Bitwise CIO: ETH Supply Crunch Signals Rally May Just Be Getting Started
Ethereum’s rally may still have legs, according to Bitwise CIO Matthew Hougan, who points to a deepening supply-demand imbalance driven by surging institutional demand. Hougan says Ethereum is undergoing a “demand shock,” as spot ether ETFs and corporate treasury buyers continue to soak up circulating supply.
In a thread posted Tuesday on X, Hougan estimated that since mid-May, a combined 2.83 million ETH — worth roughly $10 billion — has been acquired by exchange-traded products and corporate treasuries. That figure dwarfs the net new ETH issuance over the same period, which stands at just 87,000 ETH.
“Sometimes, it really is that easy,” Hougan noted, referring to basic market mechanics. “If demand vastly exceeds supply, prices rise.” While Bitcoin has benefitted from this dynamic since the launch of U.S. spot ETFs, Ethereum is now entering a similar phase, he argued.
From Slow Start to Sudden Acceleration
Though spot ether ETPs were approved in July 2024, adoption remained modest for months. By mid-May 2025, total net inflows reached just $2.5 billion, and holdings stood at around 660,000 ETH — nearly on par with the 543,000 ETH issued by the network during that time.
But things changed dramatically in recent weeks. Treasury holdings by public firms like BitMine Immersion Technologies (BMNR) and SharpLink Gaming (SBET) surged, as these companies began allocating ETH for staking. Combined with renewed ETF inflows, the buying pressure has outpaced new issuance by a factor of 32, Hougan said.
Looking Ahead: $20B in Potential Institutional Demand?
Hougan projects that if ETPs and corporate buyers continue at this pace, they could collectively purchase another $20 billion worth of ETH — or about 5.33 million coins — over the next 12 months. That compares to an estimated 800,000 ETH in net new issuance over the same timeframe, based on current burn and staking trends.
“ETH is different from BTC — it’s not capped, and price isn’t solely dictated by supply and demand,” Hougan acknowledged. “But right now, that doesn’t matter. Structural demand is overwhelming available supply.”
Price Action and Technicals
At the time of writing, Ethereum is trading at $3,658, down 0.69% over the past 24 hours. On a broader time scale, ETH remains strong, up 15.8% over the past week, 40.1% over two weeks, and 62.5% in the past 30 days, according to CoinDesk data.
Technical analysis highlights:
- Range: ETH moved between $3,763.70 and $3,629.35 from July 22–23, according to CoinDesk Research.
- Resistance Zone: Heavy sell pressure appeared near $3,750–$3,760.
- Closing Action: ETH dipped 1% to close at $3,661.35 as corporate selling emerged above $3,740.
- Support Pivot: $3,700 is now acting as a critical pivot level.
- Volume: Spikes above $3,740 suggest distribution activity, pointing to potential near-term consolidation.
