The Ethereum Foundation (EF) is in the corner where the blows fall. The ongoing fall in Ethereum (ETH) has put considerable pressure on the financial position of the foundation. With a treasury that consists of ethers for the most part, the dependence on the race is enormous. A long -term bear market can therefore have serious consequences for the future of Ethereum.
Financial pressure is increasing
On October 31, 2024, the value of the EF-Treasury was $ 970.2 million, a significant decrease compared to the $ 1.6 billion in March 2022. The combination of a falling Ethereum course and annual expenses of around $ 120 million ensures that the greenhouse is shrinking faster and faster.
More than 81% of the Treasury consists of cryptocurrencies, with ETH as an absolute protagonist. This shows that the foundation has confidence in its own network, but at the same time it makes the financial situation vulnerable in turbulent market conditions.
To cover the current costs, the EF has recently sold ETH several times. In December 2024, 100 ETH was converted into 374,334 DAI, which brought the total of ETH sold to 4,266 in that year. These sales together yielded $ 12.21 million, with an average selling price of $ 2,796 per ETH.
These types of transactions show that the foundation actively tries to manage its financial position, but if the price continues to fall, it will have to sell larger quantities at less favorable prices. That could cause a negative spiral.
Defi experiments endanger Ethereum Foundation
An extra care point is the recent involvement of the EF in Defi platforms. In January 2025, 50,000 ETH, then good for $ 165.3 million, deposited in Aave, a decentralized loan protocol. These types of constructions can result in extra returns, but also entail serious risks.
If the price of ETH falls too far, this can lead to automatic liquidations, whereby the assets of the EF are thrown on the market. This would not only put the Schaden Foundation, but also extra sales pressure on ETH itself.
To limit the damage, the Ethereum Foundation has taken a number of steps. For example, part of the ETH Treasury is converted into stablecoins such as DAI to be less dependent on price fluctuations.
The foundation also tries to choose its sales moments strategically to minimize the impact on the market. In addition, extra income is being sought through Defi platforms, although that remains a risky company.
The big question is whether these measures are sufficient to pull the EF through a long -term bear market. If the ETH price keeps sinking, the foundation can be forced to sell more aggressively or to look for external financing. That would not only change the foundation of the foundation in the long term, but also influence its position within the Ethereum network.
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Source: https://newsbit.nl/ethereum-foundation-in-zwaar-weer-door-kelderende-koers/
