Ethereum Foundation reportedly sells close to $700 million worth of ETH
The recent action taken by the Ethereum Foundation has sparked intrigue in the cryptocurrency market. Approximately $654 million worth of Ethereum (ETH), equivalent to 160,000 ETH, was transferred to a wallet known for past token sales. This development coincides with a period of diminished demand for Ether Exchange Traded Funds (ETFs) and a prevailing atmosphere of weak investor sentiment.
Arkham Intelligence, an on-chain data firm, unveiled this substantial movement of funds on October 21. The wallet that received the vast sum has a history of sending ETH to various exchanges, including Kraken and SharpLink Gaming. Consequently, speculation has arisen regarding the possibility of the Foundation gearing up for another token sale.
The wallet that received the $654 million has a notable track record for holding significant sums of Ethereum to facilitate token sales in the past. This recurrence has prompted speculation among traders about the Foundation’s intentions for reducing its ETH holdings. However, Hsiao-Wei Wang, the Foundation’s co-Executive Director, clarified that the transfer was part of a “planned wallet migration” conducted for operational purposes and did not involve a sale of assets.
Despite this explanation, the timing of the transaction has generated substantial discussion within the crypto community. It occurred amidst growing concerns regarding the Foundation’s asset management strategies, particularly following recent internal layoffs and restructuring efforts.
Compounding these challenges is the dwindling demand for Ether ETFs, which has resulted in a net outflow of $145 million from USspot Ether ETFs on October 20 alone. Over the last two weeks, these products have experienced a collective loss nearing $500 million in value.
The reduced appetite for ETFs has exerted downward pressure on ETH’s price trajectory. Following a peak of $4,959 in August, the value of Ether has receded to approximately $4,000. Price analysts have identified the $3,900 threshold as a crucial support level, suggesting that sustained strength above $4,100 could signify a bullish trend capable of propelling ETH towards $5,800 in the near future.
A recent factor contributing to internal discord at the Ethereum Foundation was Péter Szilágyi’s resignation as the organization’s former lead developer. Szilágyi disclosed that his total earnings over six years amounted to around $625,000 before tax deductions. His departure was accompanied by criticisms regarding the perceived inequities in compensation for developers relative to Ethereum’s substantial market capitalization of nearly $450 billion during his tenure.
In response to these challenges, the Ethereum Foundation has implemented a series of structural adjustments in recent months. These changes encompass operational streamlining, workforce reductions, and the introduction of novel financial management strategies. The Foundation has also adopted a more cautious approach to liquidating ETH holdings, with proceeds being utilized to support research projects, charitable donations, and decentralized finance initiatives.
While previous token sales conducted by the Foundation typically did not exceed $10 million, the recent transfer of $654 million stands out starkly in contrast. A $42.7 million sale conducted via Kraken last month aimed to fund research and development initiatives but drew criticism from segments of the community for perceived opposition to decentralized finance principles.
Arkham Intelligence’s data indicates that the Ethereum Foundation currently retains control over approximately $827 million in various cryptocurrencies, with the majority allocated to ETH. The Foundation also possesses smaller holdings of Bitcoin (BTC), Binance Coin (BNB), and Arbitrum (ARB).
