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Ethereum co-founder Vitalik Buterin has been in the news of late with his 760 ETH withdrawal–a move that raised eyebrows as speculations about what such external wallet transactions by him could do to the Ethereum market.
Transactions are part of a broader trend that has seen wallets associated with Buterin and the Ethereum Foundation actively sell large portions of Ether. It is this aggressive selling that has added to the bearish pressure on Ethereum’s price, which lately slipped to the low $2,150 level before recovering slightly.
Vitalik Buterin: Details Of The Withdrawal
The wallet, according to reports, has been selling since it received Buterin’s ETH in two transactions on Aug. 9 and Aug. 30 totaling 3,800 ETH. In the wake of the two transfers, the wallet has sold 760 ETH for approximately 1.835 million USDC or roughly $2,414 per ETH.
The multi-signature wallet that got $ETH from @VitalikButerin is on a selling streak!
After receiving 3,800 $ETH ($9.99M) from Vitalik on Aug 9 and 30, it’s been cashing out, selling 760 $ETH for 1.835M $USDC at ~$2,414 per ETH. The latest sale happened just 21 hours ago.… pic.twitter.com/ELcjpPSg4K
— Spot On Chain (@spotonchain) September 9, 2024
The recent sale was made just 21 hours ago and has become a part of a streak of aggressive liquidations that have sparked speculations in the crypto community.
Buterin was even accused of “dumping” his ETH holdings, which he always publicly denied, claiming that funds go to support development in the Ethereum ecosystem and philanthropy. While he has been reassuring, the continuous sales from wallets attributed to him have greatly contributed to increased bearish sentiment among investors.
Broader Market Implications
This selling is not a one-man activity carried out by Buterin; Ethereum Foundation is also notorious for offloading huge quantities of ETH. According to reports, it has sold over 3,066 ETH this year alone.
Such sustained sales have raised questions about the whole Ethereum market’s health. According to analysts, sales such as these, together with large holder store reductions, have made life tough for ETH, struggling to hold its value.
Besides Buterin’s sell-offs, one of the largest Ethereum whales liquidated a total of 28,554 ETH in cash in order to pay back his debt on Aave, a decentralized borrowing platform.
That amount translates into approximately $64.4 million. This further added to the ETH sell-off pressure, making things even more complicated for ETH in the market.
These cumulative activities have stirred talks that this aggressive ETH sell-off might cause ETH to plunge even below $2,000 if it proceeds this way.
A Call For Transparency
With the situation still developing, there are some calling for more transparency on Buterin’s part and that of the Ethereum Foundation with respect to how they are selling the cryptocurrency.
🚨🚨 After Vitalik, the Ethereum Foundation is the next to sell $ETH!
Just 10 minutes ago, the #EthereumFoundation sold 450 $ETH for 1.029M $DAI.
In total, they’ve sold 550 $ETH ($1.28M) at an average price of $2,324 in the past 4 days.
Follow @spotonchain for more updates… https://t.co/d2bP0WLo9C pic.twitter.com/cjgFvMeOvw
— Spot On Chain (@spotonchain) September 9, 2024
Insiders close to the foundation have said its sales are part of a planned financial policy aimed at managing operational expenses, including grants and salaries.
According to Aya Miyaguchi, executive director of the Ethereum Foundation, one requirement is the need to convert portions of the ETH it holds into stablecoins like DAI to cover certain financial obligations.
This casts a shadow on the Ethereum community, as to where this could lead in the long run. Though the idea of Buterin and the Foundation could be genuinely valid, this dumping perception plays a significant role in investor perception.
With this action, the market would respond to such withdrawals, and recovery or fall in ETH value is something the stakeholders keenly await.
Featured image from Shrimpy Blog, chart from TradingView