Vitalik's $13M ETH Sale Explained: Why the Ethereum Co-Founder Is Selling — and Why It's Not What You Think

When Ethereum's co-founder sells millions of dollars in ETH during one of the worst crypto crashes in years, it's going to make headlines. Last week, blockchain analytics platforms lit up as Vitalik Buterin moved thousands of ETH out of his wallets in a series of rapid-fire transactions, prompting a wave of panicked posts across Crypto Twitter screaming "Vitalik is dumping!"

The problem? That framing misses almost everything important about what's actually happening.

Buterin sold roughly 6,183 ETH — worth approximately $13.2 million at the time — between February 4 and 6, according to on-chain data tracked by Lookonchain and Arkham Intelligence. The transactions were executed through CoW Protocol in a deliberate series of small swaps, a technique commonly used by large holders to avoid spiking the market. That alone should tell you something: this isn't panicked selling. It's a carefully structured, pre-announced liquidation strategy being executed during a downturn that Buterin had no control over.

Here's the full story.

He Announced This Six Days Before the First Sale

On January 30, 2026 — nearly a week before a single ETH moved — Buterin posted publicly on X laying out exactly what he intended to do and why.

"In these five years, the Ethereum Foundation is entering a period of mild austerity," he wrote. "To this end, my own share of the austerity is that I am personally taking on responsibilities that might in another time have been 'special projects' of the EF."

He stated clearly that he had already withdrawn 16,384 ETH — worth approximately $44.7 million at the time — to be deployed over the coming years toward specific long-term goals. He listed those goals explicitly: open-source software and hardware development, financial applications, operating systems, secure hardware, and biotech research.

This wasn't a surprise exit. It was a public funding announcement. The sales that followed were simply Buterin beginning to execute on a plan he had already disclosed in full.

What Is "Mild Austerity" and Why Does It Matter?

The Ethereum Foundation has historically funded a large portion of core Ethereum research and development — from protocol upgrades to developer grants to public goods infrastructure. As the foundation navigates a more resource-constrained period, some of that work is shifting toward Vitalik personally taking it on.

"My own share of the austerity is that I am personally taking on responsibilities that might in another time have been 'special projects' of the EF," Buterin said in his January 30 post.

In plain terms: he's effectively stepping into a funding role that previously fell to the foundation's budget, using his own ETH holdings. This is a meaningful distinction. It means the work doesn't stop — it simply moves to a different balance sheet.

The EF still holds substantial reserves and continues to fund core development. Buterin's personal sales are supplementary, not a sign that the organization is in financial distress.

Who Is Kanro — and Where Is the Money Going?

The most concrete piece of this story is where a portion of the proceeds ended up: Kanro, a biotech-focused charity Buterin founded in 2023.

Arkham Intelligence data confirms that $500,000 in USDC was transferred to the Kanro wallet as part of the recent activity. Kanro's mission centers on combating infectious diseases and funding research into pandemic prevention — work Buterin has described as a direct response to lessons from COVID-19.

This isn't the first time he's directed crypto proceeds to Kanro. In January 2025, he sold 28 different meme coins worth approximately 984,000 USDC and sent the proceeds to the same charity. Buterin has built a consistent record of using crypto assets — whether ETH, meme coins, or staking rewards — to fund causes he believes in rather than converting them to personal wealth.

The remaining proceeds from the current sales are earmarked for the longer-term goals he laid out in his January 30 post, including open-source research into privacy technology, secure hardware, and what he calls "verifiable computing" — tools that allow people to cryptographically prove facts about themselves without revealing underlying data.

The Mechanics: Why CoW Protocol and Small Swaps?

One detail that largely got lost in the panic coverage: how these transactions were executed.

Rather than dumping a large block of ETH directly onto an exchange — which would have immediately suppressed the price — Buterin routed the sales through CoW Protocol in a series of smaller, spread-out swaps. This approach is specifically designed to minimize market impact.

CoW Protocol (Coincidence of Wants) is a decentralized exchange aggregator that matches orders peer-to-peer where possible, reducing price slippage. Using it for a sale of this size is a deliberate, technically sophisticated choice. It's the method a founder uses when they want to fund a goal without hurting their own project's price. It's not what selling under duress looks like.

By comparison, the actual selling pressure on Ethereum in early February came from elsewhere entirely. According to Lookonchain, Trend Research sold more than 170,000 ETH — nearly 28 times what Buterin sold — in under 10 hours to repay loans. Aave founder Stani Kulechov sold around 4,500 ETH near $1,900. And CryptoQuant data showed U.S. institutional investors pushing the Coinbase Premium Index to its lowest level since July 2022 as they de-risked in the broader market selloff. Those were the forces moving ETH's price. Buterin's careful, small-lot sales were background noise by comparison.

Where Does His Portfolio Stand Now?

To put the numbers in perspective: after all the activity tracked this past week, Buterin's ETH balance dropped from approximately 241,000 ETH to around 227,268 ETH, according to Arkham Intelligence. His total portfolio remains valued at roughly $498–530 million, with ETH making up the vast majority.

He has sold 42% of the 16,384 ETH he earmarked in his January 30 announcement. The remaining ~9,500 ETH from that tranche is still being deployed, meaning further sales are expected — but again, within the scope of a publicly disclosed, long-term plan.

He's also been exploring what he described as "secure decentralized staking options" to put even more of his staking rewards toward the same goals over time, which would reduce the need for outright sales.

