
A separately managed account (SMA) is a personalized investment portfolio owned by a single investor and run by a professional manager who buys and sells securities on that investor’s behalf. It matters to investors because an SMA offers tailored asset selection, tax handling, and transparency—like hiring a personal chef who prepares meals to your dietary needs rather than sharing a set menu—so you can align holdings with your goals and see exactly what you own.
qualified custodyfinancial
An arrangement where a regulated, vetted third-party custodian holds and safeguards financial assets on behalf of an investor, fund, or company, operating under specific legal and operational standards. It matters to investors because qualified custody reduces the risk of loss, theft or commingling, preserves clear legal ownership and helps meet regulatory and audit requirements — like keeping valuables in a bank safe deposit box that is subject to formal rules and inspections.
Program Facilitated by Bitwise Asset Management and Kraken Institutional Services
NASHVILLE, Tenn.--(BUSINESS WIRE)--
Nakamoto Inc. (NASDAQ: NAKA) (“Nakamoto” or the “Company”), today announced the details of an actively managed Bitcoin derivatives program (the “Program”) that the Company has operated since the first quarter of 2026, designed as a complement to the Company’s core Bitcoin asset management strategy. The Program is intended to generate recurring volatility income from a defined portion of the Company’s Bitcoin holdings and hedge a portion of the Company’s downside exposure to Bitcoin price risk.
Through the Program, a portion of the Company’s Bitcoin holdings are held in Kraken’s qualified custody solution and used as collateral for a derivatives strategy managed by Bitwise Asset Management (“Bitwise”) in a separately managed account (“SMA”).
"Bitcoin's implied volatility is one of the most persistently mispriced assets in capital markets," said Tyler Evans, Chief Investment Officer of Nakamoto and UTXO Management. "Working with institutional-grade partners like Bitwise and Kraken, we have built a disciplined framework to harvest that premium systematically, at scale, and convert that opportunity into long-term value for shareholders. This Program is just one component of a broader effort to identify and execute on opportunities to generate yield on our Bitcoin holdings."
Program Overview
Under the Program, Nakamoto and Bitwise, in its capacity as SMA manager, actively manage a portfolio of listed and over-the-counter Bitcoin-linked derivatives. The Program is organized around two complementary sleeves:
Income sleeve: covered calls and call spreads. The Company writes covered calls and call spreads against a defined portion of its Bitcoin holdings to convert the implied volatility embedded in Bitcoin options markets into recurring premium income. Position sizing, strike selection, and tenor are governed by the Company's risk framework.
Hedging sleeve: protective puts and put spreads. The Company purchases protective puts and put spreads against a defined portion of its Bitcoin holdings to reduce the Company's mark-to-market exposure to adverse Bitcoin price movements over defined time horizons. Where appropriate, premium outlays associated with this sleeve are partially funded by income generated from the income sleeve.
Premiums under the Program are collected and paid in both Bitcoin and U.S. dollars, depending on the instrument, counterparty, and venue. Premiums received may be used to fund hedging premiums, Bitcoin acquisitions, or general corporate purposes, in each case as determined by the Company in accordance with its capital allocation policies.
Bitcoin held as collateral for written option positions continues to be owned by the Company and remains reflected in the Company’s publicly reported Bitcoin holdings. Protective positions purchased under the Program are held in addition to, not in lieu of, the Company’s spot Bitcoin holdings.
Strategic Rationale
The Company views the Program as a complement to its long-term Bitcoin accumulation strategy. The Program is designed to pursue two objectives:
Monetize Bitcoin volatility. By systematically writing covered calls and call spreads against a defined portion of the Company’s Bitcoin holdings, the Program seeks to convert the implied volatility in Bitcoin options markets into recurring operating income, which the Company may reinvest in its Bitcoin treasury, apply against operating costs (including interest expense), or retain as working capital.
Mitigate downside risk. By maintaining a defined allocation to protective puts and put spreads, the Program seeks to provide a partial hedge against adverse movements in the price of Bitcoin, supporting the stability of the Company’s net asset value and reducing the risk of forced deleveraging in stressed market conditions.
Implementation
The Program is executed directly by the Company’s Chief Investment Officer in collaboration with Bitwise through the SMA. Both components operate under a single investment mandate, which addresses, among other items:
Maximum notional exposure of the Program as a percentage of the Company’s aggregate Bitcoin holdings, taking into consideration limitations on the Company’s participation in Bitcoin price appreciation above the applicable strike price from call positions;
Permitted instruments, venues, and counterparties; and
Collateral, margining, and custody requirements.
The results of the Program in the first quarter 2026 will be included in the Company’s Form 10-Q covering that period.
