Analysis: Ethereum Surge Driven by Skyrocketing Structural Demand

July 23rd. Matt Hougan, the Chief Investment Officer of Bitwise, stated in an internal memo on July 22nd that Ethereum is currently facing a "demand shock." Since May 15th, ETFs and newly established corporate treasuries have purchased approximately 2.83 million ETH, with a total value of around $10 billion—32 times the output of the Ethereum network during this period. This supply-demand gap is likely to continue to widen. Hougan said that Ethereum has increased by more than 65% in the past month and more than 160% since April. He believes that this growth is mainly driven by a supply-demand imbalance rather than a change in market sentiment. Hougan compared this situation to the Bitcoin market in 2024. Since the launch of the US spot Bitcoin ETF in January 2024, Wall Street funds, publicly traded companies (such as Strategy and Trump Media), and even some national governments have collectively purchased more than 1.5 million BTC, while only about 300,000 BTC were mined during the same period, showing a fivefold 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 period. "Demand is five times supply. Sometimes things really are that simple," he wrote. However, he also pointed out that Ethereum did not initially have a similar advantage. In the first ten months since the ETF launch in July 2024, ETH ETFs purchased only about 660,000 ETH, with inflows totaling about $2.5 billion. During the same period, few publicly traded companies made purchases, and the total ETH supply was 543,000. Therefore, Ethereum's performance lagged behind Bitcoin at one point.