Bitmine Buys 10,000 ETH from the Ethereum Foundation

• Tom Lee’s Bitmine Immersion Technologies has acquired 10,000 ETH, worth just over $23 million, from the Ethereum Foundation.
• It was the second time the Foundation had sold to Bitmine in two weeks, triggering concerns over its spending from the Ethereum community.

Bitmine Immersion Technologies, the Ether treasury company founded by Wall Street titan Tom Lee, has purchased 10,000 ETH from the Ethereum Foundation.

The Foundation announced the sale on Friday, revealing it had sold the stash at an average price of $2,292 in an over-the-counter transaction. 

The proceeds will be channeled towards funding the Foundation’s operations and activities, which include developing the ecosystem, research and development and community grants. 

The Foundation added that the sale aligns with its treasury policy, which it published mid-last year. The policy revealed that the organization would determine how much ETH to sell by multiplying an annual opex (set at 15% of the treasury holdings) by a ‘years of opex buffer’ that’s set at 2.5 years. It also outlines a pledge to be transparent with the sales and spending, which the Foundation has honored with the latest announcement.

However, despite the transparency, some community members are raising concerns over the sales. The latest, which raised $23 million, came just a week after a similar sale of 10,000 ETH had raised a similar amount. 

Some have questioned why the burn rate has accelerated enough to require $46 million in such a short time. 

The Foundation has previously revealed that it sells to finance its operations and to compensate its team. However, this has also been questioned, with dozens of community members wondering why developers who work for the organization meant to push Ethereum adoption don’t accept payments in ETH.

Others have drawn comparisons between the Foundation selling to Bitmine and Satoshi Nakamoto selling his Bitcoin to market participants like MicroStrategy, which has become the largest public BTC holder. 

Bitmine Accelerates Ethereum Accumulation

While the Foundation faces public criticism for its sales, Bitmine is stepping up its ETH accumulation. The company is now the runaway leader in ETH holdings with over 5.07 million tokens, valued at $11.68 billion at press time. Notably, this is much higher than the company’s market cap of $7.6 billion. At a distant second is SharpLink, which holds 868,000 ETH, worth $2 billion.

Unlike Bitcoin treasury companies, which only profit from price rises, Bitmine earns yield from its ETH. On Friday, the company staked $500 million worth of ETH, bringing its total staked Ether to 4 million tokens, which accounts for over 10% of all staked Ethereum. Overall, the company holds 4% of the total ETH supply.

Meanwhile, Ethereum has shot up 13% in the past month, adding $34 billion to its market cap, which now stands at $278 billion. At press time, ETH traded at $2,304, gaining around 1% in the past day as trading volume recorded a 5% uptick.

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