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Ethereum Founder Transfers $1M to Coinbase: Major Sell Off Coming?

Published August 21, 2023 3:25 PM
Teuta Franjkovic
Published August 21, 2023 3:25 PM
Key Takeaways
  • Ethereum co-founder Vitalik Buterin moved 600 ETH to Coinbase
  • His action follows a general market downturn as Ether’s value dropped by 10%
  • ETH price usually drops after a transfer by Buterin or the Ethereum Foundation
  • There is a chance that Buterin will attempt a significant sell off

On-chain data  and blockchain security platform PeckShield showed that a wallet related to an Ethereum (ETH) co-founder Vitalik Buterin transmitted 600 ETH, worth $1 million, to Coinbase earlier today, August 21.

The reason for the transaction is still unknown, but transfers to exchange are typically understood to indicate a desire to sell.

Buterin’s transaction may increase selling pressure on Ethereum, whose price has recently declined.

On-chain detective Lookonchain revealed  that on August 20, Vitalik.eth wallet withdrew 1,000 ETH – about $1.67 million – and refunded 251,000 RAI on the DeFi platform Maker.

Dubbed “vitalik.eth” wallet, which contains 3,993 ETH valued at $6.5 million as of publication time, was made seven years ago. According to the Arkham Intelligence dashboard , this wallet belonged to the co-founder of Ethereum.

There are also $84,000 worth of USD Coin (USDC) and $58,000 worth of Wrapped Ethereum (WETH) in the wallet.

Buterin has previously transferred assets to a cryptocurrency exchange as he sent 200 ETH  to Kraken in March. Buterin also sold a number of unwanted altcoins  (sh*tcoins) for 439.25 ETH.

Buterin’s Transaction Coincides with Crypto Market’s Recent Decline

Buterin’s move followed last week’s (August 17) flash fall in the cryptocurrency market, when the price of ETH dropped below $1700 for the first time since June and it’s still trading below that threshold.

Data from the blockchain analysis company Glassnode  show that Ethereum owners fiercely hold their positions even as they quickly transfer assets among cryptocurrency exchanges.

ETH ballance change
Credit: Glassnode

The data aggregator reports that 14.88 million ETH are currently held on exchanges, a figure not seen since 2018.

Exchange outflows are typically interpreted as a positive sign that the asset is being retained for the long term.

“Ethereum’s Transitions Vital For Success” – Buterin

In June, Buterin explained  that the Ethereum blockchain “fails” outright in the absence of an adequate scaling infrastructure to lower transaction costs.

“Ethereum fails because each transaction costs $3.75 ($82.48 if we have another bull run) and every product aiming for the mass market inevitably forgets about the chain and adopts centralized workarounds for everything,” he claimed .

Buterin then said  that smart contract wallets represent another area of failure.

He explained  that switching to smart contract wallets had certain drawbacks because managing several addresses at once presents challenges from the user experience perspective.

To effectively shift into an on-chain world with zero-knowledge rollups, Buterin said  that wallets would need to secure data in addition to cryptographic assets.

“In a ZK world, this is no longer true: the wallet is not just protecting authentication credentials, it’s also holding your data,” he added .

For the third and final shift, privacy, new identification, reputation, and social recovery mechanisms will be required.

Without the third shift, he claimed , “Ethereum fails because making all transactions (and POAPs, etc.) publicly visible for anyone to see is far too high a privacy sacrifice for many users and everyone moves onto centralized solutions that at least somewhat hide your data.”

Ethereum’s co-founder proposed using stealth addresses to alleviate this problem.

A Turning Point for ETH

Ethereum is at a turning moment because the chart structure is so fragile. ETH price is expected to drop sharply if it brokes through the $1,600–$1,550 level.

The monthly average of Ethereum ($ETH) addresses that are currently active is lower than the annual average, indicating little on-chain activity.

According to CoinMarketCap , at the time of writing, ETH was trading at $1,667.56, that represents a 0.36% fall over the last 24 hours.

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