Ethereum co-founder Vitalik Buterin has been in the news lately for withdrawing 760 ETH, a move that has raised eyebrows as speculation has swirled about how such external transactions from his wallet could impact the Ethereum market.
The transactions are part of a larger trend that shows wallets linked to Buterin and the Ethereum Foundation actively selling large amounts of Ether. It is this aggressive selling that has added to the bearish pressure on the price of Ethereum, which recently fell to a low of $2,150 before recovering slightly.
Vitalik Buterin: Troop withdrawal details
The wallet has reportedly been on sale since it received Buterin's ETH in two transactions on August 9 and 30 for a total of 3,800 ETH. After the two transfers, the wallet sold 760 ETH for about 1.835 million USDC, or about $2,414 per ETH.
Multi-signature wallet that received $ETH from @VitalikButerin is popular!
After receiving $3,800 ETH ($9.99M) from Vitalik on August 9 and 30, he cashed out by selling $760 ETH for $1,835M USDC at ~$2,414 per ETH. The last sale was just 21 hours ago.… pic.twitter.com/ELcjpPSg4K
— Spot On Chain (@spotonchain) September 9, 2024
The latest sale took place just 21 hours ago and was part of a series of aggressive liquidations that have sparked speculation in the crypto community.
Buterin has even been accused of “draining” his ETH holdings, which he has always publicly denied, claiming that the funds go to support the development of the Ethereum ecosystem and charity. Although he has been reassuring, the constant selling from wallets attributed to him has contributed significantly to the bearish sentiment among investors.
Wider market implications
This sale is not Buterin's sole activity; the Ethereum Foundation is also notorious for dumping huge amounts of ETH, with reports suggesting that over 3,066 ETH have been sold this year alone.
Such sustained selling has raised questions about the health of the entire Ethereum market. Analysts say sales like these, coupled with large drawdowns of holders' holdings, have made life difficult for ETH, which has struggled to maintain its value.
In addition to Buterin's sell-off, one of Ethereum's largest whales liquidated a total of 28,554 ETH in cash to pay off his debt on Aave, a decentralized borrowing platform.
This amount is approximately $64.4 million. This further increased the selling pressure on ETH, making the situation even more difficult for ETH in the market.
These combined actions have sparked speculation that the aggressive ETH sell-off could even push ETH below $2,000 if things continue as they are.
A Call for Transparency
As the situation continues to evolve, some are calling for more transparency from Buterin and the Ethereum Foundation about how they sell the cryptocurrency.
🚨🚨 After Vitalik, the next one to sell $ETH will be the Ethereum Foundation!
Just 10 minutes ago #EthereumFoundation sold $450 ETH for $1.029M DAI.
In total, they sold $550 ETH ($1.28 million) over the last 4 days at an average price of $2,324.
Follow @spotonchain for the latest news… https://t.co/d2bP0WLo9C pic.twitter.com/cjgFvMeOvw
— Spot On Chain (@spotonchain) September 9, 2024
Insiders close to the foundation said its sales were part of a planned financial policy aimed at managing operating expenses, including grants and salaries.
One of the requirements is that some of the ETH held must be converted into stablecoins such as DAI to cover certain financial obligations, according to Ai Miyaguchi, executive director of the Ethereum Foundation.
This casts a shadow on the Ethereum community and what this could lead to in the long term. While Buterin and the Foundation's idea may indeed be valid, this perception of dumping plays a significant role in investor perceptions.
In such an action, the market will react to such withdrawals, and the recovery or decline in the value of ETH is what stakeholders are eagerly waiting for.
Main image from Shrimpy's blog, chart from TradingView