Written by: Matt Hougan, Chief Investment Officer of Bitwise

Translated by: Shaw Golden Finance

The price of Ethereum has been rising recently. Here are the reasons why its price may continue to increase.

The price of Ethereum has risen over 65% in the past month, and since April, it has increased by more than 160%. However, I believe it will continue to rise in the coming months for a simple reason: supply and demand.

Let me explain.

The Asymmetry of Bitcoin

The bullish case for Bitcoin is straightforward: since the launch of spot Bitcoin exchange-traded products (ETPs) in the U.S. in January 2024, there has been a structural imbalance between demand and supply.

What kind of imbalance is this? ETPs, corporations, and governments have purchased over 1.5 million Bitcoins, while the Bitcoin blockchain has only generated about 300,000 Bitcoins during the same period. Since then, the price of Bitcoin has risen by 155%, making it the best-performing major asset globally during this time.

Demand is five times greater than supply. Sometimes, things really are 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 ETPs, these ETPs had only purchased 660,000 ETH, with inflows of about $2.5 billion. Meanwhile, the purchases by publicly listed companies were negligible. During the same period, the Ethereum network generated 543,000 new ETH, essentially flat.

Not surprisingly, the price of Ethereum lagged far behind Bitcoin.

Price Returns: Bitcoin vs. Ethereum

Data Source: Bitwise Asset Management, data range from December 31, 2023, to July 20, 2025

But the situation changed in mid-May. Since May 15, the Ethereum spot ETP market has skyrocketed, attracting over $5 billion in funds. Corporations have also joined in, with several companies announcing new Ethereum treasury reserve management strategies. For example:

• Bitmine Immersion Technologies (BMNR) began purchasing ETH at the end of June and currently holds 300,657 ETH (worth $1.13 billion). The company announced its long-term goal is to acquire 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 purchase more ETH.
• Bit Digital (BTBT) raised $170 million and sold its Bitcoin position to fund the purchase of 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 summary, since mid-May, ETPs and publicly listed companies have purchased 2.83 million ETH, amounting to over $10 billion at current prices, which is 32 times the increase in ETH supply during the same period.

No wonder the price of ETH has surged.

Will This Situation Continue?

The next question to ask is: will this situation continue?

We believe the answer is yes.

Investors' allocation between Ethereum and Bitcoin remains unbalanced: although Ethereum's market cap is about 20% of Bitcoin's, the assets accumulated in Ethereum ETPs are less than 12% of those in Bitcoin ETPs. Given the various trends surrounding stablecoins and tokenization (primarily built on Ethereum), we believe this situation will change, with billions of dollars flowing in over the next few months.

Meanwhile, all signs indicate that the trend of "ETH treasury reserve companies" will accelerate. The key to the growth of cryptocurrency treasury companies lies in whether their publicly traded stock prices exceed the value of their held cryptocurrency assets, and currently, this is the case for Ethereum treasury companies. For example, the stock prices of BMNR and SBET are nearly double the value of their Ethereum assets. As long as this situation continues, it is certain that Wall Street firms will invest more funds to purchase ETH.

Looking ahead, if ETPs and ETH treasury reserve management companies purchase $20 billion worth of ETH over the next year, at current prices, that would equate to 5.33 million ETH, which would not surprise us. Meanwhile, the Ethereum network is expected to generate about 800,000 new ETH during the same period. This means demand is nearly seven times the new supply, a ratio even higher than what Bitcoin has shown since the launch of spot ETPs in 2024.

You might say that Ethereum is different from Bitcoin, that its price is not purely determined by supply and demand, and that it does not have a long-term issuance cap like Bitcoin. In absolute terms, this is true, but it does not matter at the moment.

In the short term, the price of everything is determined by supply and demand, and currently, the demand for ETH exceeds the supply. Therefore, I believe its price will continue to rise.

Sometimes, things really are that simple.

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