Analysis: Ethereum rise driven by surge in structural demand

On July 23, Bitwise Chief Investment Officer Matt Hougan stated in an internal memo on July 22 that Ethereum is experiencing a "demand shock." Since May 15, ETFs and newly established corporate treasuries have purchased approximately 2.83 million ETH, with a market capitalization of about $10 billion—approximately 32 times the output of the Ethereum network during that period. This supply-demand gap may continue to widen. Hougan noted that Ethereum has risen over 65% in the past month, with an increase of over 160% since April. He believes this is primarily driven by supply-demand imbalance rather than changes in market sentiment. Hougan compared this situation to Bitcoin's market in 2024. Since the launch of the U.S. spot Bitcoin ETF in January 2024, Wall Street funds, publicly listed companies (such as Strategy and Trump Media), and even some national governments have collectively purchased over 1.5 million BTC, while only about 300,000 BTC were mined during the same period, resulting in a 5-fold excess demand. Hougan stated that this fivefold demand advantage has driven Bitcoin's price up by 155%, making it the best-performing major asset during that time. "Demand is five times supply. Sometimes, it's really that simple," he wrote. However, he also pointed out that Ethereum did not initially enjoy similar benefits. In the first 10 months since the launch of the ETH ETF in July 2024, only about 660,000 ETH were purchased by the ETH ETF, with inflows of about $2.5 billion; during the same period, publicly listed companies hardly made any purchases, and the total issuance of ETH was 543,000. As a result, Ethereum's performance lagged behind that of Bitcoin for a time.