Ethereum Foundation Sells ETH Directly to BitMine: "Decentralization Sold Out"

The Ethereum Foundation directly sold 5,000 ETH via OTC to BitMine, which controls 4% of total supply. Critics slam the foundation for providing liquidity to a company accelerating centralization while declaring itself a "guardian of decentralization."

Justin·April 24, 2026·4 min read

AI Summary

The Ethereum Foundation sold 5,000 ETH directly OTC to Bitmine, a single entity that already holds 4% of ETH supply. The stated reason was operational funding, but the buyer selection criteria were not disclosed. Bitmine is targeting 5% of supply and the Foundation has become its supplier — a direct contradiction of its 'decentralization guardian' declarations. Institutional concentration already exceeds 10% of supply, and this OTC sale is accelerating the structural trend.

The Ethereum Foundation sold 5,000 ETH over-the-counter to a single company that hoards 4% of total supply. A governance declaration published around the same time states that "decentralization and open source are core values." Words and actions have collided head-on.

On the day of the declaration, the foundation provided liquidity to centralization

The Ethereum Foundation sold 5,000 ETH to BitMine Immersion Technologies via over-the-counter (OTC) trading on March 14. At an average price of approximately $2,042, the total transaction value was about $10.21 million (approximately 15.3 billion won). The foundation explained it as "securing regular operating expenses according to the treasury policy established in June 2025."

On the surface, this appears to be normal treasury management. However, the story changes completely when examining who the counterparty is.

BitMine monopolizes 4% of Ethereum's supply

BitMine currently holds approximately 4.73 million ETH, making it the world's largest ETH treasury company. This represents about 3.92% of Ethereum's total circulating supply. The company's goal is to secure 5% of the supply. It continues its strategy of raising funds through public offerings and private investment in public equity (PIPE) to accumulate ETH.

Ethereum is a proof-of-stake (PoS) network. Token holdings directly translate to validator operation capability and influence over network consensus. ETH concentration among a few institutions isn't simply an investment issue—it's a matter of protocol security and decentralization. The 5% figure isn't a symbolic milestone but approaches a practical threshold in terms of network influence.

The question of who the foundation sells to isn't about managing market impact—it's about how we view Ethereum's future structure.
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Operating expenses are necessary—the issue is 'who to sell to'

The foundation's financial constraints are understandable. Annual operating budget is approximately $100 million, with revenue sources essentially limited to ETH sales and staking rewards. After this sale, the foundation's holdings decreased to approximately 200,000 ETH (about $400 million)—roughly 4-5 years of operating expenses.

The foundation is also pursuing a parallel strategy of staking 70,000 ETH separately to generate yield, but it will take time before staking rewards alone can cover operating expenses. OTC sales serve as a bridge to fill this gap. It's also true that OTC methods create less market impact compared to exchange sales.

However, neither the counterparty selection criteria nor the negotiation process has been disclosed. The community has criticized the foundation's opaque selling practices since 2024. This transaction continues that pattern.

The rift between declaration and action

The foundation's new governance declaration explicitly states that "decentralization and open source are core values." Almost simultaneously with this declaration's release, they directly transferred ETH to a single company aggressively expanding its network dominance. This contradiction is difficult to defend.

Looking at Ethereum's institutional holdings makes the situation clearer. Institutional holdings, including ETFs, already exceed 10% of total supply. ETH treasury companies like BitMine alone have surpassed 5% of supply. The foundation's sales are directly accelerating this concentration.

The foundation, which should design and protect decentralization, is providing liquidity to trends that deepen centralization. This is why this transaction isn't simply a financial matter. The question of who the foundation sells to isn't about managing market impact—it's about how we view Ethereum's future structure. That answer is clearly revealed in this very transaction.