Bitwise: The supply and demand relationship will support Ethereum to continue to pump.

Author: Matt Hougan, Chief Investment Officer of Bitwise; Translated by: Shaw, Golden Finance

The price of Ethereum has been rising recently. Here are the reasons why its price may continue to rise.

The price of Ethereum has risen by more than 65% in the past month, and since April, the increase has exceeded 160%. However, I believe it will continue to rise in the coming months, and the reason is simple: supply and demand.

Let me explain.

Asymmetry of Bitcoin

The bullish case for Bitcoin is simple: since the U.S. introduced spot Bitcoin exchange-traded products (ETPs) in January 2024, there has been a structural imbalance between demand and supply.

What kind of imbalance is this? ETPs, companies, and governments have purchased over 1.5 million bitcoins, while during the same period, the Bitcoin blockchain generated only about 300,000 bitcoins. Since then, the price of Bitcoin has increased by 155%, making it the best-performing major asset globally during this time.

Demand is five times greater than supply. Sometimes, things are really that simple.

How is Ethereum?

Until recently, Ethereum had not benefited from the same trend.

As of May 15, 2025, which is about 10 months after the launch of Ethereum Exchange-Traded Products (ETP), these ETPs have only acquired 660,000 ETH, with an inflow of approximately 2.5 billion dollars. Meanwhile, the purchase volume by listed companies is negligible. During the same period, the Ethereum network generated 543,000 new ETH, which is basically flat.

As expected, the price of Ethereum lags far behind that of Bitcoin.

Price Returns: Bitcoin vs. Ethereum

Source: Bitwise Asset Management, data range from December 31, 2023, to July 20, 2025.

However, the situation changed in mid-May. Since May 15, the Ethereum spot ETP market has soared, attracting over $5 billion in funds. Companies have also joined in, with several announcing new Ethereum treasury reserve management strategies. For example:

• Bitmine Immersion Technologies (BMNR) started purchasing ETH at the end of June and currently holds 300,657 ETH (worth 1.13 billion dollars). The company announced its long-term goal is to acquire 5% of the total supply of ETH.
• SharpLink Gaming (SBET) has been acquiring ETH since July and currently holds 280,706 ETH (worth 1.06 billion USD). The company plans to raise an additional 6 billion USD to purchase more ETH.
• Bit Digital (BTBT) raised $170 million and sold its Bitcoin positions to fund the purchase of over 100,000 ETH (worth over $375 million).
• Ether Machine (DYNX) announced plans to go public, holding a reserve of ETH valued at 1.6 billion dollars, and the goal is not limited to this.

In summary, since mid-May, ETP and listed companies have purchased 2.83 million ETH, which is over 10 billion dollars at current prices, 32 times the increase in ETH supply during the same period.

No wonder the price of ETH has skyrocketed.

Will this situation continue?

The correct question to ask next is: Will this situation continue?

We believe the answer is yes.

Investors' investment ratio in Ethereum and Bitcoin remains unbalanced: although Ethereum's market capitalization is about 20% of Bitcoin's, the assets accumulated in Ethereum ETP are less than 12% of Bitcoin ETP. Given the various trends surrounding stablecoins and tokenization (mainly built on Ethereum), we believe this situation will change, and billions of dollars will flow in over the next few months.

At the same time, various signs indicate that the trend of "ETH treasury reserve companies" will accelerate. The key to whether cryptocurrency treasury companies can achieve growth lies in whether the stock price of their publicly traded shares exceeds the value of the cryptocurrency assets they hold, and the current situation for Ethereum treasury companies is just that. For example, the stock prices of BMNR and SBET are nearly double the value of their Ethereum assets. As long as this situation continues, it can be assured that Wall Street companies will invest more funds to purchase ETH.

Looking ahead, if the ETP and ETH treasury management company purchases 20 billion USD worth of ETH in the coming year, at the current price, that would equate to 5.33 million ETH, which would not surprise us. Meanwhile, it is expected that the Ethereum network will add approximately 800,000 ETH during the same period. This means that the demand is nearly seven times the new supply, and this ratio is even higher than what Bitcoin has shown since the launch of spot ETPs in 2024.

You might say that Ethereum is different from Bitcoin, as its price is not solely determined by supply and demand, and it does not have a long-term issuance cap like Bitcoin. In an absolute sense, this is true, but it is not important at the moment.

In the short term, the prices of all things are determined by supply and demand, and currently, the demand for ETH exceeds the supply. Therefore, I believe its price will continue to rise.

Sometimes, things really are that simple.