Coinbase's Ethereum Holdings Under Scrutiny Amid Price Pressure Claims

Coinbase has been at the center of controversy after claims surfaced that the company is selling Ethereum (ETH) to buy Bitcoin. A recent report by blockchain outlet Cryptopolitan sparked debate, with some investors accusing Coinbase of putting price pressure on ether rather than increasing its value.

Critics point out that Coinbase operates Base, a layer-2 network run by the company, and fees generated from transactions are paid in ETH. These funds are then converted into dollars or Bitcoin (BTC), leading some to believe that Coinbase is profiting from selling ETH.

Jesse Pollak, Coinbase's engineering vice president, countered these claims by highlighting the company's large ETH holdings. According to Strategic ETH Reserve estimates, Coinbase currently holds about 151,180 ETH, valued at around $256 million. This represents a significant amount of ether, and Pollak argued that viewing Coinbase as simply a seller does not fully reflect reality.

Pollak also emphasized the company's contributions to the Ethereum ecosystem, including its role in adopting EIP-4844, an upgrade that reduced layer-2 costs, and its involvement in launching major stablecoin USDC. He pointed out that Base has grown into one of the most active layer-2 networks on Ethereum, with recent decentralization efforts reducing Coinbase's direct control over chain operations.