Why Ether’s Surge Could Last: Insights from Bitwise’s Chief Investment Officer

Ethereum Faces $10B Demand Surge as Institutions Drive Supply Squeeze, Says Bitwise CIO

Ethereum’s recent rally may be just the beginning of a larger structural shift, according to Bitwise CIO Matthew Hougan, who says a growing imbalance between demand and supply is building a long-term bullish case for ETH.

In a post on X Tuesday, Hougan described the market as experiencing an “ETH demand shock,” driven by spot ether ETFs and corporate treasuries acquiring millions of ETH — far outpacing new issuance. He estimates that since mid-May, these buyers have accumulated 2.83 million ETH, worth roughly $10 billion, while only 87,000 ETH have been newly issued during the same period.

“Sometimes, it really is that simple,” Hougan said. “When demand is 32x higher than supply, prices go up.”

While Bitcoin has been subject to this dynamic since its spot ETF debut, Hougan suggests Ethereum is now entering a similar phase, one fueled by rapidly growing institutional interest.

Institutional Buying Accelerates

Spot ETH exchange-traded products were launched in July 2024, but investor appetite remained limited through early 2025. By mid-May, total net inflows stood at $2.5 billion, roughly 660,000 ETH — closely aligned with Ethereum’s net issuance.

However, Hougan notes that the past two months marked a shift. Companies like BitMine Immersion Technologies (BMNR) and SharpLink Gaming (SBET) began acquiring ETH for treasury reserves and staking. Meanwhile, ETP flows picked up significantly, driving a cumulative imbalance and putting upward pressure on prices.

Looking Forward: More Demand, Less Supply

According to Hougan’s projections, if the current pace holds, ETH ETFs and corporate treasuries could absorb $20 billion in ETH (around 5.33 million ETH) over the next year. In comparison, only 800,000 new ETH are expected to be issued over that period, underscoring the growing strain on available supply.

While ETH doesn’t have Bitcoin’s capped supply, Hougan says the current setup makes tokenomics secondary: “Right now, demand is overwhelming everything else.”

ETH Price and Technical Overview

At the time of writing, ETH trades at $3,658, slightly down 0.69% on the day. However, momentum remains strong:

+15.8% over the past 7 days
+40.1% over 14 days
+62.5% over the past month

Key Technical Highlights:

ETH traded in a $134 range from $3,763.70 to $3,629.35 on July 22–23.
Institutional resistance formed at $3,750–$3,760.
ETH closed at $3,661.35, down 1% after late-session selling.
The $3,700 zone has emerged as a key pivot, acting as both resistance and support.
Volume spikes above $3,740 point to possible distribution and near-term consolidation.