Bitwise: Ethereum Institutional Investments Expected to Surge by $20 Billion

Ethereum (ETH) has experienced unprecedented demand with a surge in institutional interest over the recent weeks. Accordingly, Matt Hougan, the Chief Investment Officer (CIO) of Bitwise, warns that a historic price shock is approaching.

Meanwhile, the Ethereum price has not reached the psychological level of 4000 dollars, which was last tested in mid-December 2024.

Ethereum, Demand Shock from Institutional Inflows

Exchange-Traded Funds (ETF) and corporate treasuries have quickly absorbed the available Ethereum supply over the past few weeks.

Against this backdrop, the Ethereum price has shown a strong rebound after the downturn in early 2025. The largest altcoin by market capitalization has risen by over 50% last month and more than 150% since its April low point.

According to Hougan, this upward trend stems from institutional accumulation, which significantly exceeds Ethereum's net issuance.

"Since May 15, spot Ethereum ETPs have surged, drawing in over $5 billion... By our estimates, ETPs and corporate treasuries have purchased 2.83 million ETH, which is over $10 billion at today's prices. This is 32 times the net new supply during the same period." – Matt Hougan, Bitwise CIO

This represents a sharp departure from previous trends. Ethereum ETFs were launched in July 2024, but their impact was minimal until mid-May 2025, with inflows of only $2.5 billion. At that time, supply and demand were largely balanced, and the market was stagnant.

However, in recent weeks, the institutional cash flow has surged rapidly, and companies like BitMine and Sharplink Gaming have announced Ethereum financial strategies.

This development is similar to how Bitcoin ETFs and corporate buyers like MicroStrategy (now Strategy) have purchased over 100% of newly issued Bitcoin over the past 18 months.

Ethereum now appears to be entering a similar accumulation phase with even more aggressive buying relative to new issuance. Bitwise executives see no signs of slowdown.

"ETP investors hold significantly less Ethereum compared to Bitcoin," he mentioned.

Ethereum Undervalued Compared to Bitcoin... Institutional Volume Surges by $2 Billion

Hougan points out that Ethereum's market capitalization ($449.8 billion) is less than 19% of Bitcoin's. Additionally, Ethereum ETFs hold less than 12% of the assets managed by Bitcoin ETFs.

However, with growing interest in stablecoins and tokenization, Bitwise expects ETH ETF inflows to remain strong for a long time.

This aligns with a recent BeInCrypto report that predicted the best month for Ethereum ETFs since approval in May 2024.

"In May $564.2 million, in June $1.17 billion, and an additional $507.4 million in July, the US Ethereum ETFs have shown strong performance. Yesterday's net inflow of $211.3 million was the eighth-best day on record," wrote cryptocurrency analyst Mads Eberhardt in a recent post.

Corporate adoption also seems to be accelerating, with financial strategies gaining attention. Hougan believes this trend will continue as long as listed companies holding ETH trade at a premium to their asset value.

"We're going full speed ahead," he added.

His latest statements reinforce his previous prediction on July 2nd. BeInCrypto reported that Hougan said Ethereum ETFs are likely to dominate the second half of 2025.

Bitwise now expects ETP and financial companies to purchase up to $20 billion worth of Ethereum next year, equivalent to about 5.33 million Ether tokens.

In contrast, Ethereum's expected net issuance is only 800,000 ETH tokens, setting up a potential 7:1 demand-to-supply imbalance.

"In the short term, the price of everything is determined by supply and demand... and right now, demand for ETH is much higher than new supply," Hougan concluded.

At the time of writing, Ethereum is trading at $3,716, up 0.82% in the past 24 hours.