The Ethereum price has experienced a decline of approximately 25% since reaching its peak in mid-March at around $4,100, currently hovering just above $3,000. This drop is consistent with the overall market trend, particularly Bitcoin’s price decrease of about 22% during the same period. However, there may be another factor contributing to ETH’s price decrease, as the German government only sells BTC and not ETH, and Mt. Gox does not possess any ETH. Could it be possible that Ethereum is facing its own version of the “Mt. Gox” scenario?
Chinese crypto journalist Colin Wu (@WuBlockchain) recently highlighted the significant movement of ETH funds by the Golem project, an Ethereum-based initiative that conducted a notable Initial Coin Offering (ICO) in 2016. Wu reported that “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.”
Further analysis by Lookonchain revealed the scale of these transactions, stating that “Golem has sold 24,400 ETH ($72M) on Binance, Coinbase, and Bitfinex in the last 3 days, currently holding 127,634 ETH ($372M). Golem raised 820,000 ETH through ICO in November 2016 when the price of ETH was only $10.2.”
The Golem ICO, which took place in November 2016, was a significant event in the crypto industry. The project aimed to establish a decentralized supercomputer by leveraging the combined computing power of users’ machines, ranging from personal laptops to entire data centers. The concept was to enable users to rent out their computing resources to others.
During its ICO, Golem raised approximately 820,000 ETH, valued at around $8 million at the time, in just 29 minutes, symbolizing the ICO bubble. This funding was intended for the development of the Golem network. Despite its ambitious objectives, Golem’s market relevance has waned significantly, with its token now trading at just $0.32 (#151 by market cap), a substantial decline from its peak price of $1.32 in January 2018.
Criticism from industry experts has been harsh. Adam Cochran, a partner at CEHV, criticized Golem for sitting on their ETH without taking action. Jimmy Ragosa, an advisor at Sismo, sarcastically commented on Golem’s dumping of ETH. Another perspective from @based16z speculated on the reasons behind Golem’s actions, suggesting that they may have insider knowledge.
The impact of Golem’s ETH sales on the price of ETH remains speculative. However, it is evident that the continuous selling pressure has likely played a role in the decline of the Ethereum price. As of the latest update, ETH is trading at $3,049.