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Ethereum co-founder Vitalik Buterin transferred about $10 million worth of Ethereum to a wallet associated with cryptocurrency exchanges in August, according to data tracked by Lookonchain.
Additionally, data from Arkham Intelligence shows that since 2015, Buterin’s Ether address has flowed out of about 422,000 ETH (worth $1.04 billion as of September 1, 2024).Over 840,000 ETH has flowed out of this address over the past two years.
These transfers spark speculation that Butling has been selling its Ether in order to make profits in Ether, especially when the cryptocurrency trades at a 2022 cycle low of $885180% higher.
Still, Buterin denied the allegations.
I have never sold ETH to make a profit since 2018 – Vitalik, August 31, Buterin clarified that he has never sold his Ether to make a profit, noting that all of his own since 2018ETH transfers are all about supporting various projects he believes are valuable, whether within the “Ethereum ecosystem or the broader charity.”
Interestingly, the transfer of August happened simultaneously with the transfer of 84,000 ETH worth over $207 million from the official Ethereum Foundation address to the cryptocurrency exchange.
The culprit of the decline?
The Ethereum Foundation regularly sells some of its holdings to fund development, research and other programs that are critical to the ecosystem.
However, large Ether transfers can sometimes cause short-term market reactions, as investors may interpret it as upcoming selling pressure.
For example, in November 2021, the Ethereum Foundation transferred 20,000 ETH (worth approximately $95 million) to Kraken.
These transfers occurred before the Ethereum price peaked, and its price was subsequently pulled back by 85%, indicating that the Ethereum Foundation’s sale of its Ethereum holdings—regardless of its intention—has led to a decline in the ETH market.
Similarly, in May 2021, the Ethereum Foundation sold 350,000 ETH after the Ethereum market price fell by 50%.
However, not all Ethereum Foundation sales occurred before major market adjustments.
For example, around December 2020, while it sold a huge amount of ETH, Ethereum hit a price increase of 630%.Other factors in the surge in Ethereum prices include the launch of the Beacon chain, which marks Ethereum’s shift to proof of stake, and the U.S. Federal Reserve’s loose monetary policy, which has stimulated demand for risky assets, including cryptocurrencies.
Interestingly, the recent Ethereum sale of Vitalik Buterin and the Ethereum Foundation comes as the Federal Reserve plans to cut interest rates, with outflows of spot Ethereum Exchange-traded funds (ETFs) slowing.
The foundation has no money
According to the latest report from the Ethereum Foundation, the Ethereum Foundation allocated $30 million in the fourth quarter of 2023.In the third quarter of 2023, the Ethereum Foundation allocated $8.9 million.
It has to be said that although Polkadot is facing controversy due to its crazy spending (related reading: Polkadot’s first-half financial report caused controversy: $87 million in spending accounts for nearly half of the promotion fee, and its revenue is only $1.1 million), at least its report isTransparent, can be found.
In addition, if the current annual expenditure rate of US$100 million will be at the Ethereum Foundation, the Ethereum Foundation will run out of ETH in 8 years.If you want to provide longer-term funding for your operations, either ETH prices rise or start staking to earn income.
