- The Ethereum Foundation moved 35,000 ETH to Kraken for treasury management, not market manipulation
- The Foundation holds about 0.3% of Ethereum’s total supply, a small portion that shouldn’t raise centralization concerns
- Comparatively, private entities in Bitcoin hold much larger stakes, making Ethereum’s situation less worrisome
The recent sale of 35,000 ETH by the Ethereum Foundation has sparked discussions in the crypto community. While some see this move as potential market manipulation, others view it as a necessary operation to cover the foundation’s annual costs.
Does the Ethereum Foundation’s ETH Sale Signal Centralization Risks?
The sale of 35,000 ETH by the Ethereum Foundation went relatively unnoticed or, more accurately, was debated according to the usual pros and cons of Ethereum. Some see it as market manipulation, while others believe it’s just part of keeping the organization running.
At Bitcoinsensus we prefer to analyze the numbers to understand how much control the Ethereum Foundation has over the total Ethereum supply and what impact it might have in the future. Is this really something to worry about? Is there a reason to believe Ethereum is more centralized than we think? How do other similar chains handle this? Which concerns are valid, and which ones are overblown?
Ethereum Foundation: The Sale of Discord
The facts have already been covered in detail. The Ethereum Foundation, which plays a very active role in the development of the Ethereum ecosystem, sent 35,000 ETH to Kraken. This isn’t the first time these sales have occurred. They happen periodically to cover operating costs, which amount to about $100 million annually for the Ethereum Foundation.
Aya Miyaguchi from the Foundation also weighed in on the topic, explaining:
“This is part of treasury management. The Ethereum Foundation has an annual budget of around $100 million, mostly spent on grants and salaries, some of which can only be paid in fiat. This year, we were advised not to conduct any treasury activities due to regulatory concerns, and we couldn’t share the plan in advance. This transaction doesn’t equate to sales. There will be planned and gradual sales moving forward.”
So, the mystery is more or less solved: the Foundation, as expected, has expenses to cover and periodically sells its assets.
Although there were no direct references, Miyaguchi hinted at issues related to SEC investigations involving the Foundation, which had temporarily halted normal treasury operations. Now that these investigations have concluded—positively for the Foundation—transfers have resumed.
But How Much Ethereum Does the Foundation Hold?
The Foundation, according to data that isn’t particularly recent, holds about 0.3% of the entire Ethereum supply. This is a very small amount that shouldn’t be a cause for concern, especially since these sums are still liquidated rather gradually.
These amounts are small compared to those held by private entities in Bitcoin, such as Michael Saylor or even just BlackRock’s ETF.
In other words, there’s really not much to worry about. As often happens in the crypto world, the mountain has given birth to a mouse.
Conclusion
Despite the concerns, the ETH sale by the Ethereum Foundation is simply ordinary resource management with a limited impact on Ethereum’s decentralization. The Foundation’s share is minimal compared to the total supply, suggesting there’s no need for excessive alarm.
