Ethereum Foundation makes $13.3m ETH transfer, prompting market speculation

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Ethereum Foundation makes $13.3m ETH transfer, prompting market speculation
ethereum-foundation-eth-transfer
By Ogwu Osaemezu Emmanuel
March 4, 2024 at 6:02 pm
ethereum-foundation-eth-transfer
Edited by Brian Stone
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Ethereum Foundation makes $13.3m ETH transfer, prompting market speculation
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A wallet reportedly linked to the Ethereum Foundation has liquidated $13.3 million in ETH, raising eyebrows and sparking conversations about a possible price decline.

The Ethereum Foundation‘s decision to liquidate $13 million worth of Ethereum (ETH) has left investors contemplating the transaction’s potential impact on the price of the world’s second-largest cryptocurrency by market capitalization.

Traditionally, the foundation’s actions are considered precursors to market shifts, triggering concerns about a potential decline. Despite this, Ethereum displays bullish signals as the charts look today.

A wallet related to the #Ethereum Foundation transferred 500 $ETH($13.3M) to #Cumberland Forwarder 10 hours ago.

The wallet received 47,814 $ETH($166M currently) from the #Ethereum Foundation on Nov 8, 2015, when the price was $1.02.https://t.co/xTwE67jL6a pic.twitter.com/4KbcbTK7ou

— Lookonchain (@lookonchain) March 4, 2024
The Ethereum price chart presents an optimistic view with a strong uptrend, marked by consistently higher highs and lows. Currently trading at $3,550, Ethereum has experienced a 14.6% increase in the last seven days, commanding a market cap of $420 billion and a crypto market dominance of 17.8%, according to CoinGecko.

Ethereum Foundation makes $13.3m ETH transfer, prompting market speculation - 1
Ethereum Price Chart | CoinGecko
Though market pullbacks are natural in an uptrend, they induce investor anticipation as the market awaits its next move. The weekly Relative Strength Index (RSI) stands at 89.95, approaching the overbought zone, suggesting a possible correction, which aligns with the Ethereum Foundation’s recent sell-off.

You might also like:
Ethereum price targets $4k as investors transfer $2.1B to long-term storage
In the broader market context, Bitcoin (BTC) has gained over 28% in the last seven days, nearing its all-time high of $69,000 in November 2021. At the time of writing, the price of BTC is hovering around the $67,000 region.

Meanwhile, the Ethereum network is preparing to activate the Dencun update, combining Cancun and Deneb updates. Scheduled for Mar. 13, this improvement intends to significantly reduce layer-2 transaction fees while enhancing Ethereum’s scalability, efficiency, and security.

On Feb. 27, the Ethereum Foundation announced that it had successfully activated the upgrade on test networks.

quick notes from the eth dev call this morning, acdc #128:
dencun 🐡
– all client teams, except lodestar, have released final software versions for the dencun upgrade
– these versions plus the dencun-ready candidate client for lodestar are currently being tested on one last…

— Christine Kim (@christine_dkim) February 22, 2024
Last month, Ethereum experienced substantial growth, attracting 1.8 million new users to its network. Santiment’s metric tracking funded Ether wallets revealed a surge, with the total ETH holders reaching 115.5 million addresses.

In contrast, BTC witnessed a decline of 70,000 wallet addresses during the same period, underlining Ethereum’s market dominance.

The growing demand from new ETH addresses and a $2.3 billion decrease in exchange supply positions Ethereum favorably for a potential advance towards $4,000 in March 2024.

Spot Ethereum ETF prospects
Amidst Ethereum’s positive trajectory, multiple issuers are seeking approval for spot Ethereum ETFs, mirroring the success of spot BTC products. However, SEC delays and commissioner comments hint at challenges on the road ahead.

An upcoming meeting between the U.S. Securities and Exchange Commission (SEC) and spot Ethereum ETF applicants later this month, will determine the fate of Ether-based investment vehicles. Decisions on the products are postponed until May at the earliest, with VanEck’s filing leading the queue. The SEC’s approval or rejection by May 23 will influence other issuers, including BlackRock, Franklin Templeton, Grayscale, and Invesco Galaxy.

The approval of spot Bitcoin ETFs in January marked a significant development after years of rejections. This decision, influenced by a Grayscale lawsuit against the SEC, was seen as a turning point in legitimizing crypto adoption and investment in the United States.

You might also like:
Ethereum price hits $3k, outperforms Bitcoin despite $36b ETF inflows
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Opinion
What Happens if Bitcoin Reaches an All-Time High?
What’s different this time? ETFs, Wall Street and a lack of celebrity influencers — for now.
How high can bitcoin go? (NASA)
How high can bitcoin go? (NASA)

