Introducing the Pearl Bitcoin Fund
As the first tax-free Bitcoin fund, Pearl BTC allows accredited investors to reinvest capital gains into Bitcoin and eliminate future capital gains taxes—through the same IRS-backed strategy we’ve used to build lasting investor value across our prior funds. Below you’ll find answers to common questions.
Frequently Asked Questions
-
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.
-
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 and explicitly approved by the IRS. There's no regulatory gray area to navigate—we're simply implementing a legitimate tax incentive program as intended.
-
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. This flexibility is unusual for long-term investment vehicles and gives investors greater control over their capital when circumstances change.
-
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.
-
Unlike speculative crypto funds, the Pearl Bitcoin Fund employs institutional-grade security and compliance measures. Your investment is protected through regulated custodians like Fidelity, with comprehensive auditing and transparent practices. We implement a straightforward "buy and hold" strategy focused on long-term value creation rather than complex trading tactics.
-
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.
-
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.
-
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
-
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
-
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)
See If You Qualify
Interested in investing in BTC tax-free? Answer the following questions and if you meet the IRS’s requirements our team will follow-up with a video conference call