Thoughts on ICO treasury management →

November 25, 2018

Me, writing for Liquid:

Project A still has ~75% of the ETH raised from its ICO. During the ICO, this 224,419 ETH was worth ~USD83 million. At the height of 2017’s bull market, this ETH was worth ~USD269 million. Today, this portion is worth ~USD37 million.

Maintaining 75% of a company’s treasury holdings in an extremely volatile asset can lead to problems. If a company’s initial business plan and expansion plans were based on an initial funding figure, it can then be difficult for that company to execute this plan after losing a significant portion of treasury value due to the volatility of cryptocurrencies.

The research process for this post was extremely eye-opening, and I now realize exactly why so many projects in the blockchain space will ultimately die.

  • ICO projects that raised $X seem to be doing just fine with $0.25(X). It makes you wonder how the original $X goal was budgeted if a 75% drop in treasury value seems to have zero effect on business operations.
  • ICO executives willingly chose to speculate with money from investors. Aiming for 0.2% gains in conservative money market accounts is okay, but holding multi-million (occasionally billion) dollar positions in highly volatile digital assets is irresponsible and greedy.
  • ICOs who concluded their sales at the top of the bull market and held through the crash are most likely REKT. With the market’s current low liquidity and high price slippage, ETH liquidations are going to suck.

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BitMEX is terminating US-based accounts →

November 22, 2018


While BitMEX officially doesn’t provide service to the US investors, they were known to turn a blind eye to those that found their way to the exchange. However, things might be starting to change, as the exchange seemingly started terminating US traders’ accounts. One such report came from famous investor Tone Vays.

The United States SEC has made quite a few moves lately, so I’m not surprised to see BitMEX take this precaution. It makes me wonder if Binance, an unregistered exchange that allows users to withdraw up to 2 BTC per day, will be next to close off services to US-based users. On a side note, I highly recommend Liquid if you’re looking for a compliant exchange — plenty of liquidity on major JPY pairs, open to US citizens, and audited by Japan’s FSA.

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