Institutional whales pouring in cause ETH to face demand shocks; Bitwise CIO warns of imminent price turbulence | Ethereum market analysis

Ethereum (ETH) has recently encountered an unprecedented wave of institutional demand, with Spot ETFs and corporate treasuries absorbing ETH at a rate 32 times the net issuance. Bitwise Chief Investment Officer Matt Hougan warns that this could lead to a historic price shock. Despite the surge in demand pushing the ETH price up over 150% from the April low, it still has not been able to break through the psychological barrier of $4000. Bitwise predicts that institutions may purchase $20 billion worth of ETH (approximately 5.33 million coins) in the coming year, while the net issuance during the same period is only 800,000 coins, leading to a potential supply-demand imbalance of 7:1. Crypto Assets investors need to closely follow the competition for the key $4000 level and the flow of institutional funds.

Institutional demand surges, Ethereum faces historic supply-demand imbalance In the past few weeks, Ethereum ( ETH ) has experienced an unprecedented wave of institutional demand. Exchange-traded funds ( ETFs ) and corporate treasuries are absorbing the circulating supply of ETH in the market at an unprecedented rate. In this context, the Ethereum price experienced a strong rebound after a decline at the beginning of 2025, rising by more than 50% in the past month and over 150% since the April low.

Bitwise Chief Investment Officer Matt Hougan pointed out that this round of rising momentum stems from institutional accumulation, which is outpacing the net issuance of Ethereum. "Since May 15, the Spot Ethereum ETP (exchange-traded product) has performed strongly, attracting over $5 billion in funds... According to our estimates, ETPs and corporate treasuries have collectively purchased 2.83 million ETH—equating to over $10 billion at current prices. This is equivalent to 32 times the net new supply during the same period," Hougan stated in a series of tweets.

This stands in stark contrast to previous trends. Although the Ethereum ETF is set to launch in July 2024, its impact remains relatively mild until mid-May 2025, with only $2.5 billion inflow. At that time, supply and demand were roughly balanced, leading to a market consolidation. However, with the recent surge in institutional funds and companies like BitMine and SharpLink Gaming announcing the inclusion of Ethereum in their treasury strategies, the situation has rapidly changed.

This development trend corresponds with the performance of Bitcoin over the past 18 months, during which BTC ETFs and buyers such as MicroStrategy (now known as Strategy) absorbed more than 100% of the new BTC supply. Ethereum seems to be entering a similar accumulation phase, with a more aggressive purchasing strength relative to the new issuance volume. This Bitwise executive has not seen any signs of a slowdown. "ETP investors' allocation on Ethereum is still significantly lower than that on Bitcoin," he pointed out.

Ethereum is still undervalued compared to Bitcoin, but $20 billion in institutional funds may flow in Hougan pointed out that the market capitalization of Ethereum (449.8 billion USD) is only 19% of Bitcoin's market capitalization (2.3 trillion USD). In addition, the assets under management of Ethereum ETF are also just slightly higher than 12% of the assets managed by Bitcoin ETF. However, as market interest in stablecoins and tokenization surges, Bitwise expects that the inflow of funds into Ethereum ETFs will remain strong for a long time to come.

This is consistent with a recent report from BeInCrypto, which predicts that the Ethereum ETF will have its best month since being approved in May 2024. "The US Ethereum ETF saw a net inflow of $564.2 million in May, $1.17 billion in June, and $507.4 million from July to date (at the time of reporting), showing strong recent performance. The $211.3 million net inflow yesterday was the eighth best single-day performance in history," wrote crypto assets analyst Mads Eberhardt in a recent article. The adoption by enterprises is also expected to accelerate, and treasury strategies are increasingly favored. Hougan believes that as long as the trading price of publicly listed companies holding ETH continues to be higher than its net asset value premium, this trend will continue. "Full speed ahead," he concluded.

The latest remarks reinforce his prediction from July 2nd. According to reports, Hougan stated at that time that the Ethereum ETF is likely to dominate the second half of 2025. Bitwise currently estimates that ETPs and treasury companies may purchase up to $20 billion worth of Ethereum in the next year, equivalent to approximately 5.33 million ETH tokens. In contrast, the expected net issuance of Ethereum during the same period is only 800,000 ETH tokens, which may create a 7:1 imbalance between demand and supply. "In the short term, the prices of all assets are determined by supply and demand... and currently, the demand for ETH significantly exceeds the new supply," Hougan concluded.

Key Price Levels and Market Impact

  • Psychological Barrier: $4000 (tested this level in mid-December 2024)
  • Current Support: The technical support area formed by the recent Rebound (the specific points are not clearly stated in the text, but attention should be paid to the buying support brought by the continuous purchases from institutions)
  • Upside potential: If institutions continue to make large purchases and successfully break through $4000, it may open up greater upside potential. The supply-demand imbalance (7:1) is the core potential driving force.
  • Risk Warning: If institutional capital inflows significantly slow down or reverse, it may weaken the current strong buying support.

Conclusion: Ethereum is experiencing a historic demand shock led by institutions, with massive purchases from Spot ETFs and corporate treasuries creating a 32-fold supply-demand gap. Bitwise predicts that institutional funds worth $20 billion may continue to flood in over the next year, while the net issuance during the same period is only 800,000 ETH, presenting a potential 7:1 supply-demand imbalance that provides strong upward pressure on prices. However, the ETH price is currently blocked by the key psychological barrier of $4,000. Investors need to pay close attention to: 1) the breakout situation of this resistance level; 2) the sustainability of institutional fund inflows (especially ETF data); 3) broader market sentiment. If institutional buying persists, ETH is likely to undergo a significant price reevaluation; conversely, if demand weakens, caution should be exercised regarding the risk of a pullback. The current market is on the eve of a potential major shock.

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