Ethereum’s supply is dwindling faster than ever, with charts from several trackers showing more than 40% of all Ether is now locked out of circulation. Analysts see the limited liquidity, staking pool activity uptick, and insatiable institutional appetite leading the world’s second-largest coin back up to record highs.
According to market data shared by community member Taylor.eth on Tuesday, roughly 3.4% of Ethereum’s circulating supply is held by dormant addresses and decentralized autonomous treasuries (DATs), making those tokens illiquid for years or permanently.
ETH’s circulating supply is shrinking super fast
3.4% held by DATs (illiquid for years or forever)
7.3% held by ETFs (illiquid 80% of time)
29.5% (majority illiquid due to exit rate limit)ETH hasn’t undergone a cycle where these three supply vacuums existed. DATs are new, Spot… pic.twitter.com/yl9fDEnOuB
— Taylor.eth (@Taylorlikeseth) October 14, 2025
Taylor mentioned 7.3% is parked in exchange-traded funds (ETFs), most of which are idle nearly 80% of the time. However, about 29.5% of total supply is staked within Ethereum’s proof-of-stake network.
The staked portion is mostly inaccessible due to the slow exit rate limit for validators, which currently stands at around 40 days. Combined, all these pools have sidelined more than two-fifths of the crypto’s total supply, enough to create a crunch for the coming months.
Quoting the stats from Taylor.eth, crypto analyst Crypto Gucci noted that Ethereum has never experienced a market cycle with all three supply vacuums active simultaneously.
“This time, ETH enters the cycle with record institutional demand and the smallest liquid float in history. When demand meets a shrinking supply like this, price doesn’t just go up, it goes nuclear,” the long-term investor surmised.
Institutional demand has scooped up 12% of ETH supply
According to data compiled by Ark Investments, US-based exchange-traded funds have already absorbed 6.84 million ETH, worth approximately $28 billion, about 5.6% of total supply. This accumulation occurred even without the approval of ETH staking in those ETFs.
Public companies on Ark’s notice board are collectively holding over 12% of the total ETH supply. Among them is Tom Lee’s Bitmine, which purchased $834 million worth of ETH earlier this week. The firm now holds $12.52 billion in Ethereum, more than halfway toward its target of controlling 5% of the total circulating supply, according to on-chain data platform Arkham Intelligence.
Investor Ted Pillows supported Crypto Gucci’s bullish sentiment, suggesting Ethereum could be severely undervalued compared to macroeconomic benchmarks.
“$ETH will catch up with the M2 supply in Q4. The fair value of Ethereum is $8,000–$10,000 by Q1 2026. With institutional bidding and staking approval, I think ETH will rally hard,” he wrote on X.
According to CryptoQuant contributor Arab Chain, Ethereum’s supply ratio on Binance ratio dropped to 0.33 this week, nearing the lows last observed in May, after a brief period of buildup in tandem with ETH’s price stabilizing near $4,000.
He explained that the decline in this ratio could mean investors are moving assets off exchanges to long-term holdings or staking, which subsequently reduces selling pressure.
Between 2018 and 2021, increases in the Binance supply ratio preceded price correction phases in anticipation of a selloff. However, at the times when heavy withdrawals took place, such as the current one, coins have experienced strong upward movements in price.
Will Ethereum record another ATH soon?
Tracking how exchange reserves are going low, Arab Chain said many holders could be storing Ethereum outside centralized exchanges because they have more confidence in decentralized custody and staking solutions.
Despite the bullish sentiment, some traders on social media have dismissed the “supply vacuum” theory as overhyped.
“This supply narrative has been touted for over a year now,” one X user commented. “The price hasn’t broken and stayed above previous all-time highs but instead round-tripped to 2017 levels.”
At the time of this publication, Ethereum is trading near the mid-$4,100 range after rebounding from a correction that took it down to $3,900 on Friday. Technical analysts say the current price structure looks slightly bullish, as long as ETH holds above the $3,990 support zone.
