The Lisk Foundation, led by co-founder and CEO Max Kordek, will convert 1,000 bitcoin (BTC) to ethereum (ETH) over the next 10 weeks.
Ready to convert 1,000 BTC
In a May 11 tweet, the CEO said the decision is to minimize risks associated with third parties. As such, the Lisk Foundation will sell 100 BTC every week for the next two and a half months.
ETH purchased will be deposited into a 2 of 3 multisig account, and each Lisk Foundation board member will have a key.
The measure is aimed at strengthening the foundation’s long-term treasury.
Kordek clarified that the intention is to stake the acquired ETH, although this process will not happen immediately.
The project also intends to retain 500 BTC to cover expenses in 2024 and 2025.
Furthermore, Kordek, in a answer to a user on Twitter, stated that the Lisk Foundation has enough fiat currency to sustain operations until the next bitcoin halving event.
In 2024, the Bitcoin network will halve the miners’ rewards. It’s a move that would drastically reduce miners’ profits, as the circulating supply will also gradually decrease.
Kordek outlined three main reasons behind the decision to sell BTC for ETH.
First, Ethereum’s position as the world’s largest smart contracting platform aligns with its treasury goals to support decentralized applications (dapps).
Second, ETH is considered to have acceptable risks from a treasury perspective.
Lastly, Ethereum’s staking mechanism can provide a sustainable long-term return on investment (ROI).
Kordek emphasized the benefits of investing in an appreciable, deflationary asset that generates returns.
The impact of Lisk on BTC prices
Lisk gained significant recognition during the Initial Coin Offering (ICO) frenzy of 2016 and 2017 when it raised 14,000 BTC.
Its native coin, LSK, has a market capitalization of $106 million and ranks 195th, according to CoinMarketCap.
Despite bitcoin’s price recovery in April, when the coin surged to $31,000, the coin remains under pressure to write, falling 10% in the last week of trading.
The impact of Lisk transactions on the bitcoin price is likely to be minimal. Your 1000 BTC will be gradually sold over 10 weeks.
The current bitcoin and cryptocurrency market is believed to be suffering from limited liquidity due to Operation Choke Point 2.0 in the United States, which targets cryptocurrency companies, including exchanges.
Insufficient liquidity can typically lead to inefficiencies in the market, leading to price fluctuations that can discourage experienced traders from participating in the market.
