Matt Hougan, Chief Investment Officer at Bitwise Asset Management, asserts that Ethereum (ETH) is experiencing a significant "demand shock" that will continue to drive its price upward in the coming months. His analysis, shared recently on social media, highlights a substantial imbalance between the influx of new capital into the cryptocurrency and its limited supply. The launch of spot Ethereum Exchange-Traded Funds (ETFs) on July 23, 2025, is a key factor in this escalating demand.
Hougan, a recognized expert in crypto and ETFs, outlined his bullish stance in a detailed thread, stating, > "The Ethereum Demand Shock. A thread on why ETH's price is rising and why it will continue to rise in the months ahead." He emphasized that the fundamental principle of supply and demand is currently heavily favoring ETH.
Since mid-May, spot Ethereum ETPs and corporate treasuries have collectively acquired approximately 2.83 million ETH, representing a buying pressure over 32 times the net new supply issued during the same period. This aggressive accumulation has created an estimated 7:1 demand-to-supply imbalance, significantly outpacing Ethereum's projected net issuance of around 800,000 ETH tokens. Hougan noted that the newly launched spot Ethereum ETFs alone have seen over $5 billion in net inflows.
Beyond institutional buying, Ethereum's inherent characteristics contribute to its demand. The network has maintained a near 0% inflation rate over the past year, ensuring a stable supply of 120 million ETH. Its foundational role in decentralized finance (DeFi), stablecoins, and tokenization further solidifies its utility and adoption, driving organic demand.
Hougan anticipates that this demand will lead to substantial price appreciation, forecasting that Ethereum could surge past $5,000. He projects potential inflows of $10 billion to $20 billion into Ethereum ETFs and related products in the coming months. While acknowledging that the initial weeks post-ETF launch might experience some volatility due to conversions from existing trusts like Grayscale Ethereum Trust (ETHE), the long-term outlook remains overwhelmingly positive.