A -17.11% reserve drawdown meets a quarterly mark it could lock in by selling
Should the treasury sell part of its ETH reserve before the quarter closes to lock in a smaller reported loss, or keep the reserve intact and carry the mark into the new quarter?
The market facts are real; the decision maker is illustrative.
The week and the position
In the week of 16 December 2024, ETH fell 17.11%, from 3,959.09 to 3,281.83, with a -6.84% day on Wednesday and a low of 3,101.90 on Friday. The week's return ranked in the 6th percentile against 357 weeks of history, trading volume ran at 1.83 times its prior 12-week average, and the close sat in the lower third of the range. ETH also underperformed BTC by 8.23 percentage points. Perpetual funding stayed mildly positive, averaging 0.009% per eight hours.
Judgment
Selling now converts an unrealised loss into a realised one at the low end of the week's 32.43% range, in a week that ranks among the worst 6% of 357, without changing the reserve's role. Keep the reserve intact through the report. Cut the mark's volatility separately: a short perpetual hedge of part of the holding lowers the reported swing and is paid, not charged, while funding stays positive at 0.009% per eight hours. Size the hedge to what the quarter-close mark can bear, not to the full holding.
What would change it
If funding turns negative, the hedge starts costing money and should be unwound. If a known obligation requires ETH within the coming quarter, the reserve should be trimmed to that obligation regardless of the reporting date.
What sets this case apart
The treasury separates the reserve decision from the reporting decision, using positive funding as the lever rather than selling the asset at the bottom third of its range.