Capping crypto exposure at 20% of liquid assets

Noisebridge will never maintain more than 20% of it’s total liquid assets (cash and equivalents) in crypto currency.

This check will be assessed quarterly (in line with fiscal quarters) and balances greater than 20% would be liquidated.

I am suggesting this in light of the $156,000 BTC donation from Kraken. Which brings our BTC to more than 50% of our current assets.

20% will be a maximum number, and not a target number. i.e. if we increase cash balances we will not buy crypto to maintain that ratio. It is just a measurement of our maximum acceptable risk.

See draft Consensus item:
https://www.noisebridge.net/wiki/Draft_Consensus_Items

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I am proposing this as a consensus item - but I’d like to point out that it may actually be a legal requirement of maintaining our 501c3 as well. I’m doing more research on that one. But it falls under the category of speculative investments.

The big difference could be between “Speculative investing” and “taking donations in the form of investments”. Checking with legal counsel on that one.

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Not that I mind, but I’m wondering where the 20% magic number comes from? Is it just a relatively-low percentage, or is there some significance to it? (e.g. legally)

The 20% is totally arbitrary and open to change.

I strongly support this. If anything, I would decrease the max to 10%.

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Since this is going toward operational expenses and a war chest for a real estate transaction, I would target … zero. Suggestion: if NB wants to hold securities there should be a separate endowment account.

As noted above, this isn’t a target number; it’s a maximum. You can (and probably should) target 0, while allowing flexibility to have up to 20% on hand if needed.

Having a maximum at 0 would require cashing out at every single small donation, which is impractical and expensive. It would require large donations (above 20% of the total banked value) to be at least partially cashed out immediately, but allow flexibility for smaller donations.

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I also support this “rebalancing” of our crypto portfolio.
I suggest we sell our windfall weekly or monthly to average the price over the months.

Keeping 20% is fine for me as crypto is still an interesting investment.

Since we do rather have a lot of liquid cash it may also be worth considering some safe investments that net more than a 2% CD.

Even if we have the bank invest it for us to avoid conflict of interest.
The money earned from the investment can help pay for rent, or simply (hopefully) compound.