Ethereum is becoming more popular not only with individual investors but also with corporations. In the last month, companies have quietly bought more than half a million ETH, which has led to talk of a possible supply shock. With more people buying ETFs and treasuries, it looks like demand for Ethereum is far from cooling off.
Institutional interest in Ethereum (ETH) has grown more apparent as the cryptocurrency market continues its upward trajectory, with the total market capitalization briefly surpassing $3.8 trillion yesterday.
Why are corporations suddenly so bullish on ETH?
ETH is currently being acquired by an increasing number of companies at a never-before-seen rate.
Crypto entrepreneur Kyle Reidhead claimed in an X post that the demand for ETH has been “insane” lately. In particular, over the last 30 days, ten Ethereum treasury companies have amassed more than 550,000 ETH, or roughly $1.65 billion.
Kyle Reidhead underlined that there are no indications that this momentum will slow down. He pointed out that the biggest ETH treasury firms might not have joined the market yet, and new ones are starting up every week.
According to reports, each of these businesses wants to purchase more ETH than they did the week before. Purchases of ETH might reach $2 billion in the upcoming month and possibly $3 billion the month after if this trend keeps up.
Although this demand will eventually decline, it doesn’t seem likely to do so anytime soon. Stablecoin supply expansion and supportive laws pertaining to digital assets, in particular, may further entice businesses to include cryptocurrency on their balance sheets.
How are ETFs and DeFi activity playing into the trend?
ETH treasury companies have acquired up to 0.5% of the entire supply of circulating ETH in the last 30 days. Through lending or staking, these companies have also transferred ETH into Ethereum decentralized finance (DeFi) contracts.
The entrepreneur contrasted Ethereum ETFs with treasury buyers, pointing out that the former do not sell, in contrast to the latter. Rather, they seem dedicated to long-term ETH accumulation and holding.
This argument is supported by data from SoSoValue, which indicates that spot ETH ETFs have seen positive inflows for nine weeks running, with $907 million added in the week ending July 11.
Spot ETH ETFs have already seen $259 million in new inflows as of July 15. The rapidly declining exchange reserves are another piece of evidence that supports the claim that an ETH supply shock is imminent.
What does this mean for Ethereum’s future supply?
Notably, the US observes “Crypto Week” the week of July 14 and three significant bills pertaining to digital assets are anticipated to be put to a vote by Congress during that time. Important topics covered by these bills include the regulation of stablecoins and the possible application of central bank digital currencies (CBDCs) to monetary policy.
The price of ETH is $3,018, which is down 0.9% from yesterday. But if the current rate of treasury and ETF accumulation keeps up, that number could change very quickly. There is one thing that is clear: Ethereum is becoming more and more popular with big-money investors, and the rest of the market may soon feel the effects.
Also read: Bitcoin & Coinbase Market Crash: Analysts Opinion on The Decline in The Market
