The Ethereum Foundation’s Executive Director, Aya Miyaguchi, has addressed the community’s concerns following a significant transaction involving the transfer of 35,000 ETH, valued at approximately $94.07 million, to the crypto exchange Kraken. This transaction raised questions and sparked discussions regarding the Foundation’s financial strategies and potential market impact.
Ethereum Foundation Reveals Selloff Reason
Aya Miyaguchi clarified that the transfer is part of the Foundation’s ongoing treasury management activities. The Ethereum Foundation, which manages a budget of around $100 million per year, uses these funds primarily for grants and salaries. However, not all recipients can accept cryptocurrency payments, necessitating fiat conversions.
This year, the Foundation faced regulatory complications, resulting in a delay in executing any treasury activities. The advisory against moving funds during this period prevented the Foundation from sharing its plans in advance.
This is part of our treasury management activities. EF has a budget of ~$100m per year, which is largely made up of grants and salaries, and some of the recipients are only able to accept in fiat. This year, there was a long period of time when we were advised not to do any…
— Aya Miyaguchi (ayamiya.eth) (@AyaMiyagotchi) August 24, 2024
Miyaguchi emphasized that this transfer does not equate to an outright sale. Instead, it marks the beginning of planned and gradual sales, aimed at maintaining the Foundation’s financial health while minimizing market disruptions. Despite these reassurances, the transaction still fueled speculation and concerns within the community, particularly about its timing and transparency.
Community Concerns Over Transparency and Communication
The Ethereum foundation’s lack of prior disclosure about such a large transaction has sparked criticism from the Ether community. Many members expressed frustration over the Foundation’s absence of regular financial updates, arguing that better transparency could prevent unnecessary market speculation and fear, uncertainty, and doubt (FUD).
Thanks, Aya.
Perhaps best to always share such disclosures around large movements, rather than letting the market turn it into needless FUD.
— antiprosynthesis.eth ⟠ (@antiprosynth) August 24, 2024
Calls for quarterly reports detailing expenses, expected sales, and other financial activities have been growing louder as the community seeks more consistent communication from the Foundation.
In response, some community members suggested that the Ethereum foundation establish a dedicated communication team to manage such announcements and provide timely updates.
ETH Price Outlook Amid Market Movements
The market has been closely monitoring the Foundation’s recent actions, particularly in light of the ongoing recovery in the ETH price. Transferring such a large amount to Kraken raised fears of a potential selloff, which could apply downward pressure on the cryptocurrency’s price. However, ETH price analysis indicates that price has shown resilience despite these concerns, with a 4.5% gain over the past 24 hours, reaching the $2800 resistance level.
The renewed buying pressure in the market has been attributed to broader macroeconomic factors, including Federal Reserve Chair Jerome Powell’s confidence in controlling inflation and the potential for interest rate cuts in the coming months. Nevertheless, the looming uncertainty regarding the Foundation’s future sales strategy and the recent outflows from U.S.-based spot Ether ETFs, which saw $5.70 million withdrawn, could challenge the sustainability of this Ether price recovery.
Looking ahead, the Ethereum Foundation’s approach to managing its considerable cryptocurrency assets will remain under scrutiny. According to data from Arkham Intelligence, the Foundation still holds substantial reserves, including 273,776 ETH and 31,015 WETH, valued at approximately $840 million.
The post Ethereum Foundation Confirms Selloff Reason; ETH Price Surge At Risk? appeared first on CoinGape.
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