Why Did Ethereum Owners Cashed Out Their Coins?
Ethereum is the second most important virtual currency in the market and one of the most famous platforms in the crypto space. Ethereum is used by developers that create decentralized applications and by people transacting funds in an easy way or running smart contracts.
In the last months, Initial Coin Offerings (ICOs) have sold 125,000 Ether (ETH) in the last month, according to data collected by SANbase. 57 ICOs projects sold more than 125k ETH that were worth over $400 million dollars.
For those that do not know, SANbase is a platform for users to have access to important virtual currency data. The company has been established in 2017. They inform that Ether are being sold in order to have US dollars or BTC in case the crypto market keeps falling even further.
One of the most important sellers is the crypto exchange Cobinhood (COB), selling 25,630 ETH. Another important seller was Atonomi (ATMI), selling 12,000 ETH.
Additionally, the decentralized exchange platform 0x (ZRX) sold 1,500 ETH and Kyber Network (KNC) 2,000 ETH. There are other projects such as Propy (PRO) and Quarkchain (QKC) that have sold an important number of ETH as well.
The main problem here is that Ether is used by ICOs and projects to raise funds. If they need to pay for lawyers, marketing campaigns, development and research, then they need to sell their ETH. Additionally, if the market falls and they did not sell ETH, they would want to do it before it is too late, creating a panic selling in the market.
Another thing to mention is that ICOs did not have good months since May. The truth is that the enthusiasm investors had has been falling after May, creating less buying pressure for ETH. Indeed, since that month, Ethereum’s price fell over 40%, and some of the ICOs lost a good part of their funds.
Cofoun.it’s CEO and co-founder, Daniel Zakrisson, explained one of the things mentioned before in the article:
“It’s actually very straightforward. We’ve just spun off our internal treasury management to D2 Capital, to be able to offer treasury management services to other crypto startups. SO this move of our ether was actually a change of custodian and rebalancing ether to bitcoin, we didn’t sell anything to fiat.”
The founders of Cobinhood, a Taiwanese exchange, announced a new venture called DEXON Foundation, receiving $20 million dollars from IDG Capital. DEXON wants to allow developers to create decentralized applications in an easy way.
The sell-off related to Cobinhood could have harmed the markets and given the company between $48 million and $42 million dollars.
It is important to mention that the decentralized exchange has also decided to launch an airdrop rewarding COB holders with some Ether, but there is no information on whether the funds came from an exchange or a private wallet.
At the moment of writing, Ethereum is the second most important virtual currency in the market and is being traded around $291 dollars. In the last 24 hours it has registered an increase of 1.98% and has a market capitalization of $29 billion dollars.