Ethereum is in the midst of a "demand shock," with ETFs and newly created corporate treasury departments having purchased approximately 2.83 million ETH worth around $10 billion since May 15, as revealed by Bitwise's Chief Investment Officer Matt Hougan in a July 22 memo.
According to The Block on the 23rd, Ethereum is in the midst of a "demand shock," with ETFs and newly created corporate treasury departments having purchased approximately 2.83 million ETH worth around $10 billion since May 15, as Matt Hougan wrote in a July 22 memo. This is about 32 times more than the network's issuance during the same period, and the gap is likely to widen.
Hougan stated that Ether has risen by over 65% in the past month and more than 160% since April, explaining that this movement is primarily due to this imbalance rather than sentiment changes.
Bitwise's CIO compared this situation to Bitcoin's (BTC) rise in 2024. After the US spot Bitcoin ETF was launched in January 2024, Wall Street funds, listed companies like Strategy and Trump Media, and even governments accumulated over 1.5 million BTC, while mined coins slightly exceeded 300,000. Hougan said this 5-to-1 demand advantage helped drive the price up by 155%, making Bitcoin the top-performing major asset during that period. He wrote, "5 times more demand than supply. Sometimes it's really that simple."
Hougan said Ethereum did not initially enjoy such tailwinds. After its July 2024 launch, ETH ETFs purchased only 660,000 coins with about $2.5 billion in inflows over approximately 10 months, corporate purchases were minimal, and the issuance was a total of 543,000 ETH. Naturally, Ether lagged behind Bitcoin during that period.
However, the situation has changed. Since mid-May, spot ETH products have absorbed over $5 billion in Ether, and companies including BitMine Immersion, SharpLink Gaming, Bit Digital, and the soon-to-be-listed The Ether Machine have disclosed significant financial strategies. These companies have purchased a total of 2.83 million ETH and likely triggered the current rally above $3,800.
Hougan claims the capital flow is not over. He expects ETFs and ETH financial companies could purchase about $20 billion in Ether, or approximately 5.33 million coins, next year, which is almost a 7-to-1 ratio compared to the expected issuance of 800,000 ETH. He mentioned that investors still have a low allocation to Ethereum compared to Bitcoin, but anticipates rapid changes as stablecoin and tokenization trends continue to gain attention.
Hougan wrote, "In the short term, the price of everything is determined by supply and demand, and right now, demand for ETH is higher than supply," adding, "As a result, I think it will go higher."
For real-time news...Go to TokenPost Telegram
<Copyright โ TokenPost, unauthorized reproduction and redistribution prohibited>
