Ethereum, which has spiked nearly 14% over the past week, will likely “head higher in the coming months,”as investor demand for ETH outstrips demand, according to Bitwise Chief Investment Officer Matt Hougan,
Exchange-traded products based on Ethereum and treasury companies are likely to buy $20 billion of the asset over the next year, while the Ethereum network will probably produce 800,000 ETH during the same period, Hougan wrote.
“That’s nearly 7x more demand than new supply—an even higher ratio than we’ve seen for Bitcoin since the spot ETPs launched in 2024,” Hougan wrote in a recent memo. “You could argue that ETH is different from BTC, that its price is not set purely by supply and demand, and that it doesn’t share BTC’s capped long-term issuance. That’s true in an absolute sense, but right now, it doesn’t matter.”
“In the short term, the price of everything is set by supply and demand, and right now, there is more demand for ETH than supply. As a result, I think we’re heading higher,” he wrote.
Hougan attributed Ethereum’s recent gains largely to the impact of Ethereum exchange-traded products, which debuted a year ago to a lukewarm reception but whose momentum has accelerated since mid-May, and rapid expansion of ETH treasuries.
“Spot Ethereum ETPs have been on a tear,” Hougan wrote. “Corporations have also gotten into the game, with multiple firms announcing the creation of new Ethereum treasury strategies.”
The nine spot Ethereum funds have generated $5 billion in net investments since May 15, double the total of their first 10 months, based on data from U.K. investment manager Farside Investors. The ETFs have received more than $2.5 billion in inflows just over the past five days.
“Through May 15, 2025—roughly 10 months after they launched—Ethereum ETPs had purchased just 660K ETH, with ~$2.5 billion in inflows,” Hougan wrote. “Meanwhile, purchases by public companies were de minimis. And over the same time frame, the Ethereum network produced 543K new ETH—basically a wash.”
The emergence of Ethereum treasuries underscores a widening belief in Ethereum’s potential, particularly following the passage of the GENIUS Act, which is likely to benefit the network–the blockchain of choice among Ethereum developers.
BitMine Immersion (BMNR), which pivoted its focus from Bitcoin mining less than a month ago, now holds $1.13 billion worth of ETH. Marketing affiliate Sharplink Gaming’s (SBET) holdings have exceeded $1 billion with its more recent buy and Bit Digital (BTBT), which also shifted from mining, announced that it picked up $375 million worth of ETH for its treasury.
BitMine Immersion’s transformation caught the attention of acclaimed Bitcoiner Cathie Wood’s ARK Invest. The investment management firm recently added $182 million worth of BNMR shares to its ARK Innovation ETF, ARK Next Generation Internet ETF, and ARK Fintech Innovation ETF funds.
Despite Hougan’s rosy forecast and similar ETH bullishness among other market observers, the asset’s price lost some of its levity on Wednesday as it traded at about $3,600, down nearly 2%.
“Ethereum, despite major inflows, is struggling to maintain upward momentum,” lead research analyst at BRN, Valentin Fournier, wrote in a Wednesday note shared with Decrypt, “highlighting a growing disconnect between institutional demand and short-term price movement.”
He added that while solid interest in ETFs and institutional adoption supports the long-term bull case, there are signs that the market is taking a breather.
“The widening gap between demand and price action suggests a short-term dip is increasingly likely, even if the end-of-year outlook remains bullish. We’re maintaining a cautious positioning with a significant cash buffer to take advantage of better entries,” Fournier wrote.
