In a bold outlook that could reshape investor sentiment in the crypto space, Bitwise’s Chief Investment Officer Matt Hougan has predicted a looming demand shock for Ethereum, driven by rapidly accelerating institutional interest and newly launched Ethereum-based investment products.
According to Hougan, the Ethereum market is on the brink of a fundamental shift—one that could push demand far beyond the blockchain’s ability to supply new ether (ETH). At the heart of this phenomenon is a powerful mix of regulatory clarity, institutional momentum, and the growing appetite for tokenization and stablecoin infrastructure.
Ethereum Playing Catch-Up to Bitcoin
While Bitcoin has enjoyed a significant institutional inflow since the beginning of 2024—thanks to aggressive strategies by firms like MicroStrategy and the launch of multiple Bitcoin Exchange Traded Products (ETPs)—Ethereum had largely been absent from this narrative until recently. Hougan pointed out that over 1.5 million BTC have been acquired by institutions and ETPs since January 2024, reflecting a strong hunger for digital assets with limited supply.
Ethereum, however, didn’t benefit from such institutional activity—until May 2025. That’s when the narrative began to change.
$10 Billion Ethereum Bought in Just Over Two Months
The approval and launch of Ethereum ETPs and a sudden uptick in Ethereum Fund activity sparked a dramatic shift. Since May 15th, Hougan revealed, institutions and fund vehicles have purchased over 2.83 million ETH, valued at more than $10 billion based on current market prices.
That number is 32 times the amount of new ETH minted during the same time frame.
This aggressive accumulation has already removed a significant portion of liquid ETH from the open market, tightening supply dynamics and positioning Ethereum for a substantial price appreciation—especially if the trend continues, as Hougan expects.
A Potential 7:1 Demand-to-Supply Ratio
Looking ahead, Hougan projected that ETPs and Ethereum-focused institutional funds could purchase $20 billion worth of ETH over the next 12 months, or approximately 5.33 million ETH at current prices.
In stark contrast, Ethereum’s projected issuance over the same period is only 0.80 million ETH.
This creates an alarming imbalance: demand outpacing supply at a ratio of 7:1—a classic setup for what Hougan describes as a “demand shock.”
“In the short term, prices for any asset are determined by supply and demand. And right now, demand for ETH is significantly outstripping new supply,” Hougan emphasized.
Why This Time Is Different
Hougan also highlighted another key variable: allocation discrepancy. He noted that investors currently hold a significantly smaller portion of ETH compared to BTC in their portfolios. As regulatory and infrastructure developments make Ethereum more accessible, there’s strong potential for portfolio rebalancing—leading to further ETH inflows.
Additionally, the broader narrative around tokenization of real-world assets, Ethereum as settlement infrastructure, and stablecoins is increasingly Ethereum-centric. As enterprises and governments look to tokenize assets on secure and programmable blockchains, Ethereum’s first-mover advantage in decentralized finance (DeFi) and smart contracts puts it in a prime position.
Conclusion: A Perfect Storm for Ethereum?
If Bitwise’s forecast proves accurate, the Ethereum ecosystem may be heading toward one of its most significant inflection points yet. With institutional appetite rising and ETPs absorbing ETH faster than it can be created, market forces could soon trigger a substantial price surge—if not a full-blown supply crisis.
For now, all eyes remain on how quickly institutional capital continues to flow and whether Ethereum’s infrastructure can scale to meet the demands of a new wave of investors. If Hougan is right, 2025 may mark the beginning of Ethereum’s next major bull cycle—fueled not by hype, but by pure supply and demand economics.
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