Bitwise CIO on Ether’s ‘Demand Shock’: Why ETH’s Rally Has Staying Power

Ether’s recent price surge is attributed to a “demand shock,” according to Bitwise Asset Management CIO Matthew Hougan. This surge stems from significant inflows into exchange-traded products (ETPs) and corporate treasury strategies. Since mid-May, Hougan estimates that spot ETH ETPs and corporate treasuries have acquired approximately 2.83 million ETH—roughly $10 billion—a figure exceeding net new ETH issuance by a factor of 32.

This dynamic, while familiar to Bitcoin for over a year, is relatively new for ETH. Spot ether ETPs, launched in July 2024, gained limited traction until May 15, 2025, accumulating only $2.5 billion. Prior to this recent surge, ETH lacked the institutional support seen in Bitcoin, with minimal involvement from corporate treasury companies.

The past two months have witnessed a change, with the emergence of publicly traded treasury holders like BitMine Immersion Technologies (BMNR) and SharpLink Gaming (SBET), significantly adding to ETH holdings while engaging in staking for yield. Coupled with accelerating ETP momentum, this has created a substantial supply imbalance.

Hougan projects even greater demand, potentially reaching $20 billion in ETH purchases over the next year by treasury firms and ETPs. This would translate to approximately 5.33 million ETH, significantly outpacing the projected 800,000 new ETH issued by Ethereum. While acknowledging that ETH’s price isn’t solely determined by supply and demand, and its long-term issuance isn’t capped like Bitcoin’s, Hougan asserts that this factor is currently irrelevant.

Technically, ETH’s recent trading showed a range of $134.34 between July 22nd and 23rd, fluctuating between $3,763.70 and $3,629.35. Institutional resistance appeared near $3,750–$3,760, with volume peaking at 445,297 contracts. A 1% decline occurred in the final trading hours as corporate sellers entered above $3,740. The $3,700 mark acts as a key pivot point, suggesting potential consolidation. Volume spikes above $3,740 indicate large-scale distribution. At the time of writing, ETH trades at $3,658, showing significant gains over the past 7, 14, and 30-day periods.