The Bitcoin Foundation reported a $4.6 million loss in the past ten months, mostly due to increasing monthly expenses on conferences and the tumbling price of bitcoin. According to Founding Director Jon Matonis, most of the funds that weren’t spent on core development were used to fund conferences for the bitcoin community.
In the previous year, tax documents showed that employee compensation, conference costs and legal fees as the largest expenditures. In 2013, The Bitcoin Foundation had been spending around $150,000 each month.
The Bitcoin Foundation Losses
Documents for 2014 haven’t been made available yet, but Matonis was readily available for comment and responded to questions on forums. Matonis pointed out that they keep 90% of their assets in bitcoin, which probably explains the huge losses chalked up for the previous year.
“There is no funny business,” assured Matonis. As with other companies holding bitcoin in the past few months, significant losses were made when price tumbled all the way below $300 this year. Matonis also gave a number of reasons for the huge loss in capital:
- $4.6m based on March 2nd, 2014 valuation ~$673/BTC because books completed up until that time (of course, if you go back to December 2013, the BTC price was even higher)
- Average Bitcoin Foundation expenses for 2014 of approximately $150k per month
- Approximately 90% of assets maintained in BTC as determined by board of directors
- Foundation raised in nominal terms approx. $500-650k in membership dues and donations during its existence (price appreciation got us to where we were at the time)
- January 1, 2015 exchange rate ~$264/BT
- $0.6m (balance remaining at Bitcoin Foundation on January 1, 2015)
The group is said to work on realignment in the next few months, as they’d probably have to start operating at less than $150,000 per month. In his presentation at the Inside Bitcoins NYC event, Executive Director of the Bitcoin Foundation Bruce Fenton shared that The Bitcoin Foundation no longer financially supports the three core developers that it was supporting previously, Cory Fields, Wladimir van der Laan and Gavin Andresen, who are now being supported by the MIT.