This year, the Ethereum Foundation has conducted two token sales, which have led to drops in the price of ETH. Now, as we approach the end of 2023, the foundation is making significant moves with the second-largest cryptocurrency by market capitalization, Ethereum (ETH). This has raised concerns in the community about the future price of ETH.
On November 27, the Ethereum Foundation executed a cryptocurrency transaction, transferring 1,000 ETH (approximately $2 million) to the Safe Multisig wallet address “0x4e6b.” Notably, this transaction occurred while the price of ETH was experiencing slight fluctuations, eventually dropping by 2.9% in recent times. However, ETH has managed to maintain its crucial level of $2,000. As of the time of writing, ETH is trading around $2,023.
This isn’t the first time the Ethereum Foundation has transferred ETH. Earlier this year, they executed two similar transactions:
- On October 9, 2023, shortly after receiving 1,700 ETH from the Gnosis Safe Proxy wallet address “0xbC9a9,” the Ethereum Foundation swapped the entire amount for nearly $2.74 million USDC on Uniswap. In response to this move, the price of ETH initially dropped to a low of $1,546 before experiencing a strong rebound to reach the $2,000 mark.
- On May 6, 2023, the Ethereum Foundation transferred 15,000 ETH to the Kraken cryptocurrency exchange. As expected, this led to a more than 14% decline in the price of ETH, from $1,898 to $1,650 in June.
The purpose of these recent token transfers remains unclear. Nevertheless, the community is concerned that another token sale might be imminent, potentially exerting downward pressure on ETH’s price. Historical data has shown that each time the Ethereum Foundation sells ETH, it tends to trigger short-term price decreases.
Despite these concerns, the optimistic sentiment within the community has driven ETH’s price to increase by 15% over the past month and by 70% since the beginning of the year. ETH is currently trading above the $2,000 threshold.
Additionally, there has been a significant increase in institutional Ethereum holdings in November, both through direct ownership and indirect channels like trusts, ETFs, and funds. This coincides with ETH’s stability in the $1,800 to $1,900 range.
This heightened institutional interest reflects their growing confidence in Ethereum’s long-term value and the promising prospects of the market. Ethereum’s ongoing technical advancements, including the deployment of Ethereum 2.0 and enhanced smart contract functionality, have played a vital role in attracting institutional attention, emphasizing the cryptocurrency’s appeal as a long-term investment opportunity.
In early November, the cryptocurrency community was abuzz with news that the U.S. Securities and Exchange Commission (SEC) had acknowledged Grayscale Investments’ efforts to convert its Ethereum trust fund into an ETF. As of now, there is no official confirmation regarding the approval of a cryptocurrency spot ETF.
Market optimism surged when BlackRock, the world’s largest asset manager, officially filed an application for an Ethereum spot ETF on November 9. This milestone led ETH to break through the $2,000 resistance level, reaching a six-month high on the same day. BlackRock formally submitted the S-1 form to the SEC on November 16.
Experts predict that the SEC will approve a Bitcoin spot ETF in early 2024, followed by the anticipated swift approval of an Ethereum spot ETF.