Impact of Ethereum Foundation Sales on ETH Price

According to a detailed CoinGecko report, sales of Ethereum by the Ethereum Foundation (EF) do not have as big an effect on the token’s price as is generally believed.

“Does Ethereum Foundation’s (EF) sell-offs trigger any significant market movements?” CoinGecko asked in a tweet, revealing its study that proves Ethereum Foundation sell-offs of less than 9K ETH have no significant positive correlation with price changes.

The same cannot be said for sales larger than 15K ETH. For instance, one instance where the foundation sold 70K ETH resulted in a 20.6% dip, while a sale of 16.3K ETH saw a 36.5% rise.

For the research, CoinGecko analyzed EF sell-offs from October 16, 2017, to January 15, 2025, using publicly available on-chain data from Dune, Etherscan, and CoinGecko. Only ETH transactions above 100 ETH were considered, and the analysis does not factor in market trends or macroeconomic events.

CoinGecko’s Findings on EF Sales and ETH Price Action

According to the report, ETH’s average 7-day price change following an EF sell-off is +1.3%. While the report does not disprove that large EF sell-offs trigger immediate market reactions, it argues that these moves aren’t uniformly negative.

The percentage of cases that saw ETH’s price decline within 7 days of an EF sell-off is -47.6%, suggesting that less than half of EF sell-offs result in an immediate price decline. In most cases, EF’s sales activities do not cause significant drops in Ethereum’s price.

The largest single-week drop on record after an EF sale was -41.1%. Some sell-offs lead to pronounced short-term reactions; for example, a sale on May 17, 2021, resulted in a price plummet of -41.1% within a week. However, such declines are not universal; in fact, ETH’s price saw a rise in 164 cases of EF sales and declined in 149 cases.

The mixed outcome indicates that EF spending does not consistently lead to negative ETH trends. Over the 30-day range, the average ETH price change post-Ethereum Foundation sell-off is +8.9%.

Variations in Impact Across Different Timeframes

To further explore the relationship between EF’s spending and ETH price action, CoinGecko analyzed rolling correlations over three timeframes: 3-day, 7-day, and 30-day.

The data revealed that the 3-day rolling correlation fluctuates widely, highlighting extreme volatility and indicating that short-term price movements may not be significantly influenced by EF’s spending but rather by broader market conditions. One notable example occurred on Nov 19, 2020, when the EF sold 16,390 ETH; ETH’s price rose from $479 to $560 in four days.

However, there have also been instances of price drops following EF sales. Both scenarios affirm that short-term correlations are highly susceptible to market sentiment and liquidity.

Unlike the 3-day correlation, the 7-day rolling correlation exhibited less volatility, ranging generally between -0.7 and +0.7. This showed a more stable yet inconsistent relationship between EF spending and ETH price over a weekly timeframe. The 30-day rolling correlation provided insights into broader market trends, indicating positive correlations during early ecosystem growth phases from 2018-2020.

However, since 2021, the correlation has trended toward neutral or negative values, indicating Ethereum’s market maturation and the influence of larger macroeconomic forces.

Regarding sales distribution, there is no significant positive correlation between ETH price changes and sales of less than 9K ETH, but larger sales correlate more strongly in most cases. The analysis revealed the 30-day rolling correlation between EF spending and ETH price is mostly between -0.3 and 0.5, indicating a weak to moderate relationship.

Overall, these findings confirm that even though Ethereum Foundation sell-offs often affect price movements in the short-term, longer-term correlations are weak and inconsistent.