Despite holding its second place position by market cap, Ethereum’s price point has witnessed incredible highs and extreme lows during the past year. It’s always partly felt that these volatile changes result from ICOs selling off their copious amount of ETH to gather extra funds. However, new research from Bitmex Research and Tokenanalyst states otherwise.
Finding The Culprit
The study checked out 222 ICO projects, who have together raised $5.5 billion property value Ether. Interestingly, such groups have then gone by means of sell nearly that same amount, meaning ICO selloffs are unlikely that they are the cause of Ethereum’s recent dip.
However, the analysis finds that “the figures are somewhat skewed with the EOS project, which remarkably raised around 70% of one’s Ethereum of all the projects on our list, if our estimates are correct.” Regardless, even without the EOS case, the idea remains the same.
In coming over to this conclusion, they analyzed the amount of ETH raised by 222 ICOs and totaled it before aggregating the amount of that ETH was sold or transferred . This means that around 3.85 million ETH is still being held by these projects. EOS are usually ignored, the way it has gotten got rid of all of its ETH.
“Despite the 85% loss of the Ethereum price in the peak, the projects have realised gains of US$727 million thanks to profits from Ethereum they have already sold, often selling just before the recent price crash,” reads the report. “The 3.8m Ethereum still in the balance sheets of these kinds of projects may possibly that much of an impact on the Ethereum price, because represents a reasonably small proportion in the 102 million source of Ethereum. At the same time, for a macro level, the projects can be feeling reasonably confident instead of needing to panic sell.”
Also, the report states that some ICOs can be sitting on profits of $93 million based on Ethereum’s current price, while other people are probably sitting at a loss. The unrealized losses however projects total $311 million worth, nonetheless the unrealized profits reach $403 million.
Calculating The Total
Over days gone by 26 months, the collective ICO treasuries reached an optimum of 5.2million ETH, noticeably not up to the 15.Two million raised. This may mean that some ETH was reused moms and dads projects after on the market.
In detailing EOS’ statistics, the researchers had to study 171 “internal transactions” which transferred ETH outside the network. These trades made up 7.2 million ETH . However, they aren’t entirely positive that the 7.Two million wasn’t double counted. They need reason to assume the analysis is legitimate, but they simply cannot be as sure because they’re with the other projects.
Simply put, these studies finds that ICO projects would not have nearly as much effect on Ethereum’s price as previously thought. Actually, the reports find that “the ICOs have clearly been an incredible success, to this extent that even just a further significant fall with the value of Ethereum will barely produce a dent in to the success.”
However, you can’t really say what these bits of information mean for the future of Ethereum.