China is preparing to sell approximately $1.3 billion worth of Ethereum (ETH) seized from the PlusToken Ponzi scheme. This decision comes after the transfer of 7,000 ETH from a total of 542,000 ETH, marking the first movement of these assets since 2021. The transaction indicates that Chinese authorities are initiating the sale, which could create significant selling pressure on the Ethereum market.
Implications for Ethereum’s Market
- Potential Price Drop: Analysts predict that if the Chinese government proceeds with the sell-off, it could lead to a substantial decrease in ETH prices, possibly dropping below $2,400. Historical data suggests that similar sell-offs have led to significant price declines; for instance, a prior sale by the Ethereum Foundation resulted in a 4.8% drop in ETH’s value.
- Market Reactions: The current trading price of ETH is around $2,403.45, which is down over 50% from its all-time high of $4,891 in 2021. Increased trading volumes and market sentiment are critical factors influencing potential price movements as investors react to this news.
27 PlusToken Key Members Arrested
While earlier reports indicated that some PlusToken officials had been apprehended months ago, today’s update confirms that 27 core members of the fraudulent scheme have been arrested, marking the end of the saga.
Chinese authorities had been investigating the project since its closure last year. The search for the perpetrators spanned 12 months, as the key members were spread across various countries. According to the report, a special task force coordinated with law enforcement agencies in nations such as Cambodia, Vietnam, Malaysia, and others to capture the 27 suspects
Broader Market Impact
The impending sale may not only affect Ethereum but also other cryptocurrencies closely correlated with it, such as Cardano (ADA). With a correlation coefficient of 0.8, ADA’s price could also experience volatility in response to ETH’s fluctuations. Predictions suggest that if ETH drops significantly due to the sell-off, ADA could fall by as much as 30%
In summary, China’s planned sale of seized Ethereum from the PlusToken scheme poses risks for the crypto market, particularly for ETH and its correlated assets. Investors are advised to monitor these developments closely as they could lead to significant market shifts shortly
