The Ethereum Foundation Is Selling ETH Again, Is The Top In?

The Ethereum Foundation, a non-profit organization, has initiated an unexpected ETH sell-off to a single address, prompting speculation about a potential market peak. 

Ethereum Foundation Executes Multiple ETH Transfers

On Monday, March 4, Blockchain analytics platform LookOnChain revealed a series of transactions executed by a wallet address related to the Ethereum Foundation. Sharing a screenshot of the transaction details on X (formerly Twitter), LookOnchain disclosed that the Ethereum Foundation had initiated three ETH transactions to a single wallet address identified as “Cumberland Forwarder”. 

Among these transfers, two involved selling off 500 ETH each, while the third recorded a transaction amount of 0 ETH. At the time of writing the price of Ethereum is trading at $3,684.95 according to CoinMarketCap. This price puts the value of the Ethereum Foundation’s 1000 ETH sell-offs at over $3.68 million. 

It’s uncertain whether this unexpected sell-off indicates a shift in the foundation’s perspective on Ethereum’s current valuation, as the foundation is known for selling ETH tokens during tops. Additionally, the timing of the transfers could be an indication of a peak in Ethereum’s price, which often precedes a significant price correction. 

Including the Ethereum Foundation, there have been other major ETH transfers made by investors. Earlier in January, bankrupt cryptocurrency company Celsius Network initiated a massive sell-off worth about $125 million ETH. Following this large-scale transfer, Ethereum’s price experienced a major decline. 

With the price of Ethereum slowly approaching its peak value, if a similar sell-off phase occurs, it could potentially trigger a shift in market sentiment, pushing investors to opt for other major cryptocurrencies as they attempt to diversify their portfolios and avoid risks. 

ETH’s Price Update

Recently, Ethereum has been witnessing significant gains, driving its price closer to its previous all-time high of $4,379 in May 2021. Notably, the cryptocurrency has been aggressively following Bitcoin’s recent bullish uptrend, reinforcing its position as the second-largest cryptocurrency in the space. 

Various analysts have consistently made bullish predictions about the price of Ethereum, with the majority expecting the cryptocurrency to surge above $5,000 soon. Considering the multiple upgrades and developmental activities ongoing within the Ethereum blockchain, a price surge to $4,000 seems probable. 

In the advent that Ethereum reaches its “top in”, the cryptocurrency may undergo a sell-off phase, as investors seek to maximize profits by cashing out their investments. This could lead to a price reversal, with persistent selling pressures diminishing demand and instigating Fear, Uncertainty and Doubt (FUD) among traders and investors. 

Ethereum price chart from Tradingview.com

Here’s Why The Ethereum Price Fell Toward $1,500

The price of Ethereum has experienced a notable decline following a major Ether sale this week. The unexpected decrease has left the crypto community anxious about the stability of the world’s second-largest cryptocurrency and the long-term effects of the decline. 

Ethereum Price Drops After Large-Scale Ether Swap

On Monday, October 9, the price of Ethereum declined following an extensive Ether swap by the Ethereum Foundation, a non-profit community-run organization dedicated to enabling better human coordination. 

The Ether transaction which took place on Uniswap, a decentralized crypto exchange platform, saw the ETH price drop 5% from its daily high of $1,635 to a local low of $1,553 before recovering once more.

According to Arkham data, the Ethereum Foundation swapped approximately 1,700 ETH worth $2.7 million to a single wallet address which contained almost $400,000 worth of cryptocurrencies and was titled ‘Grant Provider’ by Etherscan.

The specific intentions behind the large-scale swap have not been disclosed by the Ethereum Foundation. However, the Ethereum Foundation, an organization that holds a considerable influential position, regularly swaps large amounts of tokens to fund its operations. 

Presently, Ethereum is trading at a price value of 1589.36 after recovering from the initial decline. The steep decline has left the crypto community worried about the health of the cryptocurrency and whether the price of Ethereum would recover. 

Ethereum price chart from Tradingview.com

ETH Whales Dump $8.5 Billion

The Ethereum Foundation has not been the only large wallet to sell in recent times as other ETH whales have taken advantage of the altcoin’s price. According to crypto analyst Ali Charts on X, ETH whales dumped a whopping $8.5 billion worth of tokens.

This large selling started in February this year and has continued into October. As a result, the whale selling has seen over 5 million ETH sold and redistributed over this 8-month period. The analyst also points out that “this selling trend continues with no current indication of a shift towards #ETH accumulation yet.”

