As the crypto market continues its upward trajectory – with total market capitalization briefly surpassing $3.8 trillion yesterday – institutional interest in Ethereum (ETH) has grown increasingly evident. A growing number of corporations are now accumulating ETH at an unprecedented pace.
Ethereum Demand Showing No Signs Of Exhaustion
According to an X post by crypto entrepreneur Kyle Reidhead, current demand for ETH has been “insane.” Specifically, ten Ethereum treasury firms have collectively accumulated more than 550,000 ETH – worth approximately $1.65 billion – over the past 30 days.
Reidhead emphasized that this momentum is accelerating, with no signs of slowing. He noted that new ETH treasury companies are launching every week, and the largest of these may not have entered the market yet.
Moreover, each of these companies is reportedly aiming to buy more ETH than they did the previous week. If this trend continues, ETH purchases could hit $2 billion in the next month, and potentially $3 billion the month after.
While this demand will inevitably taper off at some point, it appears unlikely to do so in the near term. In particular, stablecoin supply growth and favorable digital asset regulations could further encourage companies to add crypto to their balance sheets.
It’s worth noting that the week beginning July 14 marks “Crypto Week” in the US, during which three major digital asset bills are expected to face congressional votes. These bills focus on key issues like stablecoin regulation and the potential use of central bank digital currencies (CBDCs) in monetary policy.
ETH To Face Supply Shock?
Reidhead added that in the past 30 days, ETH treasury firms have bagged as much as 0.5% of the total circulating ETH supply. These firms have also moved ETH into Ethereum decentralized finance (DeFi) contracts through staking or lending.
The entrepreneur also drew a contrast between treasury buyers and Ethereum ETFs, stating that unlike ETFs, these treasury firms do not sell. Instead, they appear committed to accumulating and holding ETH long-term. He remarked:
This is going to create a supply shock for ETH over the coming months, there’s really no way around it. Fade ETH and the treasury companies at your own caution.
Supporting this thesis, data from SoSoValue shows that spot ETH ETFs have enjoyed nine consecutive weeks of positive inflows, with $907 million added in the week ending July 11. As of July 15, spot ETH ETFs have already received $259 million in fresh inflows.
Another data point that strengthens the argument for a looming ETH supply shock is the rapidly depleting exchange reserves. That said, some caution is warranted. At press time, ETH trades at $3,018, down 0.9% in the past 24 hours.
Featured image from Unsplash.com, charts from SoSoValue and TradingView.com
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