Tackling the Current Market Conditions

finance

#1

Many people have approached me with the concern about the current development of ETH/USD price which hit a low of USD 120 today. I believe, everybody of the Status Team very much shares this concern, and within it, also the Founders, Nabil, the Finance Team and I share it. We all care about ensuring the long-term success of the project, delivering the best product to the community, and being loyal to crypto. We also very much care about providing the financial protection and freedom to the contributors and their families.

Status can rely on a large ETH reserve, and its fiat buffer is in an appropriate condition to provide for leeway to work on solutions should the market conditions worsen. While we rely on this buffer, we are continuously monitoring the situation and working on possible solutions to optimize. Please feel free to reach out to me if you have any suggestions or questions.


#2

Would it help to lock up our ETH in DAI (and hope it doesn’t settle) ?


#3
  1. Use a slightly more conservative asset diversification strategy, as informed by volatility and basic portfolio theory. Communicate this publicly and why we are doing this (to avoid fake news re using up ETH assets). The “ETH 800 means we rebalance X%” (or whatever slide said) seems a bit naive and short-sighted to me, not grounded in current objective numbers, even we are all obviously bullish on long-term ETH upside. DAI is one easy way but this also opens up to systemic risk (global settlement), perhaps there are better hedging options that are less correlated (gold?).

  2. Change compensation for core contributors to basic income in fiat and do everything else in variable crypto. I realize this is drastic and unlikely to be adapted, but I think this would be more prudent for the sustainability of Status as a whole. It’s a high risk endeavour by its very nature, so I’m skeptical that injecting a ‘false’ sense of security/stability is wise, compared to exposing the volatile beast for what it is.


#4

I’ve mentioned this in the past (most recently in Prague), but have we considered hedging strategies to offset our large exposure in ETH? I don’t believe it is too late to explore this and we could consider alternative asset classes (e.g. traditional FI/MM instruments).

In the short term, i suggest taking advantage of increases in price and selling small portions of ETH when the market is up (like now ~ $138).


#5

I found this blog post to be quite interesting - https://offthechain.substack.com/


#6

To start hedging now when the market is on a yearly low point ($100 - $138), would seem like panic selling - and offer equal risk as not hedging (ie. what happens if the price increases drastically and your crypto is stuck in fiat?). If a hedging strategy was to be deployed - please just wait for some stability to settle in / just my 2wei


#7

As I write this, ETH is down to $105. While I have no particular expertise in, for example, portfolio theory, I’ll at least point out that there’s no obvious floor for any of these cryptocurrencies. “Technical” analyses involving support/resistance have limited predictive power at best. Postulating some cycle within which we’re supposedly at some low point, similarly.

I don’t know, but no one reading this does either, what price ETH will have next week or next month, with regard to either positive or negative movement.

It’s not just ETH – https://coinmarketcap.com/ shows basically everything but Bitcoin SV and Tether extremely correlated, so to the extent it goes up/down, it’s at least a whole-market issue, and ETH should retain at least some value.