Ethereum price whales

Compared to its all-time high of $4891.70 in 2021, the price of ETH has dropped by more than half and has been struggling to reclaim the $2,000 mark. However, this could present a unique buying opportunity for investors who could see the price decline as ETH being on discount. 

Nevertheless, Ethereum continues to hold its position as the second-largest cryptocurrency in the market with a market cap of $191.5 billion at the time of writing. Over the last day, the altcoin has also seen some recovery, rising to $1,593 as bulls gear up to retest the $1,600 resistance.

Crypto Drug Cartel Ties: On-chain Investigator Drags Ethereum Into The Mess

An on-chain crypto investigator took to social media to expose the supposed black truth behind Justin Sun’s Tron but has thrown Ethereum in the mix, alleging that the cryptocurrency is backed by the CCP and may harbor crypto wallet addresses by Fentanyl traffickers. 

On-Chain Detective Unveils Potential Tron Ponzi Scheme

An X (formerly Twitter) user going by the username @BoringSleuth has gained the attention of the crypto community after uncovering potential evidence of Tron allegedly being a Ponzi scheme governed by one of the world’s largest crypto criminal drug cartels. 

“I showed and told the World that Tron $TRX was a massive Ponzi, run by a part of the largest criminal Cartel in the World, and connected to the CCP,” BoringSleuth said.

BoringSleuth disclosed that the United States Department of Justice (DOJ) has sanctioned eight Chinese Communist Party (CCP) companies for allegedly operating a clandestine drug production and distribution sales network around Fentanyl. 

The crypto investigator revealed that more than half of the wallets owned by these companies were traced back to Tron and the remainder allegedly being on the Ethereum blockchain. 

After analyzing the original sales of the TRX token, BoringSleuth stated that he had reviewed the top 20 cryptocurrency wallets in Tron’s original token sale list to decipher the owners of the wallets and how much TRX supply these wallets have acquired.

According to the investigator, out of the 20 wallets, 17 were created and owned by the infamous criminal organization disguised to represent genuine investors. He revealed that the criminal organization was connected to the CCP, and 98% of Tron’s total token supply was received by these 17 wallets.

The on-chain investigator also mentioned that cryptocurrency exchanges like Huobi Global, and cryptocurrencies like Shiba Inu may also be linked to the CCP and Wanxiang, a Chinese multinational conglomerate and the team that funded Ethereum Foundation wallets and Ethereum’s Founder, Vitalik Buterin. 

Ethereum price chart from Tradingview.com (Crypto drug cartel)

Investigations Cast Shadows On Ethereum

The crypto industry has experienced a series of Ponzi schemes and rug pulls for years now, causing investors and regulators to be wary of crypto exchanges and organizations in the space. 

While Tron is faced with speculations of being a well-orchestrated Ponzi scheme and having connections with the CCP, the revelation that Ethereum, the world’s second-largest cryptocurrency may be backed by the CCP and connected to companies involved in drug trafficking has left the crypto community in a paradox. 

According to BoringSleuth, the CCP is allegedly supporting Ethereum and other blockchains as well as multiple Decentralized Exchanges (DEX) and Centralized Exchanges (CEX) in the crypto space. 

The crypto investigator utilized a previous transaction that saw the CCP receiving 133,700 ether on a single Genesis Block address owned by the party, as a reference to a connection between Ethereum and the CCP.

BoringSleuth has also stated a potential connection between Ethereum’s Founders and the CCP, which he said he would be revealing in detail soon. 

The allegations faced by Tron and Ethereum come amid the increasing scrutiny of China’s role in the cryptocurrency landscape. Although the crypto X community is presently reeling from the on-chain investigator’s hypothesis, no concrete evidence linking Ethereum to the CCP has emerged, leaving the allegations in the realm of speculation.

Ethereum Founder Vitalik Buterin Reveals The Challenges Of The Network

The Ethereum blockchain is notable for its smart contract functionality and various other things. However, many might not be conversant with the challenges the network encounters. In a recent interview, Ethereum’s founder, Vitalik Buterin, revealed the biggest of them all.

Ethereum’s Biggest Challenge

Speaking with CNBC, Buterin mentioned that the biggest challenge that the “Ethereum ecosystem” faces is ensuring that it builds products that provide value to its users. According to him, the last decade was test-running, but now Ethereum needs to provide utility.  

Ethereum is known to host some of the biggest decentralized applications (dApps), including prominent decentralized exchanges (DEXs) like Uniswap, Curve Finance, and Sushiswap. The network has also grown massively to the extent that several Ethereum layer-2 networks have sprung up in a bid to scale the network.

