Bitwise CIO: Ether Facing $10B Supply Crunch as Institutional Demand Surges

A surge in institutional and treasury buying is creating a supply squeeze for ether (ETH), according to Bitwise Asset Management CIO Matthew Hougan — a dynamic he believes could push ETH prices significantly higher over time.

In a post on X Tuesday, Hougan described what he sees as an emerging “demand shock” for the second-largest cryptocurrency, fueled by a sharp rise in inflows to spot ether ETFs and growing adoption by corporate treasuries. Together, these two forces have absorbed roughly 2.83 million ETH — worth around $10 billion — since mid-May, vastly outpacing the 87,000 ETH issued during the same period.

“Sometimes it really is that simple,” Hougan wrote, emphasizing the core role of supply and demand. While bitcoin (BTC) has long benefitted from structural accumulation by institutions and ETF inflows, he noted that Ethereum is only now beginning to experience similar tailwinds.

Spot ETH ETFs and Corporate Treasuries Accelerate Accumulation

Hougan noted that spot ether ETFs, which launched in July 2024, initially saw muted activity. By May 15, total inflows stood at just $2.5 billion, with ETFs acquiring around 660,000 ETH, closely tracking ETH issuance during that time.

However, the landscape shifted dramatically in recent months. Publicly traded companies like BitMine Immersion Technologies (BMNR) and SharpLink Gaming (SBET) began accumulating ETH in significant quantities, primarily for staking purposes. This, combined with renewed ETF momentum, has created what Hougan described as a “structural imbalance” between ETH demand and new issuance.

Projections: More Demand, Less Supply

Looking ahead, Hougan estimates that if this pace continues, ETFs and treasury programs could acquire $20 billion worth of ETH — or about 5.33 million tokens — over the next 12 months. That figure would dwarf Ethereum’s expected issuance of just 800,000 ETH during the same period.

“ETH is, of course, different from BTC,” Hougan said. “It doesn’t have a hard cap and isn’t driven purely by supply and demand — but right now, none of that matters.”

At time of writing, ETH is trading at $3,658, down 0.69% on the day. Over the past month, the asset has surged more than 62%, buoyed by institutional flows and broader market strength.

Technical Analysis Snapshot

• Price Range (July 22–23): ETH traded between $3,763.70 and $3,629.35, a $134.34 intraday swing.
• Key Resistance: Institutional selling pressure intensified near $3,750–$3,760, with volume peaking at 445,297 contracts.
• Closing Price: ETH closed July 22 at $3,661.35, down 1% as sellers stepped in above $3,740.
• Pivot Zone: The $3,700 level remains pivotal, flipping between resistance and support in recent sessions.
• Volume Signals: Activity spikes above $3,740 indicate possible near-term consolidation as profit-taking emerges.