The year 2025 has not started smoothly for Ethereum, as tensions rise within its core development community. Reports of repeated large-scale transfers and sales of ETH by the Ethereum Foundation (EF) have sparked growing criticism from supporters, developers, and market observers. While the foundation claims these moves are part of routine financial management, the timing and execution have raised concerns about transparency, long-term vision, and alignment with the broader ecosystem.
Ethereum’s Market Position in Early 2025
At the time of writing, Ethereum is trading between $3,200 and $3,384—significantly below its all-time high of $4,878 reached in 2021. In contrast, Bitcoin has surged past $109,000, reclaiming momentum and investor confidence. This divergence has intensified scrutiny on Ethereum’s ecosystem health and institutional stewardship.
Despite ongoing innovation in Layer 2 scaling, decentralized finance (DeFi), and real-world asset tokenization, Ethereum’s price performance has lagged. Against this backdrop, the Ethereum Foundation’s recent token activity has drawn sharp reactions.
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What Did the Ethereum Foundation Do?
According to on-chain analytics platform Spot On Chain, the Ethereum Foundation transferred and sold a total of 200 ETH in early January 2025—at an average price of $3,361—generating approximately $672,000. A follow-up transaction involved the sale of another 100 ETH for 336,475 DAI, a stablecoin pegged to the U.S. dollar.
These transactions were conducted through decentralized exchanges like CoW Swap, emphasizing the foundation's continued use of native Ethereum infrastructure for operations. However, executing multiple sales during a period of market stagnation has been perceived by many as bearish signaling.
"Ethereum Foundation just sold another 100 $ETH for 336,475 $DAI!
They’ve now sold 200 $ETH in 2025 for $672K at an average price of $3,361 over the past 12 days."
— @spotonchain, January 20, 2025
While financially modest relative to larger crypto treasuries, the symbolic impact is significant. Critics argue that such actions undermine trust, especially when retail holders face prolonged bear pressure.
Community Reaction: From Skepticism to Outrage
The backlash intensified after Josh Stark, a prominent Ethereum advocate and EF contributor, publicly defended the sales. In a now-viral tweet thread, Stark clarified:
"EF continues to actively use Ethereum—for example (1) swapping ETH into stablecoins (often @CoWSwap) and (2) paying people in stablecoins or ETH on mainnet and L2s (grantees, team members). Our events (like Devcon and Devconnect) use on-chain payments and on-chain ID for ticketing."
Stark emphasized that these transactions support operational expenses: payroll, grants, event funding, and ecosystem development—all paid via blockchain-native tools.
However, many in the community were unimpressed.
Crypto analyst WazzCrypto criticized the justification as a weak cover for what appeared to be dumping. Another user, @VelvetMilkman, expressed disappointment:
“Using ‘we’re still using ETH’ as a defense for selling it? That’s a terrible excuse.”
Even harsher was the reaction from @Trading_Axe:
“Their brains actually don’t work.
How desperate are you for $300K?
As the Ethereum Foundation, what do you need a public sell order for 300K for while the whole world watches?
Brain-dead cockroaches.”
Such sentiments reflect deeper frustrations about governance transparency and strategic foresight within one of crypto’s most influential organizations.
Why Doesn’t the Foundation Just Stake Its ETH?
A recurring question from critics: Why sell ETH instead of staking it to generate yield?
Vitalik Buterin addressed this directly, acknowledging that staking was considered. However, he cited two major barriers:
- Regulatory uncertainty: Staking could potentially classify ETH as a security under certain jurisdictions, increasing compliance risks.
- Technical complexity: Large-scale staking requires robust infrastructure and carries risks related to slashing penalties or network upgrades (e.g., hard forks).
Buterin noted that while regulatory conditions have improved slightly in some regions, the risk-reward balance still leans toward caution. That said, internal discussions continue on safer staking mechanisms via trusted validators and multi-client setups.
This hesitation highlights a growing tension: balancing financial prudence with ecosystem leadership. As newer blockchains like Solana push aggressive treasury strategies—including yield-generating staking and venture-style investments—Ethereum’s conservative approach may be seen as outdated or overly cautious.
FAQ: Addressing Key Concerns
Q: Is the Ethereum Foundation selling ETH illegally?
A: No. The foundation holds legitimate reserves and has full rights to manage its treasury. There is no legal prohibition against selling ETH for operational needs.
Q: How much ETH does the Ethereum Foundation actually hold?
A: Exact figures are not publicly disclosed, but estimates suggest tens of thousands of ETH remain in cold storage. The recent sales represent a tiny fraction of total holdings.
Q: Could these sales affect Ethereum’s price?
A: Directly? Unlikely due to small volume. Indirectly? Possibly—negative sentiment can erode confidence and influence market psychology during weak trends.
Q: Has the Ethereum Foundation sold ETH before?
A: Yes. Periodic sales have occurred since 2015 to fund operations. However, past transactions were less visible due to limited on-chain monitoring tools.
Q: Shouldn’t the foundation hold longer-term?
A: Many believe so. Critics argue that selling during downturns contradicts long-term faith in the protocol. Holding or strategically staking could signal stronger conviction.
Q: Are there alternatives to selling ETH?
A: Yes—options include:
- Earning yield via non-custodial lending or structured products
- Accepting donations in stablecoins or other assets
- Launching revenue-generating services (e.g., data indexing, developer tooling)
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Final Thoughts: Leadership in a Decentralized World
The controversy surrounding the Ethereum Foundation’s ETH sales isn’t just about money—it’s about perception, trust, and leadership in a decentralized ecosystem. While financially rational, selling native tokens during market lulls can appear shortsighted or misaligned with community goals.
As Ethereum evolves into a mature platform powering global finance, identity, and digital ownership, its stewardship bodies must act with greater transparency and strategic foresight. Every transaction is now visible, analyzed, and judged in real time.
Moving forward, the foundation may benefit from clearer communication around treasury policy—perhaps publishing quarterly reports or engaging community feedback before major movements. Additionally, exploring innovative revenue models beyond direct sales could strengthen long-term sustainability.
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Ultimately, Ethereum’s success depends not only on technology but also on trust. And trust begins with actions that reflect belief in the very system they helped build.