Has Vitalik Selling ETH Ever Actually Crashed the Price?

History gives a pretty clear answer: no.

Past instances of Buterin selling ETH — including the high-profile 2021 sale of SHIB he'd received unsolicited from the Shiba Inu team, which was worth roughly $1 billion at the time, and which he donated to COVID relief in India — had little to no lasting impact on Ethereum's price.

The reason is structural. Ethereum's daily trading volume regularly exceeds $10–20 billion. Even $13 million in sales, spread over three days through a DEX aggregator, represents a fraction of a fraction of that volume. The market absorbs it without difficulty.

Buterin's sales during this period have not materially impacted ETH's trajectory. Ethereum's price dropped roughly 30% in the past week and tested levels below $2,000 — but that move was driven by the same macro forces hitting everything: record Bitcoin liquidations totaling $2.56 billion, ETF outflows, elevated Treasury yields, and a global risk-off rotation. ETH was going to trade where it traded regardless of what Vitalik did with 6,000 coins.

What This Actually Tells Us About Ethereum's Direction

Beyond the transaction mechanics, there's a broader signal in Buterin's recent activity worth paying attention to.

The same week he began selling ETH, he published a sharp critique of Ethereum's current relationship with layer-2 networks. His argument was nuanced: Ethereum itself is now scaling directly on layer 1, with large planned increases to its gas limit in 2026 and beyond. Given that, he suggested layer-2 networks need to redefine their purpose — they're no longer primarily scaling Ethereum, and they need to be honest about that.

"Ethereum itself is now scaling directly on layer 1," he wrote on X. "With large planned increases to its gas limit this year and the years ahead."

This is a significant signal for where Ethereum's roadmap is heading in 2026. It suggests a potential shift in emphasis back toward base layer performance improvements, which could have long-term positive implications for ETH's utility and value if execution follows through.

It's also worth noting that Buterin's portfolio composition hasn't changed in a way that suggests he's lost faith in Ethereum. He still holds over 227,000 ETH — more than $490 million worth. If he were genuinely bearish on his own project, the rational move would be to diversify into other assets. He hasn't done that.

The Real ETH Story Right Now: Fundamentals vs. Price

There's a persistent gap in February 2026 between Ethereum's on-chain health and its price performance that deserves more attention than Vitalik's wallet activity.

Despite trading down significantly from its cycle highs, Ethereum's network fundamentals remain strong. DeFi protocols continue processing billions in daily volume. Layer-2 networks, whatever Buterin's philosophical questions about their role, are handling record transaction throughput. Developer activity on the protocol remains among the highest of any smart contract platform.

ETH has also quietly become the preferred institutional blockchain for stablecoins and real-world asset tokenization. Standard Chartered, in a research note published February 3, explicitly called Ethereum its "preferred large-cap digital asset in the near term," citing stablecoin and tokenized RWA growth as the primary institutional thesis. That's a major bank with $22 trillion in assets under management putting Ethereum ahead of Bitcoin in their near-term crypto allocation framework.

The price weakness, then, is a macro and sentiment story — not a fundamental one. The same fear and forced selling that drove Bitcoin's mining difficulty down 11% last week in its largest drop since China's 2021 mining ban is the same force that pushed ETH toward $2,000. It's a broad market event, not an Ethereum-specific crisis. Conditions like these have historically resolved when the capitulation wave passes and accumulation resumes — which is exactly what Glassnode's on-chain data is beginning to signal for Bitcoin across all holder cohorts.

Bottom Line: What Should ETH Holders Take Away?

The Vitalik selling story is real. The panic around it is not.

Here's the factual summary:

What happened: Buterin sold ~6,183 ETH (~$13.2M) between February 4–6, moved 14,000 ETH total in wallet restructuring, sent $500K to Kanro, and has now executed 42% of the 16,384 ETH plan he announced publicly on January 30.

Why he's selling: To fund Ethereum Foundation priorities during a period of institutional belt-tightening, to support Kanro's biotech research, and to personally take on R&D work that would otherwise fall to the Foundation.

How he sold: Through CoW Protocol in small, market-impact-minimizing swaps — the opposite of a panic exit.

What it did to ETH's price: Essentially nothing on its own. ETH's price moves are driven by macro forces, institutional flows, and broader market sentiment, not by a founder carefully liquidating 0.003% of daily trading volume.

What he still holds: ~227,268 ETH, worth approximately $490–530 million. He remains one of Ethereum's largest individual holders by a wide margin.

What comes next: More sales from the remaining ~9,500 ETH in the announced tranche — but again, on a planned timeline and at small daily volumes.

For long-term ETH holders, the more relevant question isn't what Vitalik is selling. It's whether Ethereum's institutional adoption thesis holds, whether the mid-year protocol upgrades deliver on their scalability promises, and whether the market's extreme fear phase gives way to the accumulation pattern that on-chain data is beginning to show. Those are the forces that will determine where ETH trades in Q3 and Q4 2026 — not the charitable giving habits of its co-founder.

References:

• Lookonchain (on-chain analytics)
• Arkham Intelligence (wallet tracking)
• Decrypt
• DL News
• CryptoPotato
• Phemex News
• BeInCrypto
• CryptoQuant
• Cointelegraph (weekly digest)
• Vitalik Buterin (X/Twitter — January 30, 2026 post)
• Standard Chartered (Geoffrey Kendrick, February 3, 2026 research note)