Ethereum News Today: Ethereum's Treasury Dilemma: Centralized Sales for Stability or a Sign of Distrust?

The Ethereum Foundation has executed a strategic shift in its treasury management, selling 1,000 ETH ($4.5 million) on October 3, 2025, to convert into stablecoins, with the proceeds allocated to fund research, development, grants, and charitable initiatives. This transaction, executed via CoWSwap's decentralized exchange (DEX) Time-Weighted Average Price (TWAP) feature, aimed to minimize market volatility by spreading the sale over time. The move follows a larger September 2025 sale of 10,000 ETH ($43 million), also conducted through centralized exchanges in smaller increments to avoid liquidity shocks. These actions reflect the Foundation's updated treasury policy, announced in June 2025, which prioritizes maintaining a multi-year financial buffer while capping annual operational spending at 15% of reserves.

The Foundation's approach has drawn mixed reactions from the crypto community. Critics, including DeFi advocates like Gnosis co-founder Martin Koppelmann, questioned the reliance on centralized exchanges for large sales, suggesting alternatives such as decentralized lending platforms or over-the-counter (OTC) deals. Others, like crypto researcher Josiah Gulden, argued that selling ETH rather than borrowing against it might signal a lack of confidence in the asset's long-term value. However, the Foundation defended its method, emphasizing the practical benefits of centralized exchanges-such as better liquidity and reduced slippage-for large-scale transactions.

The October 3 sale occurred amid Ethereum's price nearing an all-time high of $4,600, with the Foundation leveraging CoWSwap's TWAP to execute the trade without triggering significant price fluctuations. Historical data suggests that smaller ETH sales (under 9,000 ETH) have had minimal negative impact on price, with ETH often seeing gains in the days following such events. The Foundation's remaining ETH holdings stand at approximately 222,720 ETH ($1 billion), with plans to continue periodic sales under its treasury policy.

Institutional activity in the Ethereum ecosystem has also intensified, with entities like Yunfeng Financial Group (China Hong Kong) purchasing 10,000 ETH and Ether Machine acquiring 150,000 ETH to build corporate treasuries. These moves, combined with the Foundation's sales, highlight growing institutional interest in Ethereum, particularly as Wall Street adoption gains momentum. Ethereum co-founder Joseph Lubin has speculated that ETH could surpass Bitcoin as a "monetary base" as traditional finance embraces crypto.

The Foundation's strategy underscores a broader shift toward professionalized treasury management in the crypto space. By diversifying into stablecoins and adopting DeFi tools, the Ethereum Foundation aims to ensure operational stability while supporting long-term ecosystem growth. This approach aligns with its goal of reducing annual spending to 5% of reserves by 2030 and establishing a 2.5-year operating buffer. For investors, the key takeaway is the Foundation's commitment to transparency and liquidity management, which mitigates risks associated with large-scale asset disposals.