Is This Ethereum ICO Project To Blame For ETH’s Price Slump?
09 July 2024 - 2:00AM
NEWSBTC
The Ethereum price has fallen by around -25% since its mid-March
peak at around $4,100 and is currently trading just above $3,000.
While this loss is in line with the broader market trend and in
particular Bitcoin’s price drop of about -22% in the same time,
there could be another reason for ETH’s price slump, which seems
plausible since the German government only sells BTC and not ETH,
and Mt. Gox doesn’t own any ETH either. But what if Ethereum has
its very own “Mt. Gox“? Is The Ethereum Price Suppressed By Golem?
Chinese crypto journalist Colin Wu (@WuBlockchain) first reported
via X on the significant movements of ETH funds by the Golem
project, an Ethereum-based project that conducted a notable Initial
Coin Offering (ICO) in 2016. According to Wu, “Golem, a project
that raised 820,000 ETH in ICO in 2016, has transferred 36,000 ETH
to Binance, Coinbase, Bitfinex, etc. in the past 37 days, worth
about $115 million.” On-chain analysis service Lookonchain further
revealed the extent of these transactions via X: “Golem has sold
24,400 ETH ($72M) on Binance, Coinbase and Bitfinex in the past 3
days, and currently holds 127,634 ETH ($372M). Golem raised 820,000
ETH through ICO in November 2016, when the price of ETH was only
$10.2.” Related Reading: Justin Sun Potential $66 Million Loss
Revealed As Ethereum Price Declines The Golem ICO was an early and
significant event for the crypto industry which took place in
November 2016. Golem aimed to create a decentralized supercomputer
by harnessing the combined computing power of users’ machines, from
personal laptops to entire data centers. The idea was to allow
users to rent out their computing resources to others. In its ICO,
Golem raised approximately 820,000 ETH, which was valued at around
$8 million at the time, in just 29 minutes, becoming a symbol of
the ICO bubble. This funding was supposed to be used to develop the
Golem network. Despite its ambitious goals, Golem’s market
relevance has significantly diminished, with its token now trading
at just $0.32 (#151 by market cap), a stark decline from its peak
price of $1.32 in January 2018. Harsh Criticism From Crypto Experts
Criticism has been vocal among industry leaders. Adam Cochran, a
partner at CEHV, expressed his displeasure via X: “Absolute
bastards. Sat on their ETH for ages doing nothing. And here we are
in the era of demand for distributed compute and they can’t even be
relevant.” Related Reading: Doomsday for Ethereum? ‘A Crash Down To
$1,500 Is Coming,’ Says Skeptic, Here’s Why Similarly, Jimmy
Ragosa, an advisor at Sismo, sarcastically remarked, “Yes, Golem
has been dumping on us. But, at least, they are using these 100s of
millions of dollars to build critical scaling infra and widely
adopted apps, right?” Another perspective came from @based16z on X,
who speculated on the rationale behind Golem’s actions, “Say what
you want about Golem, but they’re not exactly a gambler. For them
to dump 700 million dollars in ETH after 7 years, I assume they
know something.” How strong the influence of Golem sales is on the
ETH price remains pure speculation. However, it seems clear that
the constant selling pressure has probably played at least a
certain role in the Ethereum price slump. At press time, ETH traded
at $3,049. Featured image from Shutterstock, chart from
TradingView.com
Ethereum (COIN:ETHUSD)
Historical Stock Chart
From Sep 2024 to Oct 2024
Ethereum (COIN:ETHUSD)
Historical Stock Chart
From Oct 2023 to Oct 2024