A quarterly-reporting reserve met a week that removed 14.75% from ETH
Should the treasury keep ETH at its current share of reserves, cut it to the amount it can absorb before the next quarterly report, or move the difference into a less volatile reserve asset?
The market facts are real; the decision maker is illustrative.
The week and the position
In the week of 1 July 2024, ETH fell 14.75%, from 3,438.16 to 2,931.00, with a 25.44% range and 69.7% annualised realised volatility. It closed in the lower third of its range, 27.95% below its 52-week high, after three of the four prior weeks were down. The worst day was -7.15% on 4 July and the largest hourly move -5.35% early on 5 July, while 8-hour funding stayed slightly positive. Volume was below its prior 12-week average. An illustrative treasury holds ETH as a reserve and reports results each quarter.
Judgment
A reserve that is reported quarterly must survive whole weeks between reports, and this week showed the reserve can lose 14.75% in one, with a 5.35% hour inside it. Keep only the ETH share that the treasury could still fund obligations from after another week like this one, and move the rest into a reserve that does not swing on 8-hour cycles. Accept that this caps any recovery the ETH portion might have shown.
What would change it
If ETH closes back above the week's open of 3,438.16 and stays there through a full reporting quarter, the share can be reviewed. If the treasury's obligations are themselves denominated in ETH, the cut applies only to the portion covering non-ETH obligations.
What sets this case apart
The decision is reserve sizing against a reporting calendar, not a forecast; the constraint is the gap between quarterly statements and daily moves.