The Ethereum Foundation is dumping ETH again, how much longer can the foundation's funds last? Does Ethereum still have a future?

Author: Tina

Editor: Little Deer

The Ethereum Foundation has recently sold ETH again, which has intensified the decline in ETH prices. So, how much longer can the Ethereum Foundation's funds last? What does the future hold for Ethereum?

1. ETH Price Performance

In this round of the bull market, BTC has surpassed the historical high of the previous bull market, but ETH, as the second largest cryptocurrency in the world, has not yet broken its historical high.

The historical highest price of ETH occurred in November 2021, around 4800 dollars, while in this bull market, the highest price of ETH appeared in March this year, only around 4000 dollars.

Currently, the ETH price is around $2400, down 40% from the high in March. Compared to other altcoins that can drop 70% at any time, ETH's 40% drop is quite good.

However, as the pioneer of smart contracts and the second largest cryptocurrency, the market has placed overly high expectations on Ethereum. Given its price performance, especially in comparison to BTC, there is a significant gap, and ETH's performance falls far below everyone's psychological expectations, which is certainly hard for holders to accept.

2. Ethereum Foundation Continues to Sell Off

In 2024, the Ethereum Foundation had at least 6 instances of selling ETH, with a sale of up to 35,000 ETH on August 24.

Based on the above several selling records, after the Ethereum Foundation sold ETH, it basically experienced a decline, or in other words, it was often sold at a temporary price peak, leading some to sarcastically say that the Ethereum Foundation is very good at selling coins.

Ethereum Foundation (, abbreviated as EF), is a non-profit organization dedicated to supporting the development of Ethereum and related technologies. Its activities mainly revolve around providing financial and non-financial support for innovative projects within the Ethereum community.

Therefore, the Ethereum Foundation itself is an organization that continuously spends money. Selling ETH to support the development of the Ethereum ecosystem is actually normal. In the future, it will definitely continue to sell ETH. To maximize profits, of course, the higher the selling price of ETH, the better.

However, for ETH holders, the foundation's selling behavior will be interpreted as a lack of confidence in ETH from the project side, shaking the confidence of coin holders. The selling behavior further stimulated the decline of ETH. In the context of ETH's continuous price drop, the foundation's selling is undoubtedly adding insult to injury.

Regarding the foundation's continuous sale of ETH, some ETH holders have even begun to worry about how long the funds can last with such ongoing dumping. Once the foundation sells all the ETH, what will support the development of the Ethereum ecosystem?

On September 5th, Ethereum Foundation core researcher Justin Drake replied that the Ethereum Foundation's current annual budget is approximately $100 million. At current prices, the Foundation's wallet still holds $650 million in ETH, roughly estimating that the Ethereum Foundation's funding reserves can cover 10 years of budget.

3. Continuous Net Outflow of Spot Ethereum ETF

On July 23, the U.S. Securities and Exchange Commission (SEC) approved the applications for 9 spot Ethereum ETFs, marking an important step for digital assets entering the mainstream financial market in the United States, with a first-day trading volume exceeding $1 billion.

After the SEC in the United States approved the Bitcoin spot ETF, the price of Bitcoin continued to rise for two months, eventually reaching a historical high of $73,000 in mid-March.

In this regard, many Ethereum holders are also filled with anticipation, believing that the approval of a spot Ethereum ETF will replicate the brilliance of the Bitcoin spot ETF, leading ETH prices to reach new highs.

However, despite the approval of the spot Ethereum ETF being seen as an epic positive, the ETH price did not rise as expected, with continued net outflows of ETH and a persistent decline in price.

Of course, objectively speaking, we cannot blame ETH entirely; the entire crypto market has been in a downtrend for the past few months, and it has been difficult for ETH to stabilize as well.

4. Insufficient Innovation in Ethereum

The poor performance of ETH prices is also related to the lack of strong innovation from Ethereum in this round of bull market, leading to insufficient market confidence in the future of Ethereum.

In the previous two bull markets, Ethereum undoubtedly played a core role as a leader.

Taking the 1CO (Initial Coin Offering) bull market as an example, Ethereum has opened an unprecedented new era where anyone or any project can easily issue cryptocurrencies and create decentralized applications (DApps) on Ethereum. It has also greatly promoted the popularization and application of blockchain technology, facilitating the vigorous development of the entire cryptocurrency ecosystem.

Entering a new round of DeFi bull market, Ethereum once again becomes the pioneer leading the trend.

DeFi is reshaping the financial industry at an unprecedented speed. Through smart contract technology, DeFi platforms can provide users with financial services that are intermediary-free, highly transparent, and easy to operate, lowering the barriers to financial services and enabling more people to enjoy the convenience of financial technology.

In the DeFi bull market, classic DeFi platforms such as Uniswap, AAVE, Compound, and Synthetix were born, and they have all become important infrastructure in the crypto industry.

However, in this round of the crypto bull market, Ethereum lacks industry innovations to compete with ICOs and DeFi, and its future development is also unclear. As Zhu Su mentioned, the biggest problem with the Ethereum Foundation is its inability to provide a coherent roadmap and effective leadership for the ecosystem at present.

5. Trading volume is being diverted by Solana and Layer2

Ethereum, as the pioneer of smart contracts and the leader of public chains, does not have an advantage in terms of transaction gas fees and transaction confirmation speed compared to other public chains, which has also given rise to opportunities for other public chains.

For example, in the public chain ecosystem, Solana far surpasses Ethereum in terms of transaction confirmation speed and gas fees, resulting in many DePIN and AI projects choosing to build on the Solana public chain.

In addition to Layer 1 public chains like Solana diverting transaction volume from the Ethereum mainnet, Layer 2 has also taken away some transaction volume from the Ethereum mainnet, resulting in a continued slump in Ethereum mainnet transaction volume, with gas fees often dropping below 1 Gwei.

The continuous net outflow of Ethereum spot ETFs, the sell-off by the Ethereum Foundation, a lack of innovation in the ecosystem, and the absence of a clear development roadmap have led to concerns about the future of Ethereum in the market, and the ETH price has remained stagnant.

In summary, there are many bearish views on ETH in the current market. In addition to the inherent problems within the Ethereum ecosystem, it is also influenced by the overall trend of the cryptocurrency market. Aside from Bitcoin, most altcoins have far outpaced ETH, and the market has set too high expectations for ETH.

Additionally, the Ethereum ecosystem is still worth looking forward to. For example, the Pectra upgrade is the next major milestone for Ethereum, expected to launch in the first quarter of 2025. It will merge the Prague (execution layer) and Electra (consensus layer) updates, and it is likely that the hype for the Pectra upgrade will start in the fourth quarter of this year.