Ethereum (ETH) Crashes as Whale Wallets Move Funds
The Ethereum community suspects one of the Ethereum developers is moving funds for selling.
Ethereum (ETH) prices are in freefall, and a large-scale transaction may be one of the reasons for the rapid drop. A wallet that received 380,000 ETH from the Genesis wallet sent two large transactions, in effect emptying out the previous addresses. The receiving wallet is an unknown whale account, with more than 454,547 ETH. Another transaction of 115,000 ETH came from a different whale wallet, suggesting some form of reorganization. So far, the wallets have not sent the funds directly to exchanges.
The move was seen as a sign of capitulation and loss of trust for ETH. Additionally, the ETH sold was part of the pre-mined stash that also raised criticism of the Ethereum project.
The general market crash saw ETH prices drop more precipitously, losing more than 31% for the last week. ETH is down to $113.85, losing almost half its value since it hovered above $200 for weeks. ETH was down more than 15% just this Monday, as all altcoins suffered a crash.
Rapid selling and activity saw ETH trading volumes spike to above $3 billion, which is unprecedented volume. However, there are expectations that ETH may not survive and would return to double-digit prices. ETH has been weighed down by the fate of tokens, which are also viewed with skepticism, especially given the hawkish stance of regulators. Ethereum-based tokens could be considered unregistered securities, and ICO projects are at risk of crackdowns.
The role of ETH as a utility coin has added to the price depression. Selling by ICOs and miners has kept the prices low. Additional periods of high volatility trading have hurt prices.
At the same time, Vitalik Buterin’s wallet remains untouched, with 365,003.48 ETH unmoved for many days. Buterin has been known to discourage speculative trading, and not speak in support of high ETH prices.
The drop in ETH was also damaging to investors, as the coin was seen spiking as high as $5,000. However, ETH did not manage to hold on to levels above $1,000 for long. The project also sees its chief use, as a fundraising means for ICOs, slow down in the past months. ICOs have raised just around $76 million in November, based on ICOData.