Despite this, it seems that Buterin believes that there is more to be done, even as Ethereum has asserted itself as the go-to network for dApps and other decentralized solutions. Meanwhile, ETH, its native token, is the second-largest cryptocurrency by market cap. 

Buterin also spoke about how cryptocurrencies enjoy greater use in less-developed countries as people use crypto tokens to make payments and for savings. 

Cryptocurrencies have long been touted as a hedge against inflation, and it would seem that crypto is being put to use where it is needed most. A recent report by Chainalysis showed that the highest-ranked countries for crypto adoption are being plagued with a devaluing fiat currency.  

The Ethereum founder also stated that centralized entities like Binance need to take a back seat for crypto adoption to move forward. While he appreciates these entities’ role in growing the crypto industry, he believes crypto needs to become more decentralized. 

His reason for saying this isn’t far-fetched as he noted that these entities are vulnerable to “both pressure from the outside and to themselves being corrupted.” Truly, centralized entities have taken many hits this past year, which has had far-reaching consequences on the industry. 

Last year, one of the biggest crypto exchanges, FTX, collapsed, which had several ripple effects on the crypto industry and market. Meanwhile, the two largest crypto exchanges by trading volume, Binance, and Coinbase, are currently embroiled in legal battles against the SEC.

Ethereum price chart from Tradingview.com (Vitalik Buterin)

The Future Of Ethereum

Last year, Ethereum transitioned from a proof-of-work consensus mechanism to proof-of-stake following the Merge. Buterin stated this move has made the network more decentralized as it is “harder to shut down” than a proof-of-work network. 

He also banished the idea that the network was heavily reliant on him, which many had identified as a weakness as the government could easily go after him to clamp down on the network. 

Related Reading: What The Drop In Spot And Derivatives Volumes Means For The Price Of Bitcoin

According to him, Ethereum has grown to become independent of him and the Ethereum Foundation. He points out how several independent applications on the blockchain have taken the workload off him and made the network more autonomous.  

As to Ethereum’s future plans and projects, he said that the network is focused on privacy and scaling with the help of zero-knowledge (ZK) rollups. ZK rollups are layer-2 scaling solutions that help scale the Ethereum network by moving computation off-chain, thereby reducing the computing workload on the network. It also promotes privacy, as one can verify transactions without knowing what it is about. 

Ethereum Developers Resolve Beacon Chain Finality Issues

Ethereum developers have taken measures to address the finality issues that occurred on the Beacon chain in the past week. On May 11 and May 12, the Beacon chain, the consensus layer of the Ethereum network, was unable to reach finality on two occasions. The first occurrence lasted for 25 minutes, and the second for over an hour. 

Although the exact cause of such an incident is yet unknown, it is worth stating that this network glitch had no impact on on-chain activity and transactions were still processed. 

Ethereum Developers Roll Out Network Patches To Tackle Finality Challenge 

In response to the past week, Ethereum developers have released patches to provide a solution for network users.

According to a tweet by Beacom Chain community health analyst superphiz, Teku and Prysm, two of Ethereum’s constitutional clients, have implemented these fixes, which will help prevent further finality issues on the Beacon chain. 

Superphiz also shared a statement from the Ethereum Foundation in which they are speculating the cause of these “exceptional scenarios” to be the “high load of some Consensus Layer clients”. 

The Ethereum Foundation applauded client diversity which made it feasible for transactions to occur on the network, as not all client implementations were affected by the finality challenges.

The Ethereum Foundation also confirmed that the exact cause of the Beacon chain glitch is still unknown. However, they provided assurances that the upgrades implemented by Teku and Prsym would help avoid future occurrences via optimizations that will prevent beacon nodes from high resource usage during these situations. 

ETH Total Supply Declines Following The Merge 

In other news, Ethereum’s total supply decreased in the months after The Merge. 

On September 15, 2022, The Merge occurred in which the Ethereum network fully transitioned from Proof-of-Work (PoW) to Proof-of-Stake (PoS), leading to Ethereum 2.0. 

In the 241 days after this historical event, data from the Ethereum supply analytics platform, ultrasound.money shows that ETH’s total supply has declined by 0.29%.

Ethereum

Since The Merge, over 653,000 ETH has been burned compared to the 425,000 ETH that has been minted in the last eight months resulting in a net negative change of about -227,000 ETH.

Interestingly, ultrasound.money predicts the total ETH supply to have increased at a rate of 3.244% per year had The Merge not occurred.

That said, if this deflationary trend continues, it would mean good news for long-term ETH investors. This is because a decrease in supply usually results in a rise in value. 

At the time of writing, ETH is trading at $1,805.77 with a total supply of 122.89 million. Along with most of the market, ETH showed a negative price movement in the last week, losing 5.36% of its value. 

