Ethereum

Ethereum Foundation Calms Bearish Concerns, Explain Reason For $94 Million “Selloff”

Published

3 months ago

August 25, 2024

A member of the Ethereum Foundation has recently addressed investors’ concerns following a massive ETH transfer by the non-profit organization on Friday. This development is particularly important as this transaction sparked bearish talks in the crypto community especially due to EF’s association with the Ethereum network.

$94 Million ETH Transfer Not A Selloff – Ethereum Foundation

On Friday, the Ethereum Foundation deposited 35,000 ETH, valued at $93.8 million, on the Kraken exchange leading to much speculation among ETH. These concerns stemmed from the bearish nature of such massive transactions as well as the role of the EF in the Ethereum ecosystem.

Described as a non-profit organization, the EF claims a critical role in sponsoring technological development of the Ethereum network. Therefore, a sudden ETH offload of this size is bound to draw attention from investors and general market enthusiasts.

In an X post on Saturday, Aya Miyaguchi, Executive Director of the Ethereum Foundation, explained the recent transaction stating it was not “equal to a sale” but rather a process in managing the organization’s treasury. Miyaguchi claims the ETH deposited on Kraken was swapped for fiat to settle certain obligations. The EF director also attributed the massive ETH withdrawal to a previous constraint on treasury activities due to regulations-related issues.

Miyaguchi said:

EF has a budget of ~$100m per year, which is largely made up of grants and salaries, and some of the recipients are only able to accept in fiat. This year, there was a long period of time when we were advised not to do any treasury activities due to the regulatory complications, and we were not able to share the plan in advance.

Prior to this 35,000 ETH transfer to Kraken, the EF had been offloading significant quantities of ETH in 2024, which stood at 2,516 ETH for $7.4 million DAI. Aya Miyaguchi has stated that the Ethereum Foundation will maintain this constant ETH selloff in a “planned and gradual” manner.

ETH Price Overview

According to data from CoinMarketCap, ETH currently trades at $2,748 with a slight gain of 0.63% in the last day. The second largest cryptocurrency is currently stuck in a range-bound market between $2500 – $2800. If ETH bulls can establish market control, the altcoin may break upward from this consolidation with its next major resistance set at $3560. However, a reverse scenario could result in massive selling pressure driving Ethereum’s price as low as $2100.