Vitalik Buterin, the co-founder of Ethereum, has recently made headlines by cashing in cryptocurrency airdrops, a process that involves exchanging tokens received as gifts for Ether. Just recently, he offloaded 500 trillion SHIKOKU tokens (SHIK) for 380.3 ETH, bringing a total of nearly $700,000. His move had an immediate effect on the prices of the tokens, the largest being SHIK, which experienced an 86% drop since Buterin sold his holdings.
The price drops associated with Buterin’s actions have left some within the cryptocurrency community with mixed opinions, including some pointing to possible tax implications of receiving airdrops and others accusing him of hoarding coins. After all, Buterin did mention in a 2018 tweet that he held tokens from a pre-mining sales with fellow Ethereum co-founder Joe Lubin, compared to now, when he has sold off several small cryptocurrencies including Shiba Inu (SHIB) and Dogelon Mars (ELON). This has led to price drops of 40% and 90% respectively.
So the question remains: is Buterin cashing out cryptocurrency airdrops out of necessity or is there something else going on?
Some suggest that the Ethereum co-founder is simply trying to manage the taxation on the airdrops. After all, many countries require you to pay taxes on such income. It’s easy to see how one could see an incentive in paying off the expense immediately. Buterin himself even backed this premise in a tweet, stating that his accountant had informed him that the tokens would be subject to income tax.
Others point out that this isn’t the first time that Buterin has cashed out cryptocurrency airdrops, and that it is something he has been doing for a while. He even went as far as burning billions worth of SHIB and donating some of it to causes such as the India COVID-19 Relief Fund. This could suggest that Buterin cashing out is simply a way of managing his own wealth, or possibly influencing the prices of the tokens he wishes to acquire or sell.
Until Buterin confirms either option, the public is left to speculate. This isn’t too surprising as it’s not uncommon for cryptocurrency experts to diversify their portfolios and make sure their finances stay in order. After all, with cryptocurrency prices always fluctuating, it’s important to keep tabs on the value of one’s holdings.
Whether it’s for tax implications or just to preserve and grow his wealth, cashing out cryptocurrency airdrops is an important subject for any individuals partaking in the crypto space, and one that requires further discussion. Until then, enthusiasts will continue to closely monitor Buterin’s wallet activity.
