Vitalik Buterin, the Ethereum co-founder, clapped back at critics Saturday, clarifying whether he sold any of the ETH he had acquired since 2018.
“All sales have been to support various projects that I think are valuable, either within the ethereum ecosystem or broader charity,” Buterin said in an Aug. 31 post on X.com.
Buterin cited biomedical research and development as an example. See below.
I haven’t sold and kept the proceeds since 2018. All sales have been to support various projects that I think are valuable, either within the ethereum ecosystem or broader charity (eg. biomedical R&D)
Buterin recently transferred 800 ETH (approximately $2.01 million) to a multisig wallet, which subsequently swapped 190 ETH for 477,000 USD Coin, a stablecoin pegged to the U.S. dollar.
The activity piqued the interest of those in the crypto community; some assumed Buterin was dumping his ETH.
This was the second major transfer from Buterin’s wallet in August. 3000 ETH, worth $8.04 million at the time, were moved just weeks before on Aug. 9 to the same multisig wallet.
Buterin clarified that none of his ETH has been sold for personal profit. Also, when ETH from his wallet appears on exchanges, it’s not him selling but the recipients of his donations, he adds.
“If you see an article saying ‘Vitalik sends XXX ETH to [exchange],’ it’s not actually me selling, it’s almost always me donating to some charity or nonprofit or other project, and the recipient selling because, well, they have to cover expenses,” he said.
Buterin breakdown
Buterin holds roughly 90% of his net worth in ETH, underscoring his commitment to the digital asset as a store of value.
Buterin’s claims about supporting “various projects” aren’t unfounded. Crypto.news reported that the 30-year-old entrepreneur donated 199 ETH (roughly $517,000) to ethOS, a mobile operating system based on the Ethereum blockchain.
Buterin has offloaded over 85,000 ($209 million) from his wallets in the past three years, according to Lookonchain data.
Buterin also donated 200 ETH to Effective Altruism Funds, an animal welfare initiative, on Aug. 15.
In 2021, he donated over 50 trillion SHIB tokens, worth over $1 billion at the time, toward the India Covid Relief Fund established by Polygon co-founder Sandeep Nailwal.
Vitalik Buterin transferred 800 ETH (worth $2.01 million) to a multisig wallet on Aug. 30. Shortly after, the multisig wallet swapped 190 ETH for 477,000 USDC.
vitalik.eth(@VitalikButerin) transferred 800 $ETH($2.01M) to a multisig wallet again 40 minutes ago.
The multisig wallet swapped 190 $ETH for 477K $USDC later.
This is not the first significant transfer by Buterin this month. On August 9, the ETH co-founder moved 3,000 ETH, valued at $8.04 million, to the same multisig wallet.
On June 12, 2023, Buterin transferred 1,000 ETH ($1.85 million) to a different multisig wallet, and in April 2023, Buterin moved 2,500 ETH ($4.6 million) to a cold storage wallet.
These transactions suggest Buterin is consolidating or reallocating funds, possibly for security or strategic purposes, but the precise reasons for the transactions remain unknown.
In October 2023, Vitalik Buterin posted on the decentralized social platform Warpcast, that he had not sold ETH for personal gain in over five years.
Instead, he wrote that he often uses his ETH holdings to support various communities and contribute to non-profit organizations.
For instance, in February 2023, Buterin donated Ethereum to aid victims of the 7.8 magnitude earthquake in Turkey.
As Ethereum ETFs gain traction and Bitcoin loses momentum, investors are turning to new and emerging tokens.
We’re a month into the launch of Ethereum ETFs and current data shows that Ethereum is gradually making headway in the ETF space. Meanwhile, Bitcoin ETFs have lost some of the momentum they initially had. Numbers wise, however, Bitcoin still has the upper hand with $49 billion in assets, while Ethereum ETFs have only managed around $7 billion.
Yet, despite all of this push, BTC’s price has further dipped in the past 24 hours, landing at $59,377 at press time. This decline is driving investors to venture into new and unexplored corners of the crypto space. Among new players is an interesting new low-supply token — BitNance.
BitNance (BTN) is a store-of-value token that runs on the BNB Smart Chain (BSC). It has a token supply of 10 million tokens, out of which 5.6 million has been allocated for its presale. 2.75 million is reserved for centralized exchanges and the rest of the supply will be used as initial liquidity on listing day. This gives early investors and adopters the chance to boost their earnings before it is for sale to the masses.
The current presale price of a token is fixed at $0.357. However, the expected price once the token is listed on exchanges is forecasted to be $0.465.
While some projects explore dynamic supply mechanisms to navigate market fluctuations, BTN adopts a more conservative approach, limiting supply to less than 11 million coins. This is similar to Bitcoin’s original whitepaper design and it’s an effort to establish long-term stability despite the market’s notorious volatility. For this reason, there are several analysts calling BTN the new “Bitcoin on Binance Blockchain.”
