Author:Tina
Editor: Xiaolu
The Ethereum Foundation recently sold off ETH again, which exacerbated the decline in ETH prices. So, how long can the Ethereum Foundation's funds last? What about the future of Ethereum?
1. ETH price performance
In this bull market, BTC has broken through the historical high of the previous bull market, but ETH, as the world's second largest cryptocurrency, has not yet broken through its historical high.
The highest price in ETH history was in November 2021, at around US$4,800. In this round of bull market, the highest price of ETH occurred in March of this year, which was only around US$4,000.
The current price of ETH is around $2,400, which is 40% lower than its high in March. Compared with other altcoins that often drop by 70%, ETH's 40% drop is already quite good.
However, as the pioneer of smart contracts and the second largest cryptocurrency, the market has placed too high expectations on Ethereum. For such price performance, especially with such a big gap compared with BTC, ETH's performance is far below everyone's psychological expectations, which is certainly difficult for holders to accept.
In 2024, the Ethereum Foundation sold ETH at least 6 times. On August 24, the foundation sold as many as 35,000 ETH.
In 2024, the Ethereum Foundation sold ETH at least 6 times. On August 24, the foundation sold as many as 35,000 ETH.
Judging from the above-mentioned selling records, after the Ethereum Foundation sold ETH, ETH basically fell, or it was sold to a stage-by-stage high price many times. Some people ridiculed the Ethereum Foundation for being good at selling coins.
Committed to supporting the development of Ethereum and related technologies, its activities mainly revolve around providing financial and non-financial support for innovative projects within the Ethereum community.
Therefore, the Ethereum Foundation itself is an organization that is constantly spending money. It is normal for it to sell ETH to support the development of the Ethereum ecosystem. It will definitely sell ETH in the future. In order to maximize profits, of course, the higher the selling price of ETH, the better.
But for ETH holders, the foundation’s selling behavior will be interpreted as the project party is not optimistic about ETH, which will shake the confidence of coin holders. The selling behavior further stimulates the decline of ETH. When the price of ETH continues to fall, the foundation’s selling is undoubtedly adding insult to injury.
Some ETH holders are even beginning to worry about the continued sale of ETH by the Foundation. How long can the Foundation sustain the funds if it continues to sell? Once the Foundation sells all the ETH, what will it use to support the development of the Ethereum ecosystem?
On September 5, Justin Drake, a core researcher at the Ethereum Foundation, responded that the Ethereum Foundation’s current annual budget is approximately $100 million. Based on the current price, there are still $650 million in ETH in the foundation’s wallet. Roughly estimated, the Ethereum Foundation’s financial reserves can cover 10 years of budget.
On July 23, the U.S. Securities and Exchange Commission (SEC) approved the application of nine spot Ethereum ETFs, marking an important step for digital assets to enter the mainstream financial market in the United States, with a first-day trading volume of more than $1 billion.
On July 23, the U.S. Securities and Exchange Commission (SEC) approved the application of nine spot Ethereum ETFs, marking an important step for digital assets to enter the mainstream financial market in the United States, with a first-day trading volume of more than $1 billion.
After the U.S. SEC approved a Bitcoin spot ETF, Bitcoin prices continued to rise for two months, eventually reaching an all-time high of $73,000 in mid-March.
The price hit a new high.
However, although the approval of the spot Ethereum ETF was seen as an epic positive, the price of ETH did not rise as expected, and ETH continued to experience net outflows and prices continued to fall.
Of course, objectively speaking, we cannot blame ETH entirely. The entire crypto market has been declining in recent months, and it is difficult for ETH to stabilize.
The poor price performance of ETH is also related to the lack of strong innovation in Ethereum in this round of bull market, which leads to the market’s lack of confidence in the future of Ethereum.
The poor price performance of ETH is also related to the lack of strong innovation in Ethereum in this round of bull market, which leads to the market’s lack of confidence in the future of Ethereum.
In the past two bull markets, Ethereum undoubtedly played a core role as a leader.
Taking the 1CO (Initial Coin Offering) bull market as an example, Ethereum has ushered in an unprecedented new era where anyone or any project can easily issue cryptocurrencies and create decentralized applications (DApps) on Ethereum. It has also greatly promoted the popularization and application of blockchain technology and promoted the vigorous development of the entire cryptocurrency ecosystem.
It is reshaping the financial industry. Through smart contract technology, the DeFi platform can provide users with financial services that do not require intermediaries, are highly transparent, and are easy to operate, lowering the threshold for financial services and allowing more people to enjoy the convenience of financial technology.
The Ethereum spot ETF has continued to experience net outflows, the Ethereum Foundation has been selling off, the ecosystem lacks innovation, and there is no clear subsequent development roadmap. These factors have caused the market to be concerned about the future of Ethereum, and the price of ETH has not been able to go up.
However, in this round of crypto bull market, Ethereum lacks industry innovation to compete with ICO and DeFi, and its future development is unclear. As Zhu Su said, the biggest problem of the Ethereum Foundation is that it cannot provide a coherent roadmap and effective leadership for the ecosystem.
Ethereum is the pioneer of smart contracts and the leader of public chains. However, compared with other public chains, Ethereum’s transaction gas fees and transaction confirmation speed are not advantageous, which also gives other public chains an opportunity to rise.
Ethereum is the pioneer of smart contracts and the leader of public chains. However, compared with other public chains, Ethereum’s transaction gas fees and transaction confirmation speed are not advantageous, which also gives other public chains an opportunity to rise.
For example, in the public chain ecosystem, Solana is far superior to Ethereum in terms of transaction confirmation speed and gas fees, which has led many DePIN and AI projects to choose to be created on the Solana public chain.
The transaction volume on Fangzhu.com has caused the transaction volume on the Ethereum main network to continue to decline, and the gas fee has often dropped below 1Gwei.
The Ethereum spot ETF has continued to experience net outflows, the Ethereum Foundation has been selling off, the ecosystem lacks innovation, and there is no clear subsequent development roadmap. These factors have caused the market to be concerned about the future of Ethereum, and the price of ETH has not been able to go up.
In short, there are many people in the market who are pessimistic about ETH. In addition to the problems existing in the Ethereum ecosystem itself, it is also affected by the overall market conditions of the current crypto market. Except for Bitcoin, the growth rate of most altcoins has far exceeded that of ETH. It’s just that the market has given ETH too high expectations.
In addition, the Ethereum ecosystem is still worth looking forward to. For example, the Pectra upgrade is the next major milestone of Ethereum, which is expected to be launched in the first quarter of 2025. It will merge the Prague (execution layer) and Electra (consensus layer) updates. It is likely that the Pectra upgrade will start to be hyped in the fourth quarter of this year.
P.S. This article does not constitute any investment advice
