More than 50% of European families have some investment in digital currency. The average European family sees crypto as a viable investment and savings option. This was discovered in several recent surveys conducted over different demographic areas. Despite the volatility of the crypto space, as recent events highlight, it has seen a continuous rise in new investors. More people are committing to crypto investments and many of them are taking steps to buy into the growing market. The flurry…
Although a non-profit organization, the Ethereum Foundation appears to have a good insight into generating money. After a significant drop in prices in the crypto market, some wondered if such a decline was foreseeable.
The answer appears to be yes, as the Ethereum Foundation has managed to sell ETH at the market peak. But, of course, every investor’s dream is to guess the optimal moments of opening and closing a trade perfectly.
This article will provide more information about the Ethereum Foundation and its operations on the market. The foundation’s strategy is clear, and we will look more closely into it.
The role of the Ethereum Foundation
Before proceeding, it is crucial to clarify the role of the Ethereum Foundation in the market. To do this, we have to go back to 2014, when Ethereum was still a project on paper.
Ethereum Switzerland GmbH (EthSuisse) is the software development company initially working on the project. Unfortunately, after the ETH launch in 2015, the company lost its primary development house, closing in 2018.
Let’s stay in Switzerland: in addition to development work, the founder of ETH decided to create a non-profit organization. From this idea came the Ethereum Foundation (Stiftung Ethereum).
Over the years, the foundation hasn’t carried out a vast number of transactions. However, for obvious reasons, any movement on the market by this group often creates a lot of attention.
The November call
The attention that the market dedicates to the operations of the Ethereum Foundation comes from experience. Citing the most recent case, we report an essential sale of ETH by the foundation last November.
Looking at the current price of ETH, it is clear that the foundation’s operation was optimal. Some people report that the Foundation avoided a 40% loss, considering current prices.
Those who have followed Ethereum for some time will have the impression of experiencing a “déjà vu.” Indeed, it is not the first time the foundation has managed to sell ETH at the right time. If we go back to the peak of May 2021, for example, the market saw another similar operation.
Should we see the operation as a “sell-off”?
It is easy to define the sale of assets by the founders as a “sell-off.” However, it seems correct to speak of a cashing out operation in this case. There is no doubt that Buterin predicted a bearish market in November, proving that he is right.
We would call the operation a “sell-off” as the foundation still holds a lot of ETH. In particular, the data highlights the presence of over 350,000 ETH in the foundation’s wallet. So we’re talking about more than $1 billion using the current exchange rate.
Companies and insiders selling shares are routine operations on the stock market. The same argument should also apply to the cryptocurrency market. The indicator from this story is only one: the Ethereum Foundation knows how to analyze the market perfectly.
Will we see a new market peak?
None of us have a crystal ball to predict the future. However, it is questionable whether there is any chance of seeing new spikes in the price of ETH in the coming years.
The observation of the Ethereum Foundation’s behavior appears to be self-explanatory. The November sale amounts to $97 million, a figure that is certainly significant.
However, we must not lose the habit of looking at the bigger picture. The foundation sold just under 9% of its coins, and we can’t fail to see the remaining 91%.
If the Ethereum Foundation did not believe in ETH’s future, the sale would have probably been more significant. However, combining this with the waiting for ETH 2.0, the foundation appears to have a bullish sentiment on the project.
Future implications for ETH
While we wait for Ethereum 2.0, the crypto market has undoubtedly suffered a hit over the last weeks. Nevertheless, the sale of ETH by the Ethereum Foundation was a successful operation deserving careful analysis.
Expecting a market correction, those who decided to sell certainly made the right call. However, we must not see any wrong message behind this operation.
The foundation remains heavily bullish on the project, with more than $1 billion in ETH tokens. It will be exciting to see if, at current prices, anyone in the foundation decides to buy ETH. We will keep an eye on the crypto news and update the readers.