Ethereum Foundation Confirms Selloff Reason; ETH Price Surge At Risk?

Kelvin Munene Murithi
August 24, 2024
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Ethereum Coins

Highlights

  • Aya Miyaguchi confirms 35,000 ETH transfer to Kraken is for planned treasury activities, not immediate sale.
  • ETH climbs 4.5% despite large foundation transfer, reaching a $2800 resistance amid market recovery.
  • Despite market fears, Ethereum Foundation maintains over $840M in ETH reserves, planning gradual sales.

The Ethereum Foundation’s Executive Director, Aya Miyaguchi, has addressed the community’s concerns following a significant transaction involving the transfer of 35,000 ETH, valued at approximately $94.07 million, to the crypto exchange Kraken. This transaction raised questions and sparked discussions regarding the Foundation’s financial strategies and potential market impact.

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Ethereum Foundation Reveals Selloff Reason

Aya Miyaguchi clarified that the transfer is part of the Foundation’s ongoing treasury management activities. The Ethereum Foundation, which manages a budget of around $100 million per year, uses these funds primarily for grants and salaries. However, not all recipients can accept cryptocurrency payments, necessitating fiat conversions. 

This year, the Foundation faced regulatory complications, resulting in a delay in executing any treasury activities. The advisory against moving funds during this period prevented the Foundation from sharing its plans in advance.

Miyaguchi emphasized that this transfer does not equate to an outright sale. Instead, it marks the beginning of planned and gradual sales, aimed at maintaining the Foundation’s financial health while minimizing market disruptions. Despite these reassurances, the transaction still fueled speculation and concerns within the community, particularly about its timing and transparency.

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Community Concerns Over Transparency and Communication

The Ethereum foundation’s lack of prior disclosure about such a large transaction has sparked criticism from the Ether community. Many members expressed frustration over the Foundation’s absence of regular financial updates, arguing that better transparency could prevent unnecessary market speculation and fear, uncertainty, and doubt (FUD). 

Calls for quarterly reports detailing expenses, expected sales, and other financial activities have been growing louder as the community seeks more consistent communication from the Foundation.

In response, some community members suggested that the Ethereum foundation establish a dedicated communication team to manage such announcements and provide timely updates.

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ETH Price Outlook Amid Market Movements

The market has been closely monitoring the Foundation’s recent actions, particularly in light of the ongoing recovery in the ETH price. Transferring such a large amount to Kraken raised fears of a potential selloff, which could apply downward pressure on the cryptocurrency’s price. However, ETH price analysis indicates that price has shown resilience despite these concerns, with a 4.5% gain over the past 24 hours, reaching the $2800 resistance level.

The renewed buying pressure in the market has been attributed to broader macroeconomic factors, including Federal Reserve Chair Jerome Powell’s confidence in controlling inflation and the potential for interest rate cuts in the coming months. Nevertheless, the looming uncertainty regarding the Foundation’s future sales strategy and the recent outflows from U.S.-based spot Ether ETFs, which saw $5.70 million withdrawn, could challenge the sustainability of this Ether price recovery.

Looking ahead, the Ethereum Foundation’s approach to managing its considerable cryptocurrency assets will remain under scrutiny. According to data from Arkham Intelligence, the Foundation still holds substantial reserves, including 273,776 ETH and 31,015 WETH, valued at approximately $840 million. 

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.