By Matt Hougan , Chief Investment Officer at BitWise
Compiled by: Tim, PANews
This article will analyze why the price of ETH has risen and why it will continue to rise in the coming months.
Ethereum is experiencing explosive growth. After falling for the first four months of this year, it has now rebounded strongly. It has risen by more than 50% in the past month and has soared nearly 150% since its low in April.
Why? The demand for ETFs and public companies is huge.
Additional background:
The continued rise in Bitcoin prices over the past 18 months stems from a simple fact: the amount of new Bitcoin purchased by ETPs and corporate funds has exceeded the total new supply of Bitcoin during the same period.
Let's look at a set of data comparisons: Since the listing of Bitcoin ETPs in January 2024, listed company treasuries and ETP institutions have purchased a total of 1.5 million Bitcoins, while the number of new Bitcoins produced by mining on the entire network during the same period was only 300,000.
Demand is five times the supply. Sometimes it's just that simple: supply imbalance.
Until recently, Ethereum has not enjoyed the same market heat. Ethereum ETP was launched in July 2024, but the market was initially cold. As of May 15, 2025, Ethereum ETP has only purchased 660,000 ETH (corresponding to approximately $2.5 billion in capital inflows).
At the same time, there is no iconic large Ethereum reserve company at all.
Ethereum issued a net increase of 543,000 ETH during this period, which is basically in line with market demand. No wonder the price of ETH is moving sideways (and downward)!
But a turning point occurred in mid-May. Since May 15, Ethereum spot ETP has continued to be popular, attracting more than $5 billion in funds. Companies have also entered the market, and companies such as Bitmine and SharpLink have announced that they will include Ethereum in their corporate treasury allocations.
According to our estimates, ETPs and corporate treasuries have purchased a total of 2.83 million ETH (worth over $10 billion at current prices) since May 15, which is 32 times the net new supply of ETH during the same period.
No wonder the price of Ethereum has skyrocketed!
The right question to ask at this point is: Will this continue? I think the answer is yes.
ETP investors' allocation to Ethereum is still significantly lower than that to Bitcoin: although ETH's market capitalization is approximately 19% of BTC, the total size of Ethereum ETP is less than 12% of Bitcoin ETP.
As market interest in stablecoins and tokenization surges, we expect inflows into Ethereum ETPs to remain strong over the long term.
At the same time, there are signs that the trend of "ETH Treasury companies" will accelerate. The reason for this is whether the stock market value of these companies is higher than the value of the crypto assets they hold, and currently ETH Treasury companies do have this premium.
Full speed ahead!
Looking ahead, I expect ETPs and asset managers to purchase $20 billion worth of Ethereum next year, which is approximately 5.33 million ETH at today's price, while the Ethereum network is expected to produce approximately 800,000 ETH during the same period.
ETH is obviously different from BTC in that its price is not determined solely by supply and demand, nor does it have the fixed mining limit of Bitcoin. But at present, this is not important.
In the short term, the price of any commodity is determined by supply and demand, and the current market demand for ETH has significantly exceeded the new supply.
All in all, I think we will continue to rise.
