Lisk Foundation To Convert 1,000 Bitcoin To ETH
2 min read
Max Kordek, the co-founder and CEO of Lisk recently announced via Twitter that the Lisk Foundation will convert 1,000 Bitcoin (BTC) to Ethereum (ETH) in the next 10 weeks, which will be held as part of the foundation’s long-term treasury. As Kordek explained in a commentary, the Lisk Foundation wants to stake its ETH, “but it won’t happen right away.”
The project gained wider notoriety during the Initial Coin Offering (ICO) craze in 2016 and 2017. At the time, the decentralized apps platform raised 14,000 Bitcoin. That sum was worth about $5.7 million at the time, making the campaign the second most successful cryptocurrency crowdfunding to that point.
With a market cap of $106 million, the Lisk Token (LSK) ranks 195th among the largest cryptocurrencies according to CoinMarketCap today. At press time, LSK was trading at $0.828 and is down 5.7% in the last 24 hours.
Reasons Why Lisk Is Converting Bitcoin To ETH
Lisk Foundation will sell 1,000 BTC in chunks of 100 BTC per week to reduce risks with related third parties. Subsequently, the purchased ETH will be deposited into a 2-of-3 multisig account, with each Lisk Foundation board member holding one key each.
Notably, the project will keep 500 BTC, which the co-founder said will be used to pay expenses in 2024 and 2025. Moreover, Kordek added that the Lisk Foundation has “about enough fiat until the next Bitcoin halving.”
According to Kordek, there are three reasons for this move: first, the tweet states that Ethereum is the largest blockchain platform in the world. “Treasury-wise we want to go where blockchain applications are being built,” Kordek wrote, emphasizing as a second reason that ETH has “acceptable risks” from a Treasury wise point of view.
Third, he said, it allows for a sustainable, long-term return (via staking). “Treasury-wise it makes sense to go into an appreciating, deflationary, yield-generating asset,” Kordek said.
The Lisk Foundation is exchanging 1000 BTC into ETH over the next 10 weeks and will hold onto them as part of its long-term treasury.
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How:
The 1000 BTC are being sold in chunks of 100 BTC per week to reduce risks with associated…
— Max Kordek (@maxkordek) May 11, 2023
Will It Have An Impact On BTC Price?
Even though the Bitcoin and crypto market is very illiquid due to Operation Choke Point 2.0 in the United States at the moment, the impact on the Bitcoin price should be marginal due to the 1,000 BTC split over 10 weeks.
100 BTC is an order size that the market can easily digest. In the last 24 hours, the trading volume of BTC was approximately 19.4 billion.
At press time, the Bitcoin price was at $26,388. For now, the key support is at the 100-day Exponential Moving Average (EMA), located at $26,227. Over the next few hours, it remains to be seen if this support can be held, if not, the area at $25,200 comes into focus.
Featured image from iStock, chart from TradingView.com