Ethereum

Vitalik Buterin And Ethereum Foundation Selling ETH – Will Prices Fall?

Ethereum supporters are confident that prices will break the $2,000 level. However, recent moves by its founder, Vitalik Buterin, and the Ethereum Foundation, the team managing the smart contracting platform, raises concerns, especially from coin holders and traders, on whether the coin has what it needs to break above key resistance levels.

ETH Transfer Raises Concerns Among Investors

On May 5, a tracker, LookOnChain, noticed that Vitalik.eth, the domain associated with Ethereum co-founder Vitalik Buterin, transferred 200 ETH, which is worth about $400,000 at current valuation, to Kraken, a cryptocurrency exchange.

Shortly after that, the Ethereum Foundation also made a much larger transfer, moving 15,000 ETH, worth about $30 million, to the same platform.

 

This has raised concerns among holders, who are worried that the dumping of such a large amount of ETH could further pressure prices.

It’s worth noting that ETH is currently down 13% from its April highs, and sliding.

Ethereum Price On May 6| Source: ETHUSDT On Binance, TradingView

Coin holders, including those of ETH, typically send tokens from time to time. Even so, any transfer to a centralized exchange is interpreted as bearish. Vitalik Buterin might need funds to cover operating costs or even invest in projects. At this time, it is not known why he sells.

In the past, Buterin has sold ETH in batches without causing a significant price drop.

Despite this development, some analysts, including Santiment, believe that ETH may be decoupling from Bitcoin, and that it might soon recover, breaking above $2,000.

According to data from Santiment, a leading on-chain data company, there has been a significant increase in the amount of Ethereum being moved to crypto exchanges over the past few months.

 

Ethereum Sees Increased Adoption

Despite these concerns, there are also positive signs, based on on-chain activity.

A record amount of ETH was burned at the end of this week, thanks to the meme coin craze, and specifically, PEPE. The majority of meme coins run on Ethereum and are being actively moved with higher gas fees, providing a great opportunity to burn ETH and decrease the circulating supply.

 

 

In addition, Ethereum is seeing increased adoption from major companies and institutions, which is driving up demand for the cryptocurrency.

Last week, the European Investment Bank (EIB) announced that it had issued its first-ever digital bond on the Ethereum blockchain, marking a significant milestone for the cryptocurrency.

The increased adoption and burning of ETH due to the meme coin mania could sustain prices above key support levels in the days ahead. Still, it remains to be seen how prices will react in the days ahead.

The sharp drop on May 6, reversing gains of May 5, could anchor the next leg down, forcing even more liquidations towards the $1,500 support line.

Ethereum Leaves ETH 2.0 In The Past In New Roadmap Rebrand

Ethereum 2.0 is one of the most-anticipated upgrades in crypto presently. The upgrade which will bring better scalability and cheaper prices to the network is nothing short of needed given that demand has driven these two things to its brink on the network. This is why Ethereum developers have been hard at work for two years trying to usher in this new era.

However, it seems that the name ETH 2.0 is no longer doing justice to the upgrades being performed on the network. In a recent announcement, Ethereum Foundation announced that it is retiring the name ETH 2.0 in favor of something that better describes the work being done on the network.

ETH 2.0 Is Now Consensus Layer

In a blog post on its official website, the Ethereum Foundation announced its decision to change the name of the upcoming upgrade from ETH 2.0 to the “Consensus layer”. The post explains that the reason for this was the need for terminology that clearly embodies the changes that were being made to the network.

ETH 2.0 had worked while at the beginning when the goal was simply to move users from the present proof of work chain, also known as ETH 1.0, to the new proof of stake mechanism. The goal has changed drastically since then.

Related Reading | Ethereum Fee Averages Remain Above $30 Despite 35% Drop. Price Pump Incoming?

For the total completion of the upgrade, developers had discovered that it would take several years to complete. Additionally, the upgrade had evolved at various points to make changes focused on the long-term rather than just moving to the proof of stake mechanism.

ETH climbs back to $2,400 | Source: ETHUSD on TradingView.com

The new terminology provides a better understanding of what is being done on the network. This way, users are no longer confused when it comes to distinguishing between the two. This would greatly reduce scams that take advantage of the confusion generated by the terminology by asking them to swap their ETH for ‘ETH2’. It would also clear up the confusion that arises with staking, where stakers might believe they might be getting ‘ETH2’ tokens and not ETH tokens.

How Is Ethereum Price Affected?