But this is not the only reason for this comparison. Like Bitcoin, it is a fully decentralized network that lets investors trade and transact with no central authority. The founders of BitNance have renounced control over contracts. Moreover, similar to Bitcoin, BitNance aims to be not just a cryptocurrency, but also a store of value and a hedge against inflation.
With BitNance’s report of 60,000 tokens sold in its presale, this new coin is on the radar of analysts and investors. The BitNance team also hints that there could be a crypto product with BTN as the native coin during its presale’s final days.
All this shows that the BitNance project is definitely exciting. But only time will tell if it’s worth the hype. New projects, especially those with low supply like BTN, can be highly volatile. Investors must be extra cautious when parting with their money.
Following the latest allegations, Binance, the leading cryptocurrency exchange, witnessed a huge number of Bitcoin and Ethereum outflows.
According to data provided by Coinglass, a total of 51398 Bitcoin (BTC) tokens left Binance over the past month. Data shows that the majority of the outflows, around 48,000 coins, happened on Aug. 27 as many Palestinian users complained of frozen assets on the exchange.
BTC balance on Binance – Aug. 29 | Source: Coinglass
In addition, Binance, the largest crypto exchange by trading volume, saw over 275,200 Ethereum (ETH) tokens leave the exchange in the past 30 days. The platform witnessed an outflow of 86,486 ETH over the past 24 hours alone.
The total amount of BTC and ETH that left Binance over the past month is worth roughly $3.7 billion at the reporting time.
Despite the outflows, data shows that Binance is still the second-largest Bitcoin and Ethereum holder with a total balance of 566,113 BTC and 3.44 million ETH. Coinbase is currently leading the chart with 824,887 BTC and 4.44 million ETH, according to Coinglass data.
Most of these outflows came after Ray Youssef, the co-founder and former CEO of the peer-to-peer crypto exchange Paxful, claimed that Binance seized the assets of its Palestinian users.
Binance told crypto.news that only a limited number of users have been affected due to the exchange’s anti-money laundering and terror financing policies.
Many pro-Palestine users on X have been sharing a new hashtag, #BoycottBinance. Some have even started deleting their Binance accounts and criticizing the exchange’s move to freeze the funds of Palestinian users.
Vitalik Buterin has likely provided financial support to ethOS, a project promoted as the world’s first Ethereum mobile operating system.
According to Arkham data, Ethereum (ETH) co-founder Vitalik Buterin sent 199.9 ETH, valued at over $517,000, to a Gnosis Safe multi-signature contract. The leading speculation is that Buterin’s transfer was a donation to the Ethereum phone project called ethOS.
Built by pseudonymous developers at Freedom Factory, this open-source initiative was initially launched on select Android devices in late 2022 and redeployed the following year.
ethOS is an Ethereum-native mobile operating system that allows users to write blockchain code and deploy ETH-based decentralized applications. The team, formed in 2021, plans to release additional hardware offerings this year or next, according to the official ethOS website.
Is ethOS Ethereum’s answer to Solana Saga?
Fifteen years after the debut of Bitcoin (BTC), the blockchain industry is focused on achieving mass adoption by providing easy access to Web3 and real-world utility.
Integrating blockchain standards with mobile devices like smartphones has often been a challenge, but developments in recent years suggest progress.
In June 2022, Solana Labs, the entity behind Solana (SOL), introduced the Saga mobile device. The hardware was built atop Android’s OS and pre-loaded with Solana dapps like Phantom Wallet.
Slow sales initially cast doubt on Saga’s success, and Solana took nearly a year to sell 20,000 units. However, Saga 2.0 improved this track record, selling 100,000 units in pre-orders within a month.
At press time, Saga appeared to be ahead of ethOS, although the two projects have adopted different approaches to merging blockchain and mobile technology. The Ethereum and Solana blockchains have seen significant growth in the past year. If both ethOS and Saga continue to develop, they may eventually become full-fledged competitors in the blockchain mobile market.
Ethereum price will likely drop to $2,000 first before jumping to $4,000, according to Polymarket, the popular prediction platform.
Odds of Ethereum (ETH) falling to $2,000 before Dec. 31 have been rising since Aug. 25, when they bottomed at 54%. These odds increased to 60% on Aug. 27 as the coin dropped to $2,600 from this week’s high of $2,818.
Ethereum, like most altcoins, has been in a strong downward trend since March, when it peaked at $4,085. Therefore, the odds of falling to $2,000 have risen since the coin needs to drop by 23%. It would need to rise by 54% to reach $4,000.
Another Polymarket poll with $231,000 in assets shows an 8% chance of Ether rising to $3,000 before September. Most traders in another poll with $1.1 million don’t expect it to hit a record high this year.
