Bitwise CIO Warns That Ethereum Demand Shock Will Rock Markets

The abrupt increase in institutional and corporate interest in Ethereum (ETH) is paving the way for what Matt Hougan, chief investment officer at Bitwise Asset Management, refers to as a “structural imbalance” between supply and demand. This imbalance could drive prices well above the cryptocurrency’s already sharp rise this year.

Hougan wrote in a memo sent to clients on July 22, 2025, that Ether has increased by over 160 percent since April and more than 65 percent in the last month. He contends that a stark discrepancy between the quantity of Ether generated by the network and the amounts currently being absorbed by exchange-traded products (ETPs) and recently established “ETH treasury” firms is what is driving the rally rather than just sentiment.

Ethereum Demand Shock Is Inevitable

Sometimes it really is that easy,” Hougan wrote, reiterating his long-held belief that flows largely determine asset prices in the short term. Following the introduction of U.S. spot bitcoin ETPs in January 2024, “ETPs, corporations, and governments acquired more than 1.5 million bitcoin, while the Bitcoin blockchain produced just over 300,000.” He drew a clear comparison between this and Bitcoin’s exponential performance.

He argues that the Ether market has finally experienced the same process, albeit with greater vigor. Spot Ether ETPs saw net inflows of almost $5 billion between May 15 and July 20, and a few publicly traded corporations started hoarding the token as their main treasury asset. Among the most combative purchasers:

With 300,657 ETH, or roughly $1.13 billion at today’s exchange rates, Bitmine Immersion Technologies (BMNR) stated that it aimed “to obtain 5 percent of all ETH supply.”
SharpLink Gaming (SBET) revealed plans to raise an additional $6 billion for future acquisitions after purchasing 280,706 ETH ($1.06 billion).
After obtaining $170 million, Bit Digital (BTBT) sold off its bitcoin holdings and transferred the money to over 100,000 ETH, or around $375 million.
An IPO based on a $1.6 billion Ether treasury was described by The Ether Machine (DYNX).

Over the course of the nine weeks, ETPs and publicly traded firms purchased over 2.83 million Ether, which is worth more than $10 billion. Only roughly 88,000 ETH were issued by the Ethereum network during that time, according to Hougan’s calculation of the demand-to-supply ratio of 32 to 1. “It’s no surprise that the price of ETH has skyrocketed,” he said.

The main concern for investors now is whether that pressure will persist. Hougan gives a resounding “yes.” He notes that in the ETP market, ether is still underowned in comparison to bitcoin, despite the recent buying frenzy:

Even though ETH’s market capitalization is about one-fifth that of BTC, ether funds own less than 12% of the assets held by Bitcoin ETPs. He predicted billions of dollars in new inflows “in the next few months,” saying, “With all the excitement surrounding stablecoins and tokenization—which are primarily built on Ethereum—we think that will change.”

At the same time, listed “crypto treasury” corporations seem to be self-reinforcing in their economics. Each of BMNR’s and SBET’s shares trades for almost twice the net value of the Ether they own, which encourages management teams to raise money, issue equity, and buy more ETH. Hougan added, “You can bet Wall Street firms will funnel money into more ETH purchases as long as that remains true.”

According to Bitwise, over the course of the upcoming year, ETPs and treasury firms may take in up to $20 billion worth of Ether, or about 5.33 million coins at current pricing. In comparison, it is anticipated that the protocol’s issuance timetable will only add roughly 800,000 ETH to circulation over the same time frame, suggesting a 7-to-1 imbalance.

Hougan stated, “That ratio is even higher than we’ve seen for Bitcoin since the launch of the spot ETPs.” Ether’s long-term supply is not capped like Bitcoin’s, according to skeptics, and its value depends on variables other than mere scarcity, like network usage and transaction fees. Hougan maintains that those arguments are secondary in the short run, but he does not refute them. “Everything has a set price in the short term.”

by supply and demand, and right now, there is more demand for ETH than supply,” he concluded.

At press time, ETH traded at $3,703.

 

 

 

 

 

 

 

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