According to an analyst, the price of Ethereum can only rise, as 40% of Ethereum has already exited circulation, while institutional demand has reached record levels.
"Ethereum has never experienced three supply vacuums simultaneously active in a market cycle," analyst 'Crypto Gucci' stated on Tuesday.
Crypto Gucci pointed out that the Digital Asset Treasury (DAT) did not exist in the last market cycle. According to StrategicEthReserve data, over the past few months, DAT has accumulated 5.9 million ETH, worth approximately $24 billion, which is equivalent to 4.9% of the total supply.
These entities will hold the asset long-term for returns.
Spot Ethereum exchange-traded funds (ETFs) also did not exist in the last cycle.
As of today, U.S. ETFs have acquired 6.84 million Ethereum, worth $28 billion, which is equivalent to 5.6% of the total supply, although staking has not yet been approved.
Finally, while staking was still in its infancy during the last market cycle, today, 35.7 million ETH have been staked, worth approximately $146 billion, accounting for nearly 30% of the total supply. Due to the length of the exit queue, most of this liquidity is currently insufficient, with the exit queue at 40 days.
Crypto Gucci stated that institutional demand is at a record high as Ethereum enters this cycle, with liquidity floating supply at a historical minimum.
"With institutional bidding and [ETF] staking approval, I believe ETH will rebound strongly," entrepreneur Ted Pillows said earlier this week. He predicts a fair value for this cycle of $8,000 to $10,000.
According to Ultrasound.Money data, Ethereum's supply is currently slightly inflationary, but has only increased by 0.5% since the 2022 merge (transitioning from proof-of-work to proof-of-stake).
In contrast, Bitcoin (BTC) supply has increased by 4% during the same period.
Another potential factor that could create a fourth supply vacuum is if nations begin to hoard Ethereum for their crypto strategies.
This week, the Kingdom of Bhutan announced plans to build on Ethereum by integrating its national identity system onto the blockchain. However, it currently does not hold any ETH.
"Building on Ethereum is great for Bhutan," said Ryan Sean Adams from Bankless. "But if Ethereum cannot convert building on Ethereum into holding ETH as a store of value, it will never achieve its cypherpunk dreams," he added.
Related: Analyst says "Uptober" is still expected to materialize after last week's major liquidation event
Original article: “Analyst: Three Major 'Supply Vacuums' Active Simultaneously, Ethereum (ETH) May Experience 'Nuclear' Surge”
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