Ethereum has faced numerous challenges this year. It is experiencing substantial competition in the stablecoin market, where Tron (TRX) is handling billions of dollars in transactions each day.
It is also facing competition in the Decentralized Finance industry, where Solana (SOL) had the most DEX volume in July as demand for its meme coins rose. Solana’s DEX volume was $57 billion in July, while Ethereum handled $54.5 billion.
This month, however, Ethereum is leading by far, having handled $50 billion compared to Solana’s $33 billion.
The biggest challenge that Ether is facing is that its exchange-traded funds are not having traction among investors. Data by SoSoValue shows that these funds have had a cumulative outflow of $477 million since their inception. They have had outflows in the past eight consecutive days.
Additionally, Ether has formed a series of lower highs and lower lows. Most importantly, it has also formed a death cross as the 200-day and 50-day Exponential Moving Averages have crossed each other.
It has also formed a bearish flag chart pattern, pointing to more downside. If this happens, the next point to watch will be this month’s low at $2,113. A break below that point will raise the chances of the coin falling to $2,000.
Spot Bitcoin exchange-traded funds in the United States have been seeing increased investor confidence as the cumulative net inflows reach a new all-time high.
According to data provided by Farside Investors, spot Bitcoin (BTC) ETFs recorded a net inflow of $202.6 million on Aug. 26. The total net inflows in the investment products surpassed the $18 billion mark.
The COO of Bitget Wallet Alvin Kan told crypto.news that “investors are likely turning to more stable assets.”
“The trend reflects investors’ confidence in Bitcoin, which will help drive the price of Bitcoin and the stability of the market in the longer run.”
Alvin Kan, the COO of Bitget Wallet, talking on spot BTC ETFs’ inflows.
Notably, most of the inflows, worth $224.1 million, came from BlackRock’s IBIT. Per Farside Investors, Franklin Templeton’s EZBC and WisdomTree’s BTCW recorded $5.5 million and $5.1 million in inflows, respectively.
On the other hand, Bitwise’s BITB, Fidelity’s FBTC and VanEck’s HODL funds saw $16.6 million, $8.3 million and $7.2 million in outflows. The remaining spot BTC ETFs stayed neutral.
Despite the increasing inflows into spot Bitcoin products, the asset’s price declined by 1.3% in the past 24 hours and is trading at $63,000 at the time of writing.
The COO of Bitget Wallet, formerly known as BitKeep, believes that BTC’s bullish momentum majorly depends on the U.S. Federal Reserve’s rate cuts. This could also help the market to become “fully active,” he added.
“In the short term, the Federal Reserve’s announcement of potential rate cuts could lead to increased market liquidity, a shift in investor behavior towards riskier assets, and potential volatility due to ongoing geopolitical tensions.”
Alvin Kan, the COO of Bitget Wallet, told crypto.news.
While Bitcoin ETFs have been thriving, spot Ethereum (ETH) ETFs in the U.S. saw their eighth consecutive day of net outflows yesterday. Per data from Farside Investors, these investment products registered $13.2 million in net outflows, coming from ETHE, FETH and EZET.
Ethereum slipped by 1.7% over the past day and is currently changing hands around the $2,700 mark.
Driven by positive market sentiment, crypto investment products saw their largest inflows in weeks, data from CoinShares shows.
Crypto investment products attracted over $530 million in inflows last week, the highest in five weeks, as investors reacted to dovish signals from Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium, according to a report by CoinShares head of research James Butterfill.
He noted that even though trading volumes were lower than in recent weeks, they “remained high, reaching $9 billion for the week” as Powell’s remarks, hinting at a potential interest rate cut as early as September, spurred significant market activity.
While the U.S. led the inflows with $498 million, Hong Kong and Switzerland also saw gains of $16 million and $14 million, respectively. Butterfill added that Germany bucked the trend with outflows totaling $9 million, leaving it as “one of the only countries with net outflows year-to-date.”
Bitcoin (BTC) was the primary beneficiary, with inflows of $543 million, underscoring its sensitivity to shifts in interest rate expectations, with the bulk of BTC inflows occurring on Friday, Aug. 23, immediately following Powell’s comments, Butterfill added.
Although Ethereum (ETH) saw contrasting movements with outflows of $36 million last week, new Ethereum ETFs have gained traction, attracting $3.1 billion in inflows over the past month, the CoinShares head of research says, noting that those inflows were “partially offset by outflows from the Grayscale Trust of $2.5 billion.”
Ethereum has outperformed Bitcoin in terms of price performance, especially when looking at time frames since its inception, halving years, and bull market periods. However, ETH has consistently underperformed since the bear markets of 2018-2019 and 2022-2023. In the 2024 halving year, for the first time, Ethereum is considerably trailing behind Bitcoin. In fact, it has been underperforming against Bitcoin for the past three years.
