What This Strategy Does
Long Bitcoin holds a directional long BTC position through perpetual contracts on supported perp DEXes. The vault deposits USDC as margin and opens a long BTC-PERP position. When BTC goes up, the vault’s NAV increases. When BTC goes down, NAV decreases. This is a directional strategy. No hedging, no second leg, no delta-neutral structure. The vault is long BTC.How It Earns Points
The long BTC position carries open interest on the exchange where it is held. That open interest generates exchange points over time. Because this is a single-leg strategy (long only, on one exchange), it earns fewer points per dollar of vault capital compared to a two-leg strategy like funding arb. The credit rate reflects the strategy’s OI on the exchange. Larger vault size means a larger position, more OI, and faster credit accrual.The Pitch: Cheapest Place to Long BTC
If you are going to hold a long BTC position anyway, doing it through ArcX means you also earn exchange points. Those points have value. The net effect: your cost of holding a long BTC position is subsidized by points earnings. Example. You deposit $100 into the Long Bitcoin vault. The strategy opens a long BTC-PERP position. Over the epoch, BTC rises 5%, so your ST is worth $105 at redemption. You also earned EPT that accrued credits throughout the epoch. If you sold that EPT on the EPT/USDC orderbook at deposit time for $0.03, your effective entry was $97 instead of $100, a 3% subsidy on your long position. Alternatively, you keep both ST and EPT. You get the BTC upside through ST and the points exposure through EPT. The points are a bonus on top of your directional trade.What EPT Holders Care About
EPT on the Long Bitcoin strategy earns fewer credits per dollar than funding arb EPT, because there is only one position leg generating OI instead of two.| Factor | Why It Matters |
|---|---|
| Open interest | Single-leg OI means lower credit rate than a dual-leg strategy. |
| Points value at TGE | If the exchange’s points end up being highly valued, even lower-rate EPT can be worthwhile. |
| EPT price on orderbook | Lower credit rate should mean lower EPT price. If the market prices this correctly, the return per dollar can still be attractive. |
| Epoch duration | Same as any strategy: longer epochs and earlier entry mean more credits. |
What ST Holders Care About
ST on the Long Bitcoin strategy is a directional bet on BTC. This is different from funding arb ST, where NAV moves based on funding income.| Factor | Why It Matters |
|---|---|
| BTC price | NAV moves directly with BTC. If BTC rises 10%, NAV rises roughly 10%. If BTC falls 10%, NAV falls roughly 10%. |
| Entry price | Buying ST at a discount on the ST/USDC orderbook provides a buffer. A 5% discount means BTC can drop 5% and you still break even at redemption. |
| Epoch duration | Longer epochs mean more time for BTC to move. This cuts both ways. |
| Funding costs | Holding a long perp position may cost funding if funding rates are positive. This drags on NAV over time. |
Risk Profile
This is a directional strategy. The risk profile is different from delta-neutral strategies.| Risk | Description |
|---|---|
| BTC price decline | NAV falls when BTC falls. ST holders have full downside exposure, floored at $0. |
| Funding drag | If funding rates are persistently positive, the strategy pays funding on its long position, reducing NAV over time even if BTC price is flat. |
| Exchange risk | The position is held on a third-party perp DEX. Smart contract risk, downtime, or liquidation engine failures on the exchange affect the strategy. |
| Liquidation risk | In extreme drawdowns, the position could approach liquidation. The strategy manages margin to prevent this, but tail risk exists. |