By Daniel Kuhn
AccessTimeIconMar 4, 2024 at 8:39 p.m. UTCUpdated Mar 4, 2024 at 8:42 p.m. UTC
You don’t need me to tell you that bitcoin (BTC) has been on a tear. The first and largest cryptocurrency by market cap is up over 6% just in the past 24 hours, after crossing a supposedly psychologically important threshold of $65,000 according to CoinDesk Indices data. It’s now within striking distance of its all-time high around $69,000, last seen at the end of 2021 — before the bad things happened.
Many people, even industry insiders, have been taken aback by the price action, given how bleak market sentiment around crypto was even just a few months ago. Not even a major exchange like Coinbase saw it coming, given that a boost in trading activity caused (another) outage. It’s enough of a surprise that some people feel hesitant to say this is the beginning of another bull run, given that things could fall back as quickly as bitcoin ran up.
This is an excerpt from The Node newsletter, a daily roundup of the most pivotal crypto news on CoinDesk and beyond. You can subscribe to get the full newsletter here.
VolumeMuteUnmute
But there are legitimate differences that already set this cycle apart from the 2020-21 hype cycle — with the bear market washing out some of the worst aspects of the industry. Is it necessarily the case that rising interest in crypto be coupled with fraud, crime and cringe-worthy behavior? Though it’s dangerous to say it, this time could be different.
First, there’s the multi-billion dollar question: Will spot bitcoin exchange-traded funds continue to grow and grow. The 10 live funds have seen $8 billion in net inflows so far, which has not only helped re-legitimize crypto given the involvement of trustworthy financial institutions including BlackRock, Fidelity and Bank of America’s Merrill Lynch, but also placed significant buying pressure on the underlying commodity, bitcoin.
It’s possible ETFs have changed market dynamics by giving a safer way for people to gain exposure. If anything, these ETFs prove that there was latent demand for bitcoin from all corners of the market, from retail investors to ultra high-net worth individuals asking their banks for crypto exposure. BlackRock’s bitcoin ETF, for instance, is the first fund to reach $10 billion in assets under management this quickly — and some say the next $10 billion could flow in even faster.
See also: Welcome to the 'Bitcoin Era' on Wall Street | Opinion
But TradFi’s attention isn’t fixated solely on ETFs. CME Group’s crypto derivatives products, typically viewed as a proxy for institutional interest, are experiencing record volumes. A similar trend happened last cycle, where interest in crypto begets more and more interest from more and more sectors. The more crypto goes up, the more people want to play with it.
Celebrities aren't here
Interestingly, the current cycle hasn’t attracted the same level of involvement from celebrities — at least yet. This could be a factor of not having a figure like Sam Bankman-Fried who wanted to buy public trust in FTX by bankrolling celebrity endorsements. It’s possible the SEC suing Kim Kardashian or the cast of characters who allegedly advertised TRON without disclosing it will keep Hollywood at bay.
Of course all this could change — Paris Hilton could trot out her Bored Ape again any day — but for now the lack of “influencers” is a positive development considering that research shows how poorly their investment “advice” tends to be. Likewise, the voices that dominated the last cycle — figures like Alex Machinsky, BitBoy, Changpeng Zhao, Do Kwon, SBF, Su Zhu, etc. — largely have been discredited, and it seems like this is a power vacuum crypto is hoping stays empty.
See also: Could Sam Bankman-Fried's Saga Happen Without Crypto? | Opinion
That in itself could be wishful thinking, and it’s worth considering why influencers emerge in the first place. One theory is that crypto has influencers because crypto prices are self-reflexive (aka “number go up technology”), and someone tends to emerge to coordinate attention towards one project or another. This is amplified, as Bloomberg notes, by the ability for traders to load up on borrowed funds, gaining leverage to try to max out trading profits.
Given the amount of credit already building up in crypto markets (open interest in bitcoin futures is up 90% since last fall on platforms like Binance, OKX and BitMEX, which can be leveraged up to 100x) and the tremendous amount of capital flowing into meme coins like DOGE and SHIB, it’s clear enough people are looking to gamble big this time around, too.
See also: Bitcoin Futures Open Interest Tops $21B, Highest Since November 2021
Institutional lending
While the laws in the U.S. haven’t yet changed, over the past few years notable advancements including the E.U.’s MiCA, UAE’s digital asset trading licensing program and lobbying efforts in places like Canada mean more traders could soon have more regulated means of gaining access to crypto derivatives.
There’s a hope that the crypto lending sector won’t take as nasty a turn as last time, given that it ended up being dominated by a handful of now bankrupt “hedge funds” like Alameda Research and Three Arrows Capital, which were supposed to be generating the yield paid to customers of now bankrupt lending platforms like Celsius, BlockFi and Genesis.
For instance, tokenization giant Securitize, recently spun up an “Earn” program that offers yields via over-collateralized loans and tokenized funds for financial titans KKR and Hamilton Lane. For now, while still assessing demand for the product, Securitize itself will be paying for it is billing as “sustainable” yield to users off its balance sheet, Reid Simon, Securitize's head of credit, told CoinDesk in an interview.
This in itself is an interesting move, signaling how important lending programs are as one of the few ways to put digital assets towards productive use. “It’s a business we want to get into,” Simon said, noting that it’s “unclear” how well the crypto-native firm's brand has resonated with crypto. “I don't necessarily think of Securitize and bitcoin together,” he said.
See also: Crypto for Advisors: Private Credit Meets the Blockchain
Other crypto lending operators have spoken at length about the ways things went off the rails last time, and others have noted there are ways for the industry to self-regulate, like by separating crypto trading from custody and advocating for proof-of-reserves.
There’s no guarantee the same mistakes won’t be made again (or that bitcoin will continue to climb if it regains its all-time high at all). It’s worth noting the recent rally has come alongside significant advancements on the S&P 500 and Nasdaq indexes and renewed growth in the U.S. tech sector, surprising many on-lookers who thought raised interest rates would keep capital out of risk-heavy sectors.
It’s possible that crypto is doomed to Sisyphean cycles of rising rates of illicit use, fraud, speculation, cringe-inducing endorsements and greed every time prices boom, simply by nature of how these hype cycles unfold. But, for now, with the worst aspects of the industry washed out, and many wanting to do things differently (read: legitimately), it’s worth hoping things won’t take a turn for the worse.
Must everything that goes up turn down? Is this time really different?
Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Daniel Kuhn
Daniel Kuhn
Daniel Kuhn is a deputy managing editor for Consensus Magazine. He owns minor amounts of BTC and ETH.

Follow @DanielGKuhn on Twitter
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Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

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