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Thoughts on Treasury Management for ICO Companies


Thoughts on Treasury Management for ICO Companies

Any of you who have run a traditional business will recognize the need for TMS or CMS services. This stands for Treasury Management (or Cash Management) services.

When you have a traditional business that has either A- been well funded, or B- is successful with cashflow, you will most likely end up with a substantial balance in your bank account. It is in this scenario, that the TMS services come up. One might set up a sweep account where money is moved out of you account at night and into another account earning interest.

There are many situations, but one you DON’T have to worry about… waking up in the morning and having your account drop by 10%. Or, waiting a month, and having your account balance down 30%.

In the world of crypto, this scenario is entirely likely.

Let’s say you were successful and raised $5MM in BTC or ETH in 2017. You would have gone to sleep with an account balance of $5MM, and possibly woken up the next day with a balance of $5.5 Million. That is an INCREASE of $500,000!

It was a weird world where the amount you raised continued to increase. What a great world to live in…..until it isn’t! With most of this year (2018), the entire crypto market as a whole is down 50-99%. This creates an entirely different dilemma for an ICO company that was successful raising funds- a “declining” balance”.

As a business owner, and one looking to be judicious with contributions and cash flow, this poses quite a situation.

What should Your Crypto TMS strategy be?

If you are a company that has monthly cash flow needs- let’s say your burn rate is $50,000 per month. That means for the quarter or three months, you would need $150,000 in fiat or cash in your account.

If you are holding the majority of your funds in Crypto, then means you have to decide when to “convert” the crypto to fiat. That decision is complicated by the massive fluctuations in crypto, and the timing when the company received their initial contributions.

Here is an example:

We have taken in Ether (ETH) for the ICO. A considerable amount of that was at or above $900.

From a business decision, as it relates to holding or converting all to fiat–what would you do?

  1. Hold ETH hoping it goes back up to level $900+
  2. Set a target and sell all at that level?
  3. Sell all now under the belief ETH will continue to drop and not recover?

I’m personally leaning toward #3 as ETH has shown structural flaws and there are EOS and others which are coming online with more scale. However, I’m curious about others who are in the same situation (with ETH contributors) and in the space and have an input for strategy.

As companies move forward, and if they are successful with the ICO model (which I will have a different article on before long, as I’m curious how long it will last), this situation decision on crypto conversions becomes more paramount.

When the markets are moving up, it’s an easy solution. When the markets are in decline, well that’s when the real decisions need to be made.

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CEO & Founder of Moneta Pro, Inc and MagMo



  1. Pingback: Thoughts on Treasury Management for ICO Companies – The Crypto News

  2. gate io borsası

    May 4, 2023 at 9:55 PM

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