Ethereum Foundation representatives are once again conducting large transfers of ether. Why is this necessary?
In 2020, the Ethereum Foundation sold more than 100,000 ETH, but at that time, the increase in the supply of coins on the market did not cause a rapid fall in the value of ETH. On the contrary: its price rose by more than 500 per cent in the next few months. According to the Arkham Intelligence platform, EF representatives again conducted several large transactions this month, which were most likely needed to sell ETH. What to expect from what’s going on?
Ethereum Foundation is an organisation that is dedicated to the development of the Etherium ecosystem. As described on the website, its representatives allocate resources to critical projects, provide value within the Eth project, and support the blockchain outside of cryptonish.
Despite this, EF has already managed to become a meme within the blockchain community. Still, the organisation often conducts large transactions with ether, including selling it at local market highs.
With this in mind, crypto investors often joke about the need to close all their trading positions if the Ethereum Foundation conducts transactions.
One of Ethereum Foundation’s Ethereum wallets
The day before, the organisation conducted an ETH transaction again. However, this time its management explained the action.
Another well-known Ethereum Foundation Efirium wallet.
What is happening with Efirium?
Arkham Intelligence published an overview of the situation on its official Twitter page. Here is the relevant statement on the matter.
As we know, Ethereum Foundation sold coins at the market peak in May and November 2021. However, they sold 100,000 ETH in 2020 just before the altcoin’s price rose nearly six times. Last night, they sent another 35 thousand ETH worth $95 million to Kraken. Did they get a successful transaction for themselves this time?
The transaction was carried out on Friday evening. Accordingly, Arkham analysts shared their conclusions about the weekend's developments.
Etherium creator Vitalik Buterin
Arkham’s information shows that on 17 December 2020, the Ethereum Foundation sold about 100,000 ETH worth approximately $63 million at a price of $635. Five months later – on 12 May 2021 – the price jumped to a new high of $4182. Well, on 10 November of the same year, it hit a cycle high around $4,878.
Unlike Bitcoin, which in this cycle for the first time was able to set a new record for the price value before halving, Efirium did not even come close to its historical maximum. So far, its local high from 12 March 2024 turned out to be the $4093 line. That said, today the ETH exchange rate is 44 per cent behind the record.
Daily chart of the ETH Efirium rate
That is, that time the organisation failed to guess with a good timing of the transaction. If the transaction had been carried out just a few months later, the amount of funds raised by Ethereum Foundation would have been five times more.
Now – on 23 August – Ethereum Foundation representatives have transferred 35 thousand ETH to an address presumably belonging to the Kraken trading platform. According to Cointelegraph’s sources, this transaction could well be regarded as a coin sale.
Ethereum Foundation transactions on the chart of Efirium
However, this assumption does not correspond to reality. Ethereum Foundation executive director Aya Miyaguchi said that the transfer was part of the financial distribution process. Here’s a rejoinder to that.
This is part of our balance sheet management activities. Ethereum Foundation has a budget of about $100 million a year. It consists mostly of grants and salaries, while some of these recipients can only accept traditional currency. There was a long period this year when we were advised not to engage in treasury activities due to regulatory complexities, and we were unable to share our distribution plan in advance. This transaction does not amount to a coin sale.
The price of ETH has been largely stable over the past few days. Accordingly, the transaction had no impact on the cryptocurrency’s exchange rate. In addition, over the last week, the value of Etherium grew by 3.6 percent.
Analysts recall that just a month ago, a wallet associated with the Ethereum Foundation transferred about 92,000 ETH worth more than $253 million to an unknown address. This address has not been active for seven years, and EF employees have not yet publicly explained the reason for the transaction.
Transferring funds from the Ethereum Foundation wallet a month ago
Ethereum Foundation is not the only major organisation that conducts large-scale transactions with this cryptocurrency. In particular, today representatives of Amber Group sent 6443 ETH equivalent to $17.62 million to Binance and Kraken.
The latest transactions with ETH Efirium from Amber Group
The same goes for the Cumberland platform. Today, its employees transferred 6,439 Ether to Binance worth 17.66 million.
Latest Ethereum ETH transactions from Cumberland
It seems that Ethereum Foundation employees did not sell the cryptocurrency this time. However, sooner or later another transaction will still take place - and you should be ready for such a thing. However, as the previous operations of the organisation have shown, not all EF transactions with crypto can be considered successful.
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