Author: Matt Hougan, Chief Investment Officer of Bitwise; Translated by: Shaw, Jinse Finance
Ethereum's price has been rising recently. Here are the reasons why its price may continue to rise.
Ethereum's price has increased by over 65% in the past month and by more than 160% since April. However, I believe it will continue to rise in the coming months, and the reason is simple: supply and demand.
Let me explain.
Bitcoin's Asymmetry
The bullish case for Bitcoin is straightforward: since the launch of spot Bitcoin exchange-traded products (ETPs) in the US in January 2024, there has been a structural imbalance between demand and supply.
What kind of imbalance? ETPs, enterprises, and governments have purchased over 1.5 million bitcoins, while the Bitcoin blockchain has only generated around 300,000 bitcoins during the same period. Since then, Bitcoin's price has risen by 155%, making it the best-performing major asset during this time.
Demand is five times the supply. Sometimes, things are just that simple.
What About Ethereum?
Until recently, Ethereum had not benefited from the same trend.
As of May 15, 2025, about 10 months after the launch of Ethereum exchange-traded products (ETPs), these ETPs have only purchased 660,000 ETH, with capital inflows of around $2.5 billion. Meanwhile, corporate purchases were negligible. During the same period, the Ethereum network generated 543,000 new ETH, essentially breaking even.
Unsurprisingly, Ethereum's price lagged far behind Bitcoin.
Price Returns: Bitcoin vs. Ethereum
Source: Bitwise Asset Management, data range from December 31, 2023, to July 20, 2025
But things changed in mid-May. Since May 15, the Ethereum spot ETP market has soared, attracting over $5 billion in funds. Enterprises have also joined in, with many companies announcing new Ethereum treasury reserve management strategies. For example:
Bitmine Immersion Technologies (BMNR) began purchasing ETH in late June and currently holds 300,657 ETH (worth $1.13 billion). The company has announced a long-term goal of acquiring 5% of the total ETH supply.
SharpLink Gaming (SBET) started acquiring ETH in July and currently holds 280,706 ETH (worth $1.06 billion). The company plans to refinance $6 billion to buy more ETH.
Bit Digital (BTBT) raised $170 million and sold its Bitcoin position to acquire over 100,000 ETH (worth over $375 million).
Ether Machine (DYNX) announced plans to go public, holding ETH reserves worth $1.6 billion, with goals beyond that.
In total, since mid-May, ETPs and public companies have purchased 2.83 million ETH, worth over $10 billion at current prices, which is 32 times the increase in ETH supply during the same period.
No wonder ETH's price has skyrocketed.
Will This Continue?
The right question to ask is: Will this continue?
We believe the answer is yes.
Investors' investment ratio in Ethereum and Bitcoin remains imbalanced: although Ethereum's market cap is about 20% of Bitcoin's, the assets accumulated by Ethereum ETPs are less than 12% of Bitcoin ETPs. Given the hype around stablecoins and tokenization (primarily built on Ethereum), we believe this will change, with billions of dollars flowing in over the next few months.
Meanwhile, there are signs that the trend of "ETH treasury reserve companies" will accelerate. The key to the growth of crypto treasury companies is whether their publicly traded stock prices are higher than the value of their crypto assets, which is currently the case for Ethereum treasury companies. For example, BMNR and SBET's stock prices are almost twice the value of their Ethereum assets. As long as this continues, it's certain that Wall Street companies will invest more in ETH.
Looking ahead, we wouldn't be surprised if ETPs and ETH treasury reserve management companies purchase $20 billion worth of ETH in the next year, which at current prices is equivalent to 5.33 million ETH. Meanwhile, the Ethereum network is expected to generate around 800,000 new ETH during the same period. This means demand is almost 7 times the new supply, which is even higher than the ratio Bitcoin has shown since the launch of spot ETPs in 2024.
You might say Ethereum is different from Bitcoin, that its price is not purely determined by supply and demand, and that it doesn't have a long-term issuance cap like Bitcoin. In absolute terms, this is true, but right now, this doesn't matter.
In the short term, the price of everything is determined by supply and demand, and currently, ETH's demand exceeds supply. Therefore, I believe its price will continue to rise.
Sometimes, things are just that simple.
