Ethereum’s price has surged sharply in recent weeks, and according to Bitwise CIO Matt Hougan, the reason is simple—skyrocketing demand. ETH has gained over 50% in the past month and more than 150% since its April lows.
This rally is being driven by overwhelming institutional interest from ETPs and corporate treasuries. Moreover, the sudden spike in demand far exceeds the network’s current supply output, causing a supply shock.
Hougan points out that in contrast to Bitcoin, Ethereum didn’t gain momentum from the spot ETPs that were launched back in July 2024. For a while, specifically until mid-May 2025, the inflows were modest. But since May 15, Ethereum ETPs have managed to pull in over $5 billion.
Corporations like Bitmine and SharpLink have also joined in, allocating ETH to their treasury reserves. Combined, these entities have acquired 2.83 million ETH, which is about 32 times the new ETH produced during the same period.
Supply Shock Tightens Ethereum’s Market
At the same time, on-chain data shows that nearly 29% of ETH is currently locked in staking. Investor and journalist Paul Barron noted on X that exchange balances have hit an eight-year low, with just 13.5% of ETH available on major platforms. Last week, around 140,000 ETH left exchanges.
Consequently, the total supply is nearing 130 million, while the circulating supply is at about 121 million. The daily inflows of $500 million into ETPs are pressuring the current liquidity. With demand going up and prices climbing, ETH is becoming scarcer.
Moreover, treasury-backed ETH firms trade at premiums, which indicates a strong demand from investors. Hougan forecasts that there may be up to $20 billion in new ETH demand over the next year, while the new supply is only about 0.80 million ETH.
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