- On May 8, BlackRock and Fidelity reportedly transferred large amounts of Ethereum tokens onto Coinbase Prime in order to sell them.
- The move comes a day after significant outflows into Spot ETH ETFs following a long streak, showing that institutional interest is slowly fading.
- Recently, BitMine’s Tom Lee also revealed that the company plans to reduce the speed of ETH accumulation as it approaches the 5% supply mark.
According to on-chain data, popular financial institutions such as BlackRock and Fidelity are selling their Ethereum holdings despite stability in the overall cryptocurrency market, raising questions about their motives.
According to Lookonchain, BlackRock reportedly deposited 11,475 Ethereum (Ether), worth $26.27 million, on Coinbase Prime about 3 hours ago. On the same day, Fidelity also transferred 23,919 Ethereum, worth about $54.44 million, to Coinbase Prime just a few minutes ago.
Why are BlackRock and Fidelity selling Ethereum?
This dumping Ethereum The tokens are raising questions about their intent as they are coming while the cryptocurrency market is giving positive signals with an impressive performance in the past few days.
These cross-chain transactions come after US Ethereum ETFs recorded significant outflows of around $104 million on May 7. In this large outflow, Fidelity’s Ethereum Fund (FETH) saw a withdrawal of about $62 million. On the other hand, BlackRock’s iShares Ethereum Trust (ETHA) saw an outflow of about $26 million. A similar trend of outflows was also seen in other funds. This has created a reversal pattern after getting steady flows in the last few days.
The pattern of depositing Ethereum tokens on Coinbase Prime by major ETF issuers such as BlackRock and Fidelity is part of their regular operations, acting as their main custodian for US investors to balance investor fund outflows. These types of transactions help them maintain the health of their portfolio, along with liquidity.
BitMine reduces the speed of Ethereum accumulation
While BlackRock and Fidelity are selling off their ETH holdings, BitMine, Ethereum’s largest public holding company, is rapidly growing its Ethereum treasury by purchasing ETH on a weekly basis. However, Tom Lee recently revealed that the company may be reducing the speed of accumulation as it is now close to amassing 5% of the total Ethereum supply.
“At the current buying rate of 100,000 ETH per week, we will get there (5%) in about six weeks,” Lee said during the keynote presentation. “I think we’re deciding that maybe we want to build up at a somewhat slower pace.”
While the overall cryptocurrency market is full of positive sentiment, large inflows into ETH ETFs and rising geopolitical tensions following the new conflict between Iran and the United States have raised concerns about a possible decline in the price of ETH.
according to CoinMarketCapEthereum is currently trading at around $2,282.93 with an impressive market cap of around $275.66 billion.
The cryptocurrency is expected to face resistance around $2,300. On the other hand, it has a strong support zone at around $2,200 to $2,250. According to the current price chart, the short term price chart is giving a neutral to bearish signal. The reason behind this is that most moving averages give sell signals.
The quantum threat is sparking panic among Ethereum investors
In the long run, there is Quantitative threat It looms large around blockchains such as Bitcoin, Ethereum, and others. With this in mind, Ethereum developers are actively working on ways to counter these quantum computing threats; This threat is still perceived by users as the quantum threat is rapidly approaching with each passing day, following the amazing growth in the AI sector.
According to the latest report, the quantum threat is expected to arrive by 2030 a report “This progress profile means that the progress of quantum computing may follow an exponential path of ‘nothing and then everything at once’ not unlike other emerging technologies such as artificial intelligence. Our analysis suggests that, based on current trends, Q-Day is likely to occur by 2033, and perhaps even in 2030.”
“This timeline is a result of the fact that small improvements in error-correction efficiency, higher qubit connectivity, or better code design create potential feedback loops that lead to significant reductions in resources needed for cryptanalysis. What looks like incremental progress in hardware today may quickly converge to CRQC with little warning. Waiting until this point is on the horizon risks insufficient time to select, test, and deploy post-quantum cryptography,” the report read.
Last month, Ethereum co-founder Vitalik Buterin revealed a detailed plan to take countermeasures against quantum threats. In this plan, it is stated that Ethereum should incorporate quantum-resistant cryptographic methods. This includes methods such as Winternitz signatures and zero-knowledge proof technology.
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