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ETH/BTC ratio plummets to 3.5-year low
Although fractals, a concept where similar patterns repeat over different timeframes, are not a foolproof method for predicting future outcomes, they provide valuable context into what might lie ahead.
In previous halving years, the ETH/BTC ratio broke down from its support line around September to December, only to begin an uptrend in the first quarter of the following bull market year. A similar scenario could unfold in 2024, as Ethereum has once again broken through its support. However, this time, the situation is more concerning. Unlike previous halving years, where the support line was relatively recent, the current support at 0.05 has held strong for the past 3.5 years, which suggests a more bearish outlook for Ethereum.
Another point of comparison can be drawn from 2019 when the Federal Reserve started cutting interest rates—a move that might recur in September 2024. Back in 2019, from the time the Fed began cutting rates until it stopped, the ETH/BTC ratio dropped by 22%.
Not only did the ratio drop in all these cases, but Ethereum’s price itself also performed negatively, except for 2020. However, the critical issue isn’t just whether the price went up or down; it is also whether holding Ethereum was the better investment decision. History has shown that, in similar circumstances, holding Bitcoin proved to be the more advantageous choice—and 2024 may very well continue that trend.
Ethereum supply reverses course and turns inflationary.
The supply of Ethereum had been decreasing steadily after the 2022 Merge. The decrease in Ethereum’s supply works through a mechanism called “burning,” which was introduced with the Ethereum Improvement Proposal (EIP) 1559 in August 2021. Basically, a portion of the transaction fees paid in ETH is burned or permanently removed from circulation. This reduces the total supply of ETH over time, especially during periods of high network activity when transaction fees are higher.
The reason why the supply of Ethereum started to drop following the 2022 Merge was because the network transitioned from a proof-of-work to a proof-of-stake consensus mechanism. Under PoW, new ETH was continuously issued to miners as rewards for validating transactions, which contributed to an increase in Ethereum’s total supply. However, with the Merge and the shift to PoS, the issuance of new ETH significantly decreased because validators, who now secure the network, receive much lower rewards compared to miners.
The Dencun upgrade in March 2024 marked a turning point, reversing this deflationary trend and making Ethereum’s supply inflationary once again. It introduced proto-danksharding and “blobs,” which optimize data storage and reduce transaction fees on layer-2 networks. Although Dencun improved scalability and made transactions more cost-effective, it also led to a major decrease in the amount of ETH being burned, which had been a critical factor in keeping Ethereum’s supply deflationary.
As a consequence, Ethereum’s supply began to increase, with over 213.5K ETH added to circulation since the Dencun upgrade. For comparison, Ethereum’s supply is now at the same level it was back in May 2023.
Negative ETF Flows Continue
Many expected that the approval of Ethereum ETFs would boost ETH by increasing demand and driving prices higher. However, this has not been the case so far. Instead, ETF outflows have become a concern, with a total of $465 million flowing out since trading began. The main driver of the trend is Grayscale’s ETHE, which has seen massive outflows, overshadowing the positive inflows from other Ethereum ETFs. The scale of the outflows from ETHE is so large that it creates a net negative effect when considering all Ethereum ETFs collectively.
An Ethereum ETF holds a certain amount of Ethereum, and each share represents a fraction of the total Ethereum it holds. When many investors want to buy ETF shares, the demand can push the price of the ETF shares above the actual value of the underlying Ethereum. In this case, Authorized Participants (APs), large financial institutions that work closely with the ETF provider, step in. The APs purchase ETH on the open market and exchange it with the ETF provider for new ETF shares, which they then sell to investors in the market at a higher price, making a profit. The process increases the supply of ETF shares, which helps bring the share price back in line with the value of the underlying assets.
Conversely, when there is low demand for the ETF, the price of its shares might fall below the value of the underlying Ethereum. Here, APs buy the undervalued ETF shares from the market, return them to the ETF provider, and receive Ethereum in exchange. They can then sell Ethereum on the open market at a higher price, profiting from the arbitrage. This reduces the supply of ETF shares and helps the price align more closely with the value of the underlying Ethereum.
Simply put, the ETH selling from APs as they redeem ETF shares could be one of the reasons why ETH’s price is down and struggling to recover.
Conclusion
While current data might suggest a bearish outlook for Ethereum, it remains a fundamentally strong asset. The number of active addresses on both its main chain and Layer 2 networks continues to increase. Ethereum still leads the blockchain industry, holding the top spot in total value locked (TVL) across DeFi platforms, with many projects being developed on its ecosystem. Furthermore, Ethereum continues to see regular development and upgrades.
However, given the current market conditions and the ongoing ETF outflows, Ethereum may not be the best investment in the short term, particularly through the rest of 2024. Yet, as we look forward to 2025, starting in Q1, Ethereum is likely to regain its momentum and could once again outperform Bitcoin in terms of returns, much like it has in previous market cycles.