The announcement of the new terminology has had no bearing on the value of the altcoin in the market. Ethereum which had suffered greatly in the crash, losing about 40% of its value, has trended upward in the last day. However, the change in value remains insignificant as ETH is still a long way away from hitting the $3,000 point. Prompting users to speculate that the bear market is here.

Related Reading | Market May Be Suffering But Bitcoin And Ethereum Will Pull Back Stronger, Bloomberg Analyst

As for ETH 2.0, now known as the “Consensus layer”, it is still unknown if the scheduled merge will actually take place this year. The project has so far been rocked by delays as devs encounter new issues. But for now, the upgrade remains on track.

As per the announcement, the ethereum base layer, also known as ETH1, will now be called the execution layer. While ETH 2.0 will be referred to as the consensus layer. Both of these layers combined are what make up the Ethereum blockchain.

Featured image from Forkast, chart from TradingView.com

The Ethereum Foundation Sold At The Top Again. Did They Know Something We Didn’t?

Apparently, the Ethereum Foundation employs incredible traders. Once again, they managed to cash out at the very top. On November 16th, ETH was worth an all-time high of $4891. On the very next day, the Ethereum Foundation sent 20,000 ETH to Kraken and sold them. Is this suspicious at all? Not per se, but this is the second time that they pull the same magic move. 

Related Reading | Why The Ethereum Foundation Launched A Client Incentive Program

A professional trader that goes by the name Edward Morra on Twitter was the first to spot the trade. “Friendly reminder that ETH foundation cashed out at the top (again). ETH down 40+% since then,” he said. Morra also provided a chart that shows ETH’s sharp decline in price since the sale.

$ETHFriendly reminder that ETH foundation cashed out at the top (again). ETH down 40+% since then pic.twitter.com/Bp80hEDvK0

— Edward Morra (@edwardmorra_btc) January 21, 2022

To add insult to injury, the Ethereum Foundation only paid $20 in gas fees. That might be the most impressive feat of them all.

At the time of writing, the Ethereum Foundation’s wallet holds 353,318 ETH, which is approximately $835K at current prices.

What Do We Know About The Organization’s Previous Sell-Off?

Back to Morra, his Twitter followers told him that this information was of no use to them this late in the game. The trader surprised the world and pulled an ace up his sleeve. As it turns out, Morra tweeted about the trade at the time it happened. Not only that, he warned them, “They cashed out 35k ETH on 17th of May this year, marked on the chart.”

Casual 20k ETH cashout by EthDev, sent to Kraken:https://t.co/w6AbdeW2AJThey cashed out 35k ETH on 17th of May this year, marked on the chart 👇 pic.twitter.com/sTbUwHSzD4

— Edward Morra (@edwardmorra_btc) November 11, 2021

As you can see on the chart, on May 17th the price of ETH was near its previous peak. And after the Ethereum Foundation sold, ETH trended down for months and months. Is this a coincidence? Does the foundation employ great traders? Or, is there something else to this story? Did they dump on retail ETH holders? Did the Ethereum Foundation know anything that the rest of the world didn’t?

The Ethereum Foundation still holds 394,787 ETH, and Vitalik said he persuaded foundation to sell 70,000 ETH at the top of 2018 to support the work of developers. This is a normal operation, but it also means that the Foundation thought that bear market is coming.

— Wu Blockchain (@WuBlockchain) May 21, 2021

At the time of the first sell-off, journalist Colin Wu highlighted the trade and said, “The Ethereum Foundation transferred 35,000 Eth to the Kraken Exchange on May 17. Vitalik said bubbles could have ended already on May 20.” Analyzing the move, Wu said, “This is a normal operation, but it also means that the Foundation thought that bear market is coming.”

The gas fee for this operation was 0.00240474 ETH, or $5.66 at the time of writing. Wow.

ETH price chart for 01/25/2022 on Bitfinex | Source: BTC/USD on TradingView.com
What’s The Ethereum Foundation Anyway?

According to Ethereum’s official site:

“The EF is not a company, or even a traditional non-profit. Their role is not to control or lead Ethereum, nor they are the only organization that funds critical development of Ethereum-related technologies. The EF is one part of a much larger ecosystem.”

The Ethereum Foundation distributes funds to developers via the Ecosystem Support Program and the Fellowship Program, organizes Devcom, and more. To do all that, they surely need Fiat currency in some capacity. The trade makes sense from that angle.

Related Reading | Ethereum Foundation Devs Discuss ETH2 Launch & Economics

The question, though, is, did they know that a crash was coming? And if they did, did they reach that conclusion through technical and on-chain analysis or by… other methods?

Featured Image by PatriestB on Pixabay | Charts by TradingView