Ethereum Foundation Raises Selloff Concerns By Unstaking $50M ETH

The Ethereum Foundation rattled the crypto market by unstaking about $50 million worth of ETH on Monday, May 11. It sparked concerns of a potential selloff owing to the organization’s previous transfer trend.

Ethereum Foundation Unstakes Over $49M In ETH

On-chain data from Arkham Intelligence shows that the Ethereum Foundation has cashed out 21,271 ETH worth of nearly $49.66 million from its Ethereum staking positions via Lido. The transfers took place in several transactions that each had an estimated value of around $2.3 million.

As per blockchain records, each batch had approximately 811 wrapped staked ETH (wstETH) from the crypto staking platform. During unstaking, these assets have been deposited into Lido’s unstETH contract.

This transfer shifted the Ethereum Foundation’s ETH balance from nearly the top of its reported internal cap of 70,000 ETH, to roughly 52,965 ETH. Almost $50 million worth of ETH was also re-liquidated in the organisation’s treasury wallet.

According to data from Arkham Intelligence, the transfers were not necessarily due to an immediate market sale, but rather related to treasury rebalancing. The activity was seen as being part of normal management to ensure a liquid environment for ecosystem development and grant and operational costs.

When the queue of withdrawals on Lido is full, the assets will be converted from wstETH to liquid ETH. The amount of funds will only become available once the normal staking platform unlock period has passed.

Earlier, in April, the Ethereum Foundation had unstaked nearly $49 million worth of ETH at the time. It led to similar concerns as of today.

How Did The ETH Price React?

However, the ETH price remained unresponsive to the withdrawal and hovered near $2,300. Experts believe that traders seemed to read the adjustment as a routine treasury adjustment, rather than an indication of notable selling pressure.

Being among the largest long-term holders on the Ethereum network, the Ethereum Foundation has been the subject of interest whenever it moves significant portions of ETH. To yield the ecosystem initiatives, the organization has started staking ETH since mid-2015.

The staking balance of the firm jumped massively this year. It rose from just above 2,000 ETH in February to nearly 70,000 ETH before the recent withdrawal.