Ethereum’s Meteoric Rise Fueled by Explosive Demand from ETFs and Corporations, Says Bitwise CIO

Ethereum (ETH) is enjoying a spectacular price rally, bolstered by a dramatic surge in demand from exchange-traded funds (ETFs) and corporate entities, according to Matt Hougan, Chief Investment Officer (CIO) at Bitwise Asset Management. Hougan notes that current ETH demand dwarfs its supply, pushing prices upward, and predicts that this trend could intensify with demand ultimately outpacing supply by as much as sevenfold. Hougan shared these insights on July 23 via his social media account on platform X.

Ethereum's Resurgence and Momentum

Following a shaky start to the year, Ethereum has reclaimed momentum in a big way. Over the past month, ETH has climbed over 50%, recovering robustly from earlier lows. Impressively, it has surged 150% from its bottom in April, reflecting renewed investor confidence.

Driving this impressive recovery is an undeniable supply-demand dynamic. Hougan attributes the rally to a surge of purchasing activity from ETFs and corporate treasuries. These institutional players have reportedly been buying ETH at a rate far exceeding its issuance, thereby creating a significant market imbalance.

Echoes of Bitcoin's Pathway

Ethereum’s newfound bull run bears resemblance to the dynamics observed in Bitcoin (BTC) after ETF launches for the flagship cryptocurrency. In early 2024, the introduction of Bitcoin ETFs led to a buying spree: roughly 1.5 million BTC were acquired by ETFs and corporate buyers, while miners added just 300,000 BTC to the market in the same period. The result was a 5:1 imbalance favoring demand over supply, which propelled Bitcoin prices to new heights.

Ethereum, however, had a comparatively muted market response when its ETFs first launched in July 2024. By May 15, 2025, Ethereum ETFs had collectively amassed 660,000 ETH—approximately equal to the issuance of 543,000 ETH during that phase. The market thus maintained a near-neutral supply-demand balance, leaving ETH prices relatively stagnant during this stretch.

The Mid-May Inflection Point: A Game Changer

The landscape for Ethereum shifted dramatically in mid-May 2025. Since May 15, over $5 billion in capital has flowed into Ethereum spot ETFs. Notably, corporates such as Bitmine and SharpLink have started holding ETH as part of their treasury reserves, signaling a broader institutional embrace.

Hougan backed this qualitative shift with striking numbers: ETFs and corporations acquired 2.83 million ETH—roughly $10 billion worth—while just 90,000 ETH were issued during this period. This unprecedented 32:1 supply-demand imbalance has been the cornerstone of Ethereum’s recent price surge.

Sustained Demand Outlook for Ethereum

The question on everyone’s mind: will this high demand for Ethereum continue? According to several analysts, the momentum is likely to persist. Considering that Ethereum-focused ETFs currently account for just 12% of the total Bitcoin ETF market size, room for significant growth remains. Adding perspective, Ethereum’s market capitalization is 19% of Bitcoin’s, highlighting the potential undervaluation of ETH-related financial products.

Moreover, Ethereum’s utility across stablecoins and asset tokenization—a rapidly growing segment dependent on the Ethereum blockchain—points to sustained demand. Companies incorporating ETH into their corporate treasuries are also reaping direct benefits: firms that hold Ethereum on their balance sheets have seen their stock prices outperforming the intrinsic value of their ETH holdings, further incentivizing adoption of ETH as a corporate asset.

Projected Growth: What Lies Ahead

Looking forward, industry projections foresee ETFs and corporate buyers collectively acquiring an additional $20 billion worth of Ethereum—equivalent to 5.33 million ETH—over the next year. By contrast, Ethereum’s issuance over the same period is estimated at just 800,000 ETH. This would culminate in a demand-to-supply ratio exceeding 7:1, reinforcing expectations for sustained price growth.

While Ethereum’s total issuance isn’t capped like Bitcoin, its short-term price dynamics remain driven by the unrelenting demand from institutional players. With demand far outstripping supply, Ethereum’s upward trend appears poised to persist for the foreseeable future.

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