Ether has risen 150% since the low in April. ETF issuer Bitwise founder Matt Hougan pointed out that the demand from exchange-traded products (ETFs) and Ethereum Reserve Strategy companies is too large, leading to a severe supply-demand imbalance, and he believes this situation will continue in the future, with ETH still bullish!
The Ethereum Demand Shock
A thread on why ETH’s price is rising and why it will continue to rise in the months ahead.
— Matt Hougan (@Matt_Hougan) July 22, 2025
Continuous influx of funds, with supply and demand imbalance causing a significant rise in ETH
Matt Hougan explained the reasons for the recent rise in ETH prices.
Since mid-May, funds have significantly flowed into Ethereum ETFs, with over 5 billion dollars flowing in. Ethereum Reserve Strategy companies like Bitmine and SharpLink have also heavily entered the market to buy coins. According to Bitwise estimates, during this period, ETFs and Ethereum Reserve Strategy companies purchased a total of 2.83 million Ether, worth over 10 billion dollars, which is 32 times the increase in ETH supply during the same period. No wonder the rise in Ether is so astonishing!
Ethereum Reserve Strategy companies will accelerate the purchase of ETH
And Hougan predicts this situation will continue in the future!
The market capitalization of Ether is currently 20% of Bitcoin, but the scale of Ethereum ETFs is still less than 12% of Bitcoin ETFs. With the growing demand for tokenization and stablecoins (mainly based on Ethereum), Hougan believes this situation will change, and billions of dollars will flow into Ethereum ETFs in the coming months.
At the same time, all signs indicate that the trend of the 'Ethereum Reserve Strategy' will accelerate. The key to the growth of cryptocurrency asset management companies lies in whether the trading price of their publicly traded stock is higher than the value of the crypto assets they hold, and currently, ETH asset management companies indeed are. For example, the trading prices of BMNR and SBET are almost twice the value of their ETH holdings. As long as this situation continues, it can be assured that Wall Street firms will invest more funds to purchase ETH.
In 2025, ETFs and Ethereum Reserve Strategy companies will buy over 5 million ETH
Looking ahead, Bitwise predicts that ETFs and Ethereum Reserve Strategy companies will purchase ETH worth 20 billion dollars next year, which, at current prices, is equivalent to 5.33 million ETH. Meanwhile, the Ethereum network will produce about 800,000 ETH. This corresponds to a demand approximately 7 times the supply.
ETH is certainly different from BTC. Its price is not purely determined by supply and demand, nor does it have a long-term issuance cap like BTC. But Hougan believes this is not important at the moment.
In the short term, the prices of all commodities are determined by supply and demand. Currently, the demand for ETH far exceeds the new supply.
This article Bitwise: ETF and Ethereum Reserve Companies Cause Supply and Demand Imbalance, ETH Still Bullish in the Future first appeared on Chain News ABMedia.
