The Ethereum price has fallen by around -25% since its mid-March peak at around $4,100 and is currently trading just above $3,000. While this loss is in line with the broader market trend and in particular Bitcoin’s price drop of about -22% in the same time, there could be another reason for ETH’s price slump, 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 has its very own “Mt. Gox“?
Is The Ethereum Price Suppressed By Golem?
Chinese crypto journalist Colin Wu (@WuBlockchain) first reported via X on the significant movements of ETH funds by 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 analysis service Lookonchain further revealed the extent of these transactions via X: “Golem has sold 24,400 ETH ($72M) on Binance, Coinbase and Bitfinex in the past 3 days, and currently holds 127,634 ETH ($372M). Golem raised 820,000 ETH through ICO in November 2016, when the price of ETH was only $10.2.”
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The Golem ICO was an early and significant event for the crypto industry which 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.
In its ICO, Golem raised approximately 820,000 ETH, which was valued at around $8 million at the time, in just 29 minutes, becoming a symbol of the ICO bubble. This funding was supposed to be used to develop the Golem network. Despite its ambitious goals, Golem’s market relevance has significantly diminished, with its token now trading at just $0.32 (#151 by market cap), a stark decline from its peak price of $1.32 in January 2018.
Harsh Criticism From Crypto Experts
Criticism has been vocal among industry leaders. Adam Cochran, a partner at CEHV, expressed his displeasure via X: “Absolute bastards. Sat on their ETH for ages doing nothing. And here we are in the era of demand for distributed compute and they can’t even be relevant.”
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Similarly, Jimmy Ragosa, an advisor at Sismo, sarcastically remarked, “Yes, Golem has been dumping on us. But, at least, they are using these 100s of millions of dollars to build critical scaling infra and widely adopted apps, right?”
Another perspective came from @based16z on X, who speculated on the rationale behind Golem’s actions, “Say what you want about Golem, but they’re not exactly a gambler. For them to dump 700 million dollars in ETH after 7 years, I assume they know something.”
How strong the influence of Golem sales is on the ETH price remains pure speculation. However, it seems clear that the constant selling pressure has probably played at least a certain role in the Ethereum price slump. At press time, ETH traded at $3,049.
Featured image from Shutterstock, chart from TradingView.com