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- Bitwise’s CIO has noted in a recent memo that despite growing demand, many investors still hold far less Ethereum compared to Bitcoin.
- ETH itself has surged over 65% in the past month and more than 160% since April, a rally that the CIO credits to a supply-and-demand imbalance.
Ethereum (ETH) is currently experiencing what analysts are calling a “demand shock,” as institutional interest and corporate adoption skyrocket.
According to Bitwise Chief Investment Officer Matt Hougan, exchange‑traded funds (ETFs) and corporate treasuries have scooped up around 2.83 million ETH since May 15, worth an estimated $10 billion.
To put that in perspective, this demand is roughly 32 times more than what the Ethereum network minted in the same period. Hougan emphasized in the July 22 memo that this gap between supply and demand is not temporary but is likely to grow wider in the coming months.
He says,
The price of Ethereum is up more than 65% in the past month, and over 160% since April. But I think it’s headed higher still in the coming months, and for a simple reason: supply and demand.
He explained that Bitcoin’s (BTC) recent growth is rooted in a clear supply and demand imbalance. Since the approval of Bitcoin exchange-traded products (ETPs) in the U.S. in January 2024, institutional demand has surged.
ETPs, corporations, and even governments have acquired over 1.5 million BTC, while the Bitcoin network has produced just over 300,000 BTC in that time.
This 5-to-1 imbalance has fueled a 155% price increase, making Bitcoin the best-performing major asset globally during that period.
Ethereum, however, didn’t initially benefit from the same trend. In the first 10 months after Ethereum ETPs launched, only around 660,000 ETH, worth roughly $2.5 billion, was purchased, with minimal corporate adoption, while the network minted 543,000 new ETH, resulting in almost no net reduction in supply. Unsurprisingly, Ethereum’s price lagged behind Bitcoin for much of that period.
Who’s Buying ETH?
All signs point to the “ETH treasury company” trend picking up speed. For these companies, growth often depends on whether their stock trades at a premium compared to the value of the Ethereum they hold, and right now, that’s happening.
If this momentum continues, Ethereum exchange-traded products (ETPs) and ETH treasury companies could buy as much as $20 billion worth of ETH in the next year, which is about 5.33 million ETH at today’s prices.
Several companies have already made big moves. Bitmine Immersion Technologies (BMNR) started accumulating ETH in late June and now holds 300,657 ETH worth $1.13 billion, with a long-term goal of owning 5% of all Ethereum supply.
Crypto News Flash reported that SharpLink Gaming (SBET), a U.S.-based sports betting and iGaming technology firm, started its ETH purchases in July and has already amassed 280,706 ETH valued at $1.06 billion, with plans to raise an additional $6 billion to expand its holdings.
BioNexus Gene Lab, a biotechnology company specializing in genetic research, recently adopted Ethereum for its operations, while Ether Machine (DYNX) is preparing to go public with a massive $1.6 billion ETH treasury and plans for even more growth.
Bit Digital (BTBT) has taken it a step further, raising $170 million and even selling off its Bitcoin positions to acquire over 100,000 ETH worth more than $375 million.
“In the short term, prices are driven by supply and demand, and right now, demand for ETH is outpacing supply,” said Hougan, predicting a potential surge close to Ethereum’s all-time high of $4,891. Currently, ETH is trading at $3,622, up 12% over the past week despite a 2.33% dip in the last 24 hours, with daily trading volume down 26% to $37 billion.
