Ethereum News Today: Ethereum Demand Surges 7:1 as Institutions Buy 5.33M ETH Amid Structural Imbalance

Matt Hougan, Chief Investment Officer at Bitwise Asset Management, has highlighted a potential surge in demand for Ethereum (ETH), driven by institutional investors and corporate treasury activity. According to Hougan, the trend of Ethereum Treasury Companies and the recent approval of Ethereum ETPs in the U.S. could create a structural imbalance between supply and demand, with demand outpacing production by a ratio of 7:1 over the next 12 months [1]. This analysis follows a sharp increase in institutional purchases, with ETPs and corporate treasuries collectively acquiring 2.83 million ETH (valued at over $10 billion at current prices) since May 15 [1].

Hougan notes that while Bitcoin has historically attracted institutional demand through companies like MicroStrategy, Ethereum only began gaining similar traction in May 2024. The shift is attributed to Ethereum’s expanding role in decentralized finance (DeFi), stablecoin infrastructure, and tokenization, which are attracting capital from investors previously underweight in ETH compared to Bitcoin [1]. He estimates that if current trends continue, institutional buyers could purchase an additional 5.33 million ETH (worth $20 billion) in the coming year, far exceeding Ethereum’s projected supply of 0.8 million ETH during the same period [1].

The CIO emphasized that Ethereum’s demand is increasingly decoupled from Bitcoin’s price movements, which are often influenced by macroeconomic factors. “For the time being, there is significantly more demand for ETH than there is new supply,” Hougan stated, underscoring the potential for sustained price momentum [1]. This divergence is attributed to Ethereum’s utility in enterprise applications, including yield-generating protocols and smart contract platforms, which are becoming integral to institutional portfolios [2].

Separately, a crypto entrepreneur has speculated that Ethereum could reach $10,000 by year-end 2025, citing institutional demand as a key driver. However, this projection is labeled as speculative and not aligned with Bitwise’s analysis [3]. Hougan’s focus remains on near-term dynamics, where the “demand shock” could amplify Ethereum’s price action as corporate and institutional buyers continue to absorb supply.

The trend aligns with broader institutional adoption of digital assets, as corporate treasury departments and hedge funds allocate resources to Ethereum for both hedging and growth purposes. These developments are compounded by Ethereum’s ongoing upgrades, which aim to enhance scalability and energy efficiency, further solidifying its appeal to institutional investors [2].

Bitwise’s analysis contrasts with bearish narratives that tie Ethereum’s price to Bitcoin’s performance or macroeconomic volatility. Hougan argues that Ethereum’s structural advantages—its role in DeFi, stablecoin ecosystems, and tokenization—position it to maintain momentum independently. However, the firm advises monitoring on-chain metrics and regulatory developments to assess whether this demand shift will translate into sustained price gains or face headwinds.

Source:

[1] [Ethereum Demand Shock Incoming? Bitwise Weighs In](https://api.news.bitcoin.com/wp-json/bcn/v1/post?slug=ethereum-demand-shock-incoming-bitwise-weighs-in)

[2] [Leap Digital Investments](https://leapdigitalinvestments.com.au/)

[3] [nequi.org](https://nequi.org/)