About Nakamoto Inc.
Nakamoto Inc. (NASDAQ: NAKA) is a Bitcoin company that owns and operates a global portfolio of Bitcoin-native enterprises spanning media & information services, asset management & financial services, and consulting & advisory services. Nakamoto is the parent company of BTC Inc, the world’s leading Bitcoin media enterprise behind Bitcoin Magazine, The Bitcoin Conference, and Bitcoin for Corporations, and of UTXO Management, a Bitcoin-native asset manager focused on public and private market investments across the Bitcoin ecosystem. For more information, visit nakamoto.com.
About Bitwise
Bitwise Asset Management is a global crypto asset manager with $11 billion in client assets and a suite of over 70 investment products spanning ETFs, separately managed accounts, private funds, hedge fund strategies, and staking. The firm has an eight-year track record and today serves more than 5,000 private wealth teams, RIAs, family offices, and institutional investors, as well as 21 banks and broker-dealers. The Bitwise team of over 200 technology and investment professionals is backed by leading institutional investors and has offices in San Francisco, New York, and London. For more information, visit www.bitwiseinvestments.com.
About Kraken
Founded in 2011, Kraken is one of the world's longest-standing and most secure crypto platforms globally. Kraken clients trade more than 600 digital assets, traditional assets such as U.S. futures and U.S.-listed stocks and ETFs, and 6 different national currencies, including GBP, EUR, USD, CAD, CHF, and AUD. Trusted by millions of institutions, professional traders and consumers, Kraken is one of the fastest, most liquid and performant trading platforms available. Kraken's suite of products and services includes the Kraken App, Kraken Pro, the Krak App, Kraken Institutional, Kraken's onchain offerings and the NinjaTrader retail trading platform. Across these offerings, clients can buy, sell, stake, earn rewards, send and receive assets, custody holdings, and access advanced trading, derivatives, and portfolio management tools. For more information about Kraken, please visit www.kraken.com
Forward Looking Statements
All statements, other than statements of historical fact, included in this communication that address activities, events or developments that Nakamoto expects, believes or anticipates will or may occur in the future are forward-looking statements, as defined under U.S. federal securities laws. Forward-looking statements can be identified by the use of words such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “create,” “intend,” “could,” “would,” “may,” “plan,” “will,” “guidance,” “look,” “goal,” “future,” “build,” “focus,” “continue,” “strive,” “allow,” “seek,” “see,” “aim,” “target,” or the negative of such terms or other variations thereof. However, the absence of these words does not mean that the statements are not forward-looking. Forward-looking statements in this press release include, but are not limited to, statements regarding Nakamoto's Bitcoin derivatives program, including the expected generation of volatility income, the effectiveness of hedging strategies, the deployment and management of Nakamoto's bitcoin holdings, capital allocation plans, and Nakamoto's broader Bitcoin asset management strategy. These forward-looking statements are inherently uncertain and involve numerous assumptions and risks. Factors that could cause actual results to differ materially from those projected include, but are not limited to: (i) the volatility of Bitcoin prices and Bitcoin derivatives markets; (ii) counterparty credit risk associated with listed and over-the-counter derivatives transactions; (iii) the risk that margin or collateral calls could require the forced liquidation of Bitcoin holdings at unfavorable prices; (iv) liquidity risk in Bitcoin options markets; (v) the risk that written call positions may limit Nakamoto's participation in Bitcoin price appreciation; (vi) basis risk between derivatives instruments and spot Bitcoin; (vii) the interaction between the derivatives program and Nakamoto's existing secured credit facility, including collateral priority and cross-default risk; (viii) regulatory developments affecting digital asset derivatives markets; (ix) the risk that net premium income may not offset program costs or financing expenses; (x) the risk that hedging positions may not effectively mitigate declines in Bitcoin price or may cost more than the protection they provide; (xi) reliance on Bitwise Asset Management as the SMA manager and on Kraken as the custodian and derivatives venue; (xii) Bitcoin market volatility; and (xiii) other important factors detailed in Nakamoto's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other documents that are filed, or will be filed, with the SEC and that are or will be available on Nakamoto's website at www.nakamoto.com and on the website of the SEC at www.sec.gov.
All forward-looking statements are based on assumptions that Nakamoto believes to be reasonable but that may not prove to be accurate. Any forward-looking statement speaks only as of the date on which such statement is made, and Nakamoto does not undertake any obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Nothing contained herein constitutes an offer to buy or sell securities of Nakamoto or any other party, nor does it constitute a solicitation of any proxy or vote. Past performance is not indicative of future results.
