Ethereum has been facing some selling pressure from its co-founders and the Ethereum Foundation in recent months. The latest move came from Jeffrey Wilcke, one of the original developers of Ethereum, who transferred 22,000 ETH (worth about $41 million) to the Kraken exchange on June 5. This was his second major sell-off this year after he moved 15,000 ETH to Kraken in January.
Wilcke still holds a large amount of ETH in his address, about 150,000 ETH (worth about $280 million). However, his actions have raised some concerns among the Ethereum community about whether he is losing faith in the project or preparing for a market crash. Wilcke is not the only one who has been dumping ETH lately.
Why Are These Transferring Happening?
In May, Vitalik Buterin, the co-creator of Ethereum, donated and sold about 200 ETH to various charities and causes. The Ethereum Foundation also transferred 15,000 ETH to Kraken in May.
These moves have coincided with a sharp decline in the price of ETH, which has dropped by more than 50% from its all-time high of over $4,000 in May to below $2,000 at the time of writing. Some analysts have suggested that the large ETH transfers by the co-founders and the foundation have created a negative sentiment and selling pressure in the market.
They have also pointed out that historically, ETH price has fallen significantly after such transfers. For instance, in November 2021, when the Ethereum Foundation moved 20,000 ETH to Kraken, the price dropped by 40% in two months.
ETH supply has become more scarce due to the increasing amount of ETH staked on the Beacon Chain for the upcoming transition to proof-of-stake. The Beacon Chain currently holds over 24 million ETH (worth about $46 billion). Moreover, the balance of ETH on exchanges has reached a five-year low, indicating a lower selling pressure and a higher demand.
Therefore, it is not clear whether Wilcke’s latest transfer of 22,000 ETH to Kraken will have a lasting impact on the price of ETH or not. It could be seen as a sign of weakness or a smart move depending on one’s perspective. However, what is clear is that Ethereum is undergoing a major transformation with its upcoming upgrades and innovations. Whether these changes will make Ethereum more valuable or less attractive remains to be seen.
