Bitwise points to demand imbalance as the driver of Ethereum's rise

• Ethereum has 2,83 million ETH purchased since May
• ETH rally driven by ETFs and corporate treasuries
• Bitwise projects additional $20 billion in ETH inflows

Ethereum has been experiencing a strong appreciation momentum fueled by growing structural demand, according to analysis by Bitwise. Since May 15, spot ETFs and corporate treasury strategies have accumulated approximately 2,83 million ETH—32 times the amount issued by the network in the same period.

Matt Hougan, Chief Investment Officer at Bitwise, stated in a memorandum recently reported that ether has appreciated more than 65% in the last month and has exceeded 160% since April. He believes this movement is a direct result of the imbalance between supply and demand, not just sentiment factors.

The executive compared this behavior to what happened with Bitcoin in 2024, when the launch of spot ETFs led funds, companies, and even governments to buy more than 1,5 million BTC, while the supply remained at just over 300 coins. "Five times more demand than supply. Sometimes it really is that simple," Hougan wrote.

Initially, Ethereum didn't keep up. About ten months after the launch of ETH ETFs, only 660 coins had been acquired by these funds, totaling inflows of nearly $2,5 billion, while the network's issuance reached 543 ETH.

The shift began in May, when ether investment products began raising over $5 billion. Companies like BitMine Immersion, SharpLink Gaming, Bit Digital, and The Ether Machine adopted ETH treasury policies, significantly contributing to the new level of demand.

Bitwise projects that ETFs and corporate treasuries could buy an additional 5,33 million ETH—about $20 billion—in the next twelve months, compared to an estimated issuance of only 800 ETH. This nearly 7-to-1 ratio should sustain the current upward movement, according to Hougan.

"In the short term, the price of everything is determined by supply and demand, and right now, there's more demand for ETH than supply," he wrote. The continued growth of stablecoins and tokenization could also accelerate this trend of capital migration to Ethereum.