Ether Meltdown by ICOs – Is It A Matter of Fact-Free Reporting
According to a number of news outlets, ICO developers and teams have been responsible for the dumping of a large volume of ETH, totaling roughly 100,000 ETH, which equals to an amount worth $40 million. This has all been within the past month, but is it essentially true? And, if it is, in fact, true, is it significant?
Research Conducted By Santiment Fails To Illustrate Alleged Liquidation
According to the news circulating, the resultant dumping of ETH was due to the fact that developers within Ethereum-based ICOs feared its fall in value, culminating in a large-scale sell-off. As a result, the sell-off has paired up with the recent downward trend, pushing the crypto below its previously strong lower foundation, hitting below $304, with more decreases expected to take place.
What must be noted is that the reports circulated around the research conducted by Santiment, a research company that tracks trends and data coming out of the cryptocurrency market. According to the company's badly grammatically executed mission statement, it intends to teach machines…
“… how to evaluate sentiment, to see if it's [sic] possible to spot tops or bottoms. But we’re also building social features for people to share insights, because its [sic] not just data that’s important but the community around it.”
According to Santiment and its resultant research, it identifies one-off trades by a number of individuals and companies.
For example, Atonomi was responsible for the sell-off of 3 ETH on July 19th and a further 9 ETH on July 26th.
Appcoins was also responsible for the sell-off of 8 ETH on August 9th:
ETHRoll also sold off approximately 5 ETH on August 3rd.
According to the reporters, more than 5 ETH was liquidated on August 9th by OpenLedger. There are immediately a few knocks to the credibility of the research, however, especially when, upon closer examination, the graphs used were a forgery, or graph relating back to a different project.
One other issue is that Sanitment doesn't keep an active track on OpenLedger; when trying to explore assets related to OpenLedger, users are confronted with a ‘no data found' screen, this includes when users search for anything related to OpenLedger via the Sanitment site.
The graph used to demonstrate OpenLedger’s trading history mysteriously lacks the organization’s name at the top left of the screen.
If There Were Any Dumping Of ETH, How Else Are Projects Supposed To Get And Use Funding Exactly?
While the panic-mongering of these reports can sometimes signal serious dangers to people's funds, the selling off of large volumes of ETH isn't exactly ‘breaking' news, especially for ICOs.
The intention of an Initial Coin Offering is to accrue enough (ETH, in this case) tokens in order to satisfy the developers soft/hard cap, allowing them to withdraw and spend them with the intention of creating their product.
With this in mind, it's completely understandable why there would be a liquidation of ETH within such a small window of time with the intention of putting it to use.
ETHRoll has since fired back at the reporting and research, rightfully so, especially when considering that its trading activity between October 2017 and March 2018 was far higher than recently, with little to no influence on the market.
“The paragraph regarding Etheroll selling 5,400 eth is incorrect. We were simply migrating funds to an updated smart-contract.”
The Ran-Neur Factor
The self-professed host of a CNBC Africa-based show called ‘Crypto Trader' took to Twitter in order to message out some insider information, regarding an Ether dump by an, as yet unknown ICO team on August 7th.
Spent the morning with an ICO (not to be named) they raised $30m usd with a solid roadmap, they raised when ETH was $1200. They panicked and sold their remaining ETH last night – they have $4m left.
— Ran NeuNer (@cryptomanran) August 8, 2018
The Tweet itself raised a number of responses from the community, both agreeing with the self-proclaimed broadcaster and terse skepticism.
So basically had a good time at investors expense then bailed. No wonder ICOs have a rep for being a scam. Need regulation
— Steve Deery – Cryptocurrency Consulting (@Steve_Deery) August 8, 2018
Meanwhile, fellow user @Tjotunes offered laconic scepticism:
So it’s fake news.. this guy posting is planting stories that look bad
— Tyler Jones (@Tjotunes) August 8, 2018
That anecdotal evidence was referenced in the reporting of the ether-dumping barrage that ICO projects have supposedly been subjecting the market to. While others gave strong opinions, others were attempting, both to probe ‘Ran NeuNer' for the name of the ICO in question, or taking it upon themselves to unmask the alleged perpetrator.
According to https://t.co/eOAl2Y5WhA these ended ICO's received $30,000,000.
– Restart Energy
– Jibrel Network
— dennusd (@dennusd) August 8, 2018
— ShipChain (@ShipChain) August 8, 2018
While any unsubstantiated statistics should be given a wide berth until validated, if Neu-Ner's reporting was, in fact, correct, Santiment lacks any data for the likes of ShipChain and Restart Energy, which would include their Ether sell data. This includes CPChain, which, while having a listing on the company's platform, demonstrates no credible sell-offs that would tie it to Neu-Ner's statements.
Another important factor to take into consideration is that Ran Neu-Ner’s show on CNBC isn't exactly all that it's glossed up to be. Rather than serving as a subsidiary station to the larger CNBC brand, the programme is funded and run by Ran Neu-Ner himself while receiving no remuneration from CNBC for hosting it.
What this means is that there's a motive for him to be provocative in this way, while also meaning that he's one of the first show hosts to not only work for free, but pay to do so.
A follower @Z_MoDi_Z also found another problem in his tweet — namely, the glaring similarities between it and another tweet:
— CryptoBro (@Z_MoDi_Z) August 8, 2018
Where Has All The Good Reporting Gone?
Even the title that some of the news reports bring to publish, like ‘ICO Ether Liquidation' do nothing but create an unnecessary hysteria and panic to a market that is fighting to be taken seriously by the already established names.
It also bears all of the hallmarks of hysteria coupled with nonexistent evidence, doing nothing but damaging the field of crypto journalism.
The cryptocurrency world, as a whole, deserves better than joyride journalism that merely seeks to generate panic instead of presenting factual stories.