ICOs have nearly tripled the amount of eth sold a day during the past 24 hours according to data from Santiment, with ◊13,500 entering the market while usually it was about ◊5,000 and as low as ◊1,000 recently.
The biggest sale was by a project called PolicyPal, with ◊6,400 ($1.5 million) seemingly liquidated in the past 24 hours. They’re followed by Electrify Asia, another project no one has heard of, with ox further spending ◊1,500 ($350,000).
Some 50,000 eth has made its way to the market in the past seven days without including Digix Global’s ◊70,000.
That’s because spent or sold here means the movement of coins from one address known to belong to an ICO, to another address.
That assumption might not always hold true as clearly shown by Digix. They moved close to half a million coins, and did so twice, with Santiment data so counting it as one million eth spent. However, only ◊70,000 was spent, while the rest was sent to a new address.
We have therefore discarded the Digix data, so you can add ◊70,000 to it, with the data moreover likely not being fully correct in assuming it is spent eth, but about 70% of eth movements by ICOs is for the purpose of selling them.
Thus Etheroll apparently spent about 5,000 in the past seven days. Previously they have stated their eth movements were internal organizing of wallets, but that was a month ago. After the article was published they clarified it was casino payouts.
Sirin Labs has seemingly sold 10,000 eth in the past month. Their founder, Moshe Hogeg, has been buying land and football teams recently. He has previously founded a number of companies with exits in the $100 million plus, but the timing of the splash does seemingly coincide with the recent closure of the token sale.
Status has also been selling, ◊3,000 in the past week, while Cobinhood, a crypto exchange, has moved circa ◊30,000 in the past month, with ◊193,000 in total moved by ICOs during the past 30 days.
How much they now still hold in combination is unclear as from the data above it looks like they haven’t accounted for the sales if we go by Digix which is shown as still having ◊466,000 when it is about ◊395,000 after ◊70,000 was marked for liquidation.
Yet they have been selling daily, ranging from a high of nearly ◊20,000 on the 14th of August to a low of just above ◊1,000.
It does look like recently the selling has slowed down with about ◊3,000 to ◊5,000 a day, but yesterday it appears to have picked up.
This sell pressure is just one of three prominent sell pressures for eth.
The miners’ daily reward of about ◊20,000 is one. ICOs is another. With a third being early eth buyers who could have afforded more at a far lower price.
That thus means some higher concentration of ownership in early adopters, so concentrating sell-pressure too when some early adopters decide to cash out.
Yet the trend, naturally, has been a distribution of ownership as eth keeps changing hands during bull and bear markets.
These three factors have been singled out because one can argue that, especially in the case of miners and ICOs, they have to liquidate to keep operating until miners are replaced by stakers and ICO-ed projects become profitable.
In the case of early adopters such requirement to sell is not necessarily there, but as ownership can be more concentrated they might have sharper price pressure.
The other part of the equation is of course demand, and demand depends on another supply factor: capacity.
Currently, demand can go only up to 1.4 million transactions a day, meaning that current use cases, which drive demand, are somewhat limited.
The focus therefore is on sharding as well as second layer compressions which can extend current capacity, but sharding is at least a year if not two away, while the adoption of second layers isn’t goin very well in bitcoin.
That means the current biggest use case is global value transfer, and there both bitcoin and eth are doing fairly well, processing this year a trillion dollars worth and half a trillion correspondingly.
In addition, a lot of business aspects, user experience, alpha projects and so on have to be refined much further before they can really care about capacity, with many projects further needing to be built to begin with.
Which means this may be part of a cycle as seen previously whereby the infrastructure is built, with all then eventually seeing it and wanting to use it. Hopefully this time they won’t then hit a limit when they do start playing once it all becomes ready.
Updated to include Etheroll clarification.