Institutional Siphoning of Ethereum Supply – Price Rebound on Horizon?

Ethereum’s circulating supply on exchanges has contracted to its lowest level in three years, raising questions about the potential for a price rebound amid growing institutional and whale-driven demand. As of September 6, 2025, centralized exchanges hold approximately 17.4 million ETH, a decline of nearly 10.7 million tokens since September 2022Ethereum (ETH) Price: Whale Accumulation Resumes as Reserves Hit 3-Year Low^[1]. This reduction is attributed to a combination of spot Ethereum ETF inflows and corporate treasury accumulation, which have siphoned supply from trading platforms. Over the past three months alone, 2.5 million ETH has exited exchanges, marking a 38% drop from the 2022 peak of 28.8 million ETHEthereum (ETH) Price: Whale Accumulation Resumes as Reserves Hit 3-Year Low^[1].

Spot Ethereum ETFs have emerged as a primary driver of this supply contraction. Since their July 2024 launch, these products have attracted over $13 billion in net inflows, with BlackRock’s iShares Ethereum ETF leading the charge. The fund alone has amassed $16 billion in assets under management, becoming one of the fastest-growing ETFs in historyEthereum (ETH) Price: Whale Accumulation Resumes as Reserves Hit 3-Year Low^[1]. July 2025 saw a particularly strong inflow of $5.4 billion, with total net inflows across all spot ETH ETFs surpassing $10 billion between June and AugustEthereum (ETH) Price: Whale Accumulation Resumes as Reserves Hit 3-Year Low^[1].

Corporate treasuries have also contributed to the supply drain, with 17 publicly traded companies now holding more than 3.6 million ETH collectivelyEthereum (ETH) Price: Whale Accumulation Resumes as Reserves Hit 3-Year Low^[1]. SharpLink Gaming, for instance, has accumulated 797,704 ETH through a $425 million private placement, while BitMine Immersion Technologies holds 1.86 million ETH—1.5% of Ethereum’s total supplyEthereum (ETH) Price: Whale Accumulation Resumes as Reserves Hit 3-Year Low^[1]. These entities cite staking rewards as a key incentive, as Ethereum’s proof-of-stake model allows holders to earn yields, unlike Bitcoin. As of September 3, 2025, 860,369 ETH (worth $3.7 billion) was queued for staking, the highest level since 2023Ethereum (ETH) Price: Whale Accumulation Resumes as Reserves Hit 3-Year Low^[1].

Whale accumulation has resumed after weeks of distribution, with large holders (1,000–10,000 ETH) adding 411,000 ETH in the past monthEthereum (ETH) Price: Whale Accumulation Resumes as Reserves Hit 3-Year Low^[1]. Mega whales (10,000+ ETH) previously drove significant inflows in August, though their activity has paused. Meanwhile, smaller whale categories (1,000–10,000 ETH) have returned to buying, signaling renewed confidence in Ethereum’s long-term prospectsEthereum (ETH) Price: Whale Accumulation Resumes as Reserves Hit 3-Year Low^[1]. Technical indicators support this optimism: ETH trades at $4,439.08, up 1.52% in 24 hours, with the Relative Strength Index at 52.74 and a bullish MACD crossoverEthereum (ETH) Price: Whale Accumulation Resumes as Reserves Hit 3-Year Low^[1].

Analysts suggest the supply dynamics could catalyze further price gains if institutional demand persists. Data scientist Hildobby projects that Ethereum ETFs may surpass Bitcoin ETFs in terms of circulating supply held by early September 2025, with Ethereum ETFs currently controlling 5.08% of the token’s supply compared to Bitcoin ETFs’ 6.38%. This trajectory reflects Ethereum’s faster accumulation rate—ETF holdings grew from 3.5 million ETH in February 2025 to 6.5 million ETH by August. Meanwhile, BlackRock’s recent strategic shift, including a $156 million ETH purchase exceeding its $125 million BTC acquisition, underscores institutional preference for Ethereum.

The convergence of shrinking exchange reserves, robust ETF inflows, and whale accumulation paints a bullish narrative for Ethereum. However, price confirmation above $4,800 remains critical to unlocking a potential $5,200–$5,500 targetEthereum Reserves Hit Record Lows—Supply Crunch Brews Amid Whale Accumulation^[4]. With macroeconomic factors, including anticipated Fed rate cuts, adding to the momentum, Ethereum’s market dynamics suggest a reacceleration in adoption.