The Ether supply is tightening as more $ETH is removed from active trading, according to a new report from Sygnum.
About 45% of all $ETH is now locked or hard to sell, Sygnum said in its Q1 2026 Investment Outlook. $ETH held on exchanges fell 14.5% during the quarter, continuing a multi-year decline. Meanwhile, exchange-traded funds (ETFs) now hold around 10% of total $ETH, and public companies own more than 6.1 million $ETH, equal to roughly 5% of the circulating supply.
The report says this shrinking supply could lead to larger price moves, but only if demand increases. Ethereum prices remain under pressure, with $ETH down roughly 40% from its short-lived all-time high after the October 2025 market sell-off. Currently, $ETH is trading at $2,736, down 8% on the week.
$ETH Chart
“Ethereum exhibits far stronger tailwinds on the back of a successful Fusaka upgrade, a fresh development roadmap, new ETF filings that include staking, corporate demand, and a rise in stablecoin and tokenisation activity,” the report reads.
One of the biggest drivers behind the supply decline is ETF activity. While Ethereum ETF flows turned negative in Q4 2025 (as investors reduced risk), Sygnum said net inflows for the year still totaled about 3.4 million $ETH, worth roughly $11.3 billion. The bank also found that on-chain ETF holdings continued to grow through the quarter and into January, reaching about 4 million $ETH.
Furthermore, staking is removing $ETH from circulation as more validators entered the network than exited over the quarter. In turn, this increased the amount of $ETH locked in staking contracts. Sygnum said this was primarily driven by large deposits from crypto firm BitMine.
In other findings, network activity increased during the quarter, with Ethereum processing more than 145 million transactions. It also recorded 8.7 million smart contract deployments, and posted $8 trillion in stablecoin transfer volumes – the highest quarterly level on record.
Still, Sygnum said that corporate demand for $ETH slowed toward the end of the year, as the share prices of many $ETH-holding public companies fell below the value of their $ETH holdings.
