Ethereum
Is This Ethereum ICO Project Responsible For ETH Price Drop?
The price of Ethereum has dropped by about -25% since its mid-March peak of around $4,100 and is currently trading just above $3,000. While this loss is in line with the overall market trend and in particular with Bitcoin’s price drop of about -22% over the same period, there could be another reason for the ETH price drop, 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 had its own “Mount Gox” ?
Is Ethereum Price Being Suppressed by Golem?
Chinese crypto journalist Colin Wu (@WuBlockchain) is the first reported via X on the large ETH fund movements of 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 analytics service Lookonchain further revealed the scale of these transactions via X: “Golem has sold 24,400 ETH ($72 million) on Binance, Coinbase, and Bitfinex in the last 3 days, and currently holds 127,634 ETH ($372 million). Golem raised 820,000 ETH via ICO in November 2016, when the price of ETH was only $10.2.”
THE Golem ICO Golem is an early and important event for the crypto industry that 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.
During its ICO, Golem raised around 820,000 ETH, valued at around $8 million at the time, in just 29 minutes, becoming a symbol of the The ICO bubble. This funding was supposed to be used to grow the Golem network. Despite its ambitious goals, Golem’s relevance in the market has declined significantly, with its token now trading at just $0.32 (151st in terms of market cap), a sharp drop from its all-time high price of $1.32 in January 2018.
Harsh criticism from cryptocurrency experts
Criticism has been strong among industry executives. Adam Cochran, a partner at CEHV, Express his displeasure via X: “Absolute bastards. They’ve been sitting on their ETH for centuries and doing nothing. And here we are in the age of distributed computing demand and they can’t even be relevant.”
Similarly, Jimmy Ragosa, an advisor at Sismo, ironically said: REMARK“Yes, Golem let us down. But at least they’re using those hundreds of millions of dollars to build critical infrastructure and widely adopted applications, right?”
Another perspective came from @based16z on X, who speculated on the reason for Golem’s actions: “Say what you want about Golem, but he’s not really a gamer. For them to spend $700 million on ETH after 7 years, I guess they know something.”
The influence of Golem’s sales on the price of ETH remains purely speculative. However, it seems clear that the constant selling pressure likely played at least some role in the drop in Ethereum’s price. At press time, ETH was trading at $3,049.
Featured image from Shutterstock, chart from TradingView.com