“A lot of crypto investors are bullish on it and are holding on to it to go to the moon,” said Larry Cheng, managing partner at Volition Capital, which invests in early-stage financial technology companies. That is why some owners of cryptocurrency would rather not donate it to a charity. Of course, the value of Bitcoin or another cryptocurrency could just as easily skyrocket. But he said, ‘I guarantee that at the end of the day you’ll get $5 million whether it’s in Bitcoin or something else.’”
“So the donor and the university agreed that he would backstop it. “Our policy had been to traditionally sell everything immediately, even if it had been $5 million in stock,” Mr. The donor wanted the university to hold at least some of the donation in Bitcoin, but the issue of what would happen if it plummeted in value had to be resolved. At the same time, the donor wanted the money to fund research and programs at the Stevens Center for Innovation in Finance at the Wharton School. The donor wanted it to be large enough to attract attention that would help the university get similar donations. The $5 million Bitcoin gift in May was more complex. “Lo and behold, we had just put this in place,” Mr. Shortly after, it received $25,000 in Ether from a young alumna who wanted the gift to go to the general scholarship fund. Penn had contracted with NYDIG, a platform that manages digital currency transactions, only at the start of this year, Mr. It simplifies the task of sending the money to a particular country, and the underlying blockchain technology can enable the organization to track exactly how the cryptocurrency is being used. It is also true that a donation in cryptocurrency can be more convenient for an international aid organization. (Cryptocurrencies that are worth $5 million today may be worth $3 million or $7 million just next week.) That increases the risk for the recipient, and it may make it more difficult for the donor to commit to a fixed amount. Bitcoin, Ether and other cryptocurrencies have many of the qualities of publicly traded securities: For the recipient, the value is easy to know, and for the donor, any gains that would have been subject to tax are erased when the asset goes to charity.īut cryptocurrencies have been a lot more volatile than almost any single stock.
Cryptocurrency, as an asset to donate to charity, is as complicated as the asset itself and the reasons for owning it.
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