Hey there, crypto enthusiasts! If you've been keeping an eye on the market lately, you’ve probably noticed Ethereum (ETH) making some serious moves. On July 22, 2025, Matt Hougan, Chief Investment Officer at Bitwise, dropped a fascinating thread on X (@Matt_Hougan) explaining why ETH prices are surging and why this trend might continue. Let’s dive into this "Ethereum Demand Shock" and break it down in a way that’s easy to grasp—even if you’re new to the blockchain world!

What’s Driving the Ethereum Price Surge?

For the past month, ETH has jumped over 50%, and it’s up a whopping 150% since its April lows. So, what’s behind this rally? According to Hougan, it boils down to one key factor: overwhelming demand from Exchange-Traded Products (ETPs) and corporate treasuries. These are big players—think investment funds and companies—buying up ETH at a rate that’s outpacing the new supply.

To put this in perspective, Bitcoin (BTC) has seen a similar trend for the past 18 months. ETPs and corporate treasuries have been snapping up more than 100% of the new BTC produced, pushing its price higher. Now, Ethereum is catching up, and the numbers are staggering.

The Numbers Behind the Demand Shock

Since mid-May 2025, ETPs and corporate treasuries have bought an estimated 2.83 million ETH, worth over $10 billion at current prices. Meanwhile, the Ethereum network has only produced about 88,000 new ETH in the same period (thanks to its proof-of-stake system reducing issuance). That’s a demand-to-supply ratio of 32x! No wonder ETH prices are soaring!

Hougan points to a turning point around May 15, 2025, when Ethereum ETPs started pulling in over $5 billion. Companies like Bitmine and SharpLink have also jumped on the bandwagon, announcing Ethereum treasury strategies. Check out this chart from the thread to see the shift in action:

This image shows the daily net flow for Ethereum ETPs, with a clear spike after May 15, highlighting the surge in institutional interest.

Will This Trend Continue?

The big question is whether this demand will keep up. Hougan thinks it will, and here’s why:

• Underweight Ethereum Holdings: Ethereum ETPs hold less than 12% of the assets that Bitcoin ETPs do, even though ETH’s market cap is about 19% of BTC’s. This suggests there’s room for more investment.
• Growing Use Cases: The rise of stablecoins and tokenization (turning real-world assets into digital tokens) is driving demand for ETH, the backbone of the Ethereum blockchain.
• Ethereum Treasury Trend: Companies holding ETH in their treasuries are seeing their stock prices trade at a premium, encouraging more firms to join in.

Looking ahead, Hougan predicts ETPs and treasury companies could buy $20 billion worth of ETH (about 5.33 million ETH)​ in the next year, while the network will only issue around 0.80 million ETH. That’s a 7x demand-to-supply ratio, setting the stage for further price growth.

How Is This Different from Bitcoin?

Unlike Bitcoin, which has a fixed supply cap, Ethereum’s supply isn’t capped, and its price isn’t driven solely by supply and demand. Factors like network usage and staking rewards play a role. But in the short term, Hougan argues, supply and demand are king—and right now, demand is winning big for ETH.

What Does This Mean for You?

If you’re a blockchain practitioner or just a curious investor, this trend is worth watching. The Ethereum demand shock could signal a shift in how institutional money flows into crypto. However, it’s not all smooth sailing—volatility and smart contract risks (unique to Ethereum) could pose challenges, as noted in articles like OneSafe Blog’s take on Ethereum treasuries.

For the latest updates on meme tokens and broader crypto trends, keep checking meme-insider.com. We’re here to help you navigate this exciting space with a rich knowledge base and actionable insights!

So, what do you think—will ETH keep climbing? Drop your thoughts in the comments, and let’s discuss! 🚀