The price of Ethereum increased by more than 500% in the months that followed the Ethereum Foundation’s 2020 sale of 100,000 ETH. It’s impossible to predict what will occur this time.
Blockchain tracing company Arkham Intelligence claims that the price of Ether has increased by more than 500% in the months following a significant ETH sale by the Ethereum Foundation, but it’s impossible to predict what will happen this time.
The top was infamously sold by the Ethereum Foundation in both May and November of 2021. However, Arkham stated in a post on X on August 25 that they sold 100,000 ETH in 2020, just before ETH exploded six times.
It occurs on August 23 at 5:26 p.m., when the Ethereum Foundation sent about 35,000 ETH, or $96 million, to a wallet recognized as a Kraken exchange deposit address.
According to Arkham’s statistics, on December 17, 2020, the Ethereum Foundation sold approximately 100,000 ETH for a price of about $635, which was worth approximately $63 million at the moment.
On May 12, 2021, five months later, the price spiked to a high of $4,182. On November 10 of that year, it reached a cycle high of $4,891.70.
They delivered an additional 35K ETH worth $95M to Kraken last night. Was it done correctly this time? Arkham hypothesized.
The Ethereum Foundation clarifies the 35K ETH transfer
Aya Miyaguchi, executive director of the Ethereum Foundation, clarified on X that the transfer was a part of “treasury management activities” in response to rumors surrounding it.
Miyaguchi stated in an X post that the transfer was not “equal to a sale” and was done so in order to help balance the books.
The Ethereum Foundation has an annual budget of $100 million, which includes grants and wages, according to Miyaguchi. However, some of the organization’s services are only available in exchange for fiat money.
“Due to regulatory complications, we were advised not to do any treasury activities this year for an extended period of time, and we were unable to share the plan in advance,” the spokesperson stated.
For the past several days, Ether’s price has been largely constant. Ether was at its lowest on August 24 at about $2656, but it shot up to $2,808 the next day and settled at about $2,743 on August 26.
This most recent transfer occurs one month after about 92,000 ETH, or more than $253 million at current rates, were sent to an unidentified wallet from a wallet connected to the Ethereum Foundation.
The address had not changed in seven years up until that point, and the organization has yet to disclose publicly who was in charge of the transfer or why.
Another significant transaction by the Ethereum Foundation involved sending around $30 million in Ether to Kraken on May 6, 2023.
The price dropped 4.8% to $1,900 during the day, but it was insignificant given the broader trend of recovery at the moment.
The Ethereum Foundation reportedly still has over 273,000 Ether, which is currently valued at about $751 million, according to Arkham.
The Most Recent ETH Transfer from the Ethereum Foundation Raises the Question: Will History Repeat Again?
The Ethereum Foundation recently moved 35,000 ETH, or around $96 million, to a wallet connected to well-known cryptocurrency exchange Kraken, a move that has the interest of both market observers and cryptocurrency fans. This move has drawn parallels to a momentous historical occurrence: a comparable transfer that occurred in December 2020 and was preceded by a sharp increase in Ether’s value.
A Historical Parallel
The Ethereum Foundation raised approximately $63 million by selling 100,000 ETH in December 2020 at a price of about $635 per token. The price of Ether surged to $4,182 in just five months, a startling increase of more than 500%. Ether experienced a further upsurge, hitting a cycle high of $4,891.70 in November 2021.
In a recent post, blockchain tracing company Arkham Intelligence emphasized this historical parallel by pointing out that the Ethereum Foundation’s prior big sale occurred in tandem with a sharp price spike. They are now wondering if the most recent transfer indicates that another spike is coming soon or if the market will move in a different direction this time.
The Recent Transfer
Following the recent transfer of 35,000 ETH to Kraken by the Ethereum Foundation, there has been a surge in conjecture. The Ethereum Foundation has offered an alternative viewpoint, despite Arkham’s analysis showing a clear correlation between previous transfers and price increases.
The executive director of the Ethereum Foundation, Aya Miyaguchi, emphasized on X (formerly Twitter) that the recent transaction is a normal component of treasury management operations. Miyaguchi asserts that the transfer was not the same as a sale and was done in order to help the foundation’s books balance. The $100 million annual budget of the Ethereum Foundation is used for grants and wages; in order to fulfill its responsibilities, it occasionally needs to convert ETH to fiat money.
Market Reaction and Analysis
The market is keeping a careful eye on the issue notwithstanding Miyaguchi’s assurances. As of late August 2024, the price of ether has been comparatively constant, hovering around $2,743. However, concerns over possible market effects are being raised by the latest transfer. Some have speculated that the Ethereum Foundation’s most recent action could be a precursor to another substantial price change because historically, the foundation’s major ETH movements have coincided with market swings.
To further compound the mystery, the Ethereum Foundation transferred over 92,000 ETH, or more than $253 million at current rates, to an undisclosed wallet one month before this most recent transfer. Another degree of mystery and conjecture was added by the fact that this was the wallet’s first notable movement in seven years.
Looking Ahead
Roughly 273,000 ETH, worth approximately $751 million, are still held by the Ethereum Foundation, offering a significant hedge against market volatility. It’s unclear if this most recent shift will cause prices to rise significantly once more. The cryptocurrency markets are infamously erratic, and although past trends might provide valuable information, they are not infallible predictors of future outcomes.
For the time being, experts and investors will be closely monitoring the swings in Ether’s price as well as the actions of the Ethereum Foundation. The market’s reaction in the upcoming weeks will be shaped by a confluence of historical tendencies, present market circumstances, and ongoing events.
Conclusion
The cryptocurrency community has undoubtedly been captivated by the Ethereum Foundation’s most recent ETH transfer. Even while the historical setting offers a fascinating backdrop, it’s important to evaluate these events critically. Making wise selections in the realm of cryptocurrencies always requires thorough research and an understanding of market dynamics.
As this narrative develops and the effects of the Ethereum Foundation’s efforts are assessed further, stay tuned for additional developments.
