Ethereum (ETH) Price Surge Fueled by Demand Shock
Ethereum is experiencing a significant price surge driven by a demand shock, with institutional and corporate buying far exceeding the issuance of new ETH. This imbalance is a key factor in Ethereum's recent outperformance relative to Bitcoin.
Key Takeaways
- Demand Shock: Institutional and treasury firms are buying more ETH than is being issued, driving prices higher.
- ETH Outpaces Bitcoin: The ETH/BTC ratio has climbed from 0.018 to 0.031, while Bitcoin dominance has slipped from 66% to 61%.
Since mid-May, over $10 billion in ETH has been purchased by ETPs and corporations, representing 32 times the amount of new ETH issued during the same period.
The second-largest crypto asset has significantly outperformed Bitcoin over the past three months, gaining more than 105% since mid-May, while Bitcoin has risen just 23%. That stretch marked the bottom of the ETH/BTC ratio at 0.018, which has since climbed to 0.031.
This shift has also pushed Bitcoin’s dominance down from 66% to 61%, reflecting growing momentum behind Ethereum. Over the past seven days, Bitcoin has gained just 2% to trade near $120K, while Ethereum has surged 24% to $3,700, further highlighting ETH’s continued outperformance.
Institutional inflows are a major catalyst. Corporate buyers, including Bitmine Immersion Technologies, SharpLink Gaming, Bit Digital, and Ether Machine, have collectively acquired more than 2.8 million ETH, while Ethereum ETPs have attracted over $5 billion in new flows since May.
Projections indicate that ETPs and public companies could purchase up to 5.3 million ETH over the next year, compared to an expected issuance of just 0.8 million ETH.
ETH treasury companies are trading at premiums relative to their holdings, while Ethereum ETPs still lag behind Bitcoin ETPs in total assets.
Disclaimer: Codeum provides smart contract audits, KYC verification, and custom blockchain development. Consult with financial experts before making investment decisions.