Behind Ethereum’s Struggle to Surpass $3,500: Foundation Offloads $6.56 Million in ETH
In a recent update by Spotonchain, a prominent on-chain analytics platform, it has been revealed that the Ethereum Foundation has continued its trend of selling significant amounts of ETH. The foundation recently converted 100 ETH into 343,934 DAI, as reported by Spotonchain. This move adds to a pattern that has been observed since January 2024, with the foundation selling a cumulative total of 2,266 ETH, equivalent to around $6.56 million in DAI.
As the foundation continues to liquidate its Ethereum holdings into stablecoins like DAI at a consistent rate, it raises questions about the motivations and strategies behind such decisions.
Just 20 minutes ago, the Ethereum Foundation sold 100 $ETH for 343,934 $DAI once again.
Keep in mind, since Jan 2024, the foundation has sold 2,266 $ETH for $6.56M worth of $DAI.
Stay updated with the #Ethereum Foundation by following @spotonchain and setting alerts using https://t.co/ixVMzEaHwz pic.twitter.com/yqI25wNS4S
— Spot On Chain (@spotonchain) July 2, 2024
While the Ethereum Foundation manages its assets, Ethereum itself is going through a challenging phase in the market. Despite a broader market rally that began in July,
the cryptocurrency has struggled to break the $3,500 barrier. Currently, it is trading at $3,445 with a 0.5% decline in the past 24 hours.
This ongoing resistance to significant price increases goes against the foundation’s liquidation activities, stirring speculation and discussions within the crypto community.
There are multiple interpretations for the Ethereum Foundation’s decision to convert large amounts of Ethereum into DAI. Financial prudence may be a motivating factor, given the volatile nature of cryptocurrencies. By converting to DAI, a stablecoin pegged to the US dollar, the foundation may be seeking to guard against potential market downturns, especially in an unpredictable post-2020 market. Furthermore, these funds could be allocated for future projects or operational expenses, necessitating budget stability beyond Ethereum’s fluctuating value.