The Ethereum Foundation, the core developer of Ethereum (ETH), made waves in the cryptocurrency market this Friday, August 23. As cryptocurrencies surged, its treasury account sent 35,000 ETH—worth nearly $100 million—to Kraken, a leading crypto exchange.
With the on-chain activity, the Ethereum community demanded an explanation and a disclosure of what could be a massive sell-off. On that note, Aya Miyaguchi disclosed that the Foundation has a $100 million yearly budget mainly to pay for grants and the team’s salaries.
Notably, Miyaguchi explained the Ethereum Foundation came from a prolonged period without doing any treasury management. Moreover, she highlighted that the Foundation will not sell all at once but is preparing for gradual sales on Kraken.
Picks for you
“This is part of our treasury management activities. This year, there was a long period of time when we were advised not to do any treasury activities due to regulatory complications, and we were not able to share the plan in advance. Also, this transaction is not equal to a sale. There will be planned and gradual sales from here on.”
– Aya Miyaguchi, Ethereum Foundation
Ethereum Foundation’s $100M yearly sales equals Ripple’s monthly sales
Interestingly, the Ethereum Foundation’s disclosed yearly budget is near the same amount Ripple sells monthly in the XRP token. Finbold has been reporting Ripple’s selling activities, originated from the monthly XRP unlocks, since August of last year.
Overall, these sales were of over 200 million XRP tokens every month, worth approximately $100 million. Ripple has already prepared this month’s 200 million XRP sell-off but, so far, has not started selling.
As of August, the company has sold 1.826 billion XRP from its Treasury account year-to-date, as Finbold reported. At current prices, this amount is worth $1.11 billion, although the nominal value of each sale has varied.
This is an impressive amount and difference from the Ethereum Foundation’s $100 million yearly budget, totaling over 12 times more. The difference becomes even more relevant when considering Ethereum has a market capitalization nearly ten times higher than XRP. As of this writing, ETH has a $334 billion market cap, versus XRP’s $35 billion valuation.
As of this writing, Ethereum trades at $2,776, and the Foundation’s yearly budget equals 0.03% of all 120.3 million ETH in the circulating supply. Therefore, despite creating some selling pressure, these activities will hardly impact the native token’s price if its demand continues growing.
Nevertheless, investors should remain cautious and carefully monitor whale activities like the Ethereum Foundation.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
