Analysis of the Driving Forces Behind the Continued Rise in ETH Prices

Ethereum has performed remarkably well recently, experiencing a strong rebound after a continuous decline in the first four months of this year. In the past month, the price of ETH has risen over 50%, skyrocketing nearly 150% since the low in April. What is the main driving force behind this significant growth? The answer lies in the huge demand for exchange-traded products (ETP) and publicly listed companies.

Looking back over the past 18 months, the continuous rise in Bitcoin prices stems from a simple fact: the number of new Bitcoins purchased by ETPs and corporate funds has exceeded the total new supply of Bitcoins during the same period. Since the listing of Bitcoin ETPs in January 2024, listed companies and ETP institutions have cumulatively purchased 1.5 million Bitcoins, while the number of new Bitcoins mined across the network during the same period is only 300,000. This supply-demand imbalance is the fundamental reason for the price increase.

In contrast, Ethereum only began to enjoy similar market enthusiasm recently. The Ethereum ETP was launched in July 2024, but the initial market reaction was tepid. As of May 15, 2025, the Ethereum ETP had only purchased 660,000 ETH, corresponding to an inflow of about $2.5 billion. Meanwhile, there have been no significant large Ethereum reserve companies in the market. During this period, the net issuance of the Ethereum network increased by 543,000 ETH, roughly in line with market demand, which explains why the ETH price has shown a sideways or even downward trend.

However, mid-May became a turning point. Since May 15, Ethereum spot ETPs have continued to be hot, attracting over $5 billion in funding. The business community has also begun to actively participate, with several companies announcing that they will include Ethereum in their corporate treasury allocations. It is estimated that since May 15, ETPs and corporate treasuries have purchased a total of 2.83 million ETH, worth over $10 billion, which is equivalent to 32 times the new net supply of ETH during the same period. This huge demand and supply gap has directly driven the rapid rise in Ethereum prices.

Looking ahead, this trend is likely to continue. Currently, ETP investors' allocation to Ethereum is still significantly lower than that of Bitcoin: despite ETH's market capitalization being about 19% of BTC, the total size of Ethereum ETPs is not even 12% of Bitcoin ETPs. With the surge in market interest in stablecoins and tokenization, the inflow of funds into Ethereum ETPs is expected to remain strong in the long term.

At the same time, the development trend of "ETH Treasury Companies" may accelerate. This expectation is based on whether the market capitalization of these companies is higher than the value of the crypto assets they hold, and currently, there is indeed such a premium phenomenon for ETH Treasury Companies.

In the coming year, ETPs and asset management institutions are expected to purchase Ethereum worth $20 billion, which at current prices equates to approximately 5.33 million ETH, while the Ethereum network is expected to produce about 800,000 ETH during the same period. Despite the differences in supply mechanisms between ETH and BTC, in the short term, the price of any asset is determined by the relationship between supply and demand. Currently, the market demand for ETH has significantly exceeded the new supply, which means that the price of ETH is likely to continue to rise.