Ethereum Foundation’s $94M ETH Transfer to Kraken Draws Criticism Amidst 8.8% Price Drop

• The Ethereum Foundation transferred 35,000 ETH to Kraken, igniting concerns over timing and financial transparency.
• Aya Miyaguchi clarified that the Ethereum Foundation’s ETH sale was part of routine treasury management and conversions to fiat.
• Ethereum’s price declined 8.8% after the sale, mirroring past trends where sentiment dips followed ETH transfers.

The Ethereum Foundation transferred 35,000 ETH, worth approximately $94.07 million, to the cryptocurrency exchange Kraken. The move, executed at a price of $2,688 per ETH, occurred five days ago. 

However, Ethereum’s price has since dropped by 8.8%, settling at around $2,450. This substantial transfer of assets caught the attention of the crypto community, sparking debates about the foundation’s financial transparency and timing.

Community Criticism and Response

Lookonchain, a data aggregator, brought the transaction to light on X. Some users expressed concerns about the foundation’s decision-making, particularly regarding financial transparency. One user questioned the timing of the transfer, suggesting the lack of prior financial disclosure could be problematic for the Ethereum ecosystem. Such comments reflect a growing demand for greater visibility into how organizations manage large sums of crypto assets.

In response to the concerns, Aya Miyaguchi, the executive director of the Ethereum Foundation, clarified that the transaction was routine and part of the foundation’s treasury management strategy. Miyaguchi further explained that the foundation operates with an annual budget of approximately $100 million, largely used for grants and salaries. She also mentioned that some recipients of these funds could only accept payments in fiat currency, necessitating the conversion of ETH.

Historical Sales and Price Implications

Since January 1, 2021, the Ethereum Foundation has sold 239,000 ETH, amounting to $654 million. This history of strategic sales highlights the foundation’s recurring practice of offloading ETH during favorable market conditions. The latest sale follows a similar pattern, where the foundation successfully sold ETH near a price peak, as observed in past transactions.

Ethereum Price and Market Sentiment

This sale coincided with a bearish sentiment surrounding Ethereum’s price. Data from a recent analysis showed a consistent relationship between ETH’s price and market sentiment. Spikes in sentiment, often aligning with significant price movements, were evident in the market. 

In late May and late July, notable increases in sentiment were followed by sharp declines in Ethereum’s price. However, both price and sentiment have trended downward toward the end of August. This data suggests a general decline in market confidence, reflected in the decreasing value of Ethereum and deteriorating sentiment.