Messari Daily Brief March 18, 2021: Crypto Balance Sheets

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Every bull market I feel compelled to warn fellow crypto entrepreneurs not to inadvertently turn themselves into hedge fund managers by managing a too-large crypto treasury.

The time to stockpile crypto with a small percentage of your balance sheet tends to be in the depths of crypto winter and then the gradual resurgence, not after 5x market gains in three months, once the symmetry of crypto investments balances to the upside and the downside (50% dip and surge seem equally likely).

Last year, we put a modest amount of BTC & ETH on our balance sheet as a "bull market hedge” after it became clear that COVID was bad, but not Spanish Flu bad. We wanted to ensure we captured market upside in the event of a bull run, so that we could ramp hiring without taking on additional dilution if the markets were going nuts. Lo and behold, subscription growth plus crypto appreciation has our balance sheet up from March 2020.

That isn’t hypocrisy: our balance sheet risk was about 5-10% of our current account last year, and we took gains on the way up to fuel hiring. Today looks a LOT different than one year ago when you look at the forthiness meter. I wouldn't recommend companies keep an outsized position of crypto on their balance sheets other than a small hedge. (Don't throw it all on black in the casino when you're trying to build a business.) On the other hand now *is* a good time to take investment on favorable terms if your company is healthy and you’ve got a good story.

We're continuing to scale Messari, with three sr. engineering hires, a head of sales, head of marketing, and a bunch of new analysts joining the fold in the past six weeks. I’m not sure we would have hired as aggressively had we not taken the bull market hedge. Something for newer companies to consider for the (inevitable) next cycle.

P.S. We're still hiring...a lot. https://messari.io/careers

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