Urhere in the price of Ethereum is due to institutional purchases, says Bitwise

The cio of Bitwise ensures that the recent rebound of Ethereum is due to a “Demand overload”promoted mostly by institutional investors.

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• Companies and funds have acquired Eth for more than USD $ 10,000 million since May.
  
• The flow to investment products based on Ethereum could continue to increase, according to Bitwise.
  
• Analysts warn about volatility in the midst of bullish feeling.

Ethereum He has experienced a strong price rebound during the last weeks, and according to the Investment Director of Bitwise, Matt Hougan, the main reason is in a growing institutional demand.

In an X publication, Hougan argued that both products quoted in the stock market (ETPs) and corporate treasury have been accumulating Eth At a dizzying pace since mid -May. According to your data, more than 2.83 million Eth They have been bought in that period, equivalent to more than USD $ 10,000 million, a figure that represents 32 times the number of tokens issued in that same period.

A “Demand shock” in development

Hougan described this phenomenon as the beginning of a “Classic demand shock.” He indicated that the Cash ETPS Ethereum They have been responsible for more than USD $ 5,000 million of these purchases, and expects demand to intensify even more in the coming months.

In particular, he compared the current ETPS purchase volume of Eth with that of the products of Bitcoin, pointing out that the former have only accumulated about 12 % of the total volume that the ETPs of BTC

According to your projections, The market could see an additional income of USD $ 20,000 million in institutional purchases of Eth In the next 12 months, which would be equivalent to 5.33 million tokens at current prices.

At the same time, the projected issuance of Eth During that period it is only 800,000 units. This would establish a relationship of 7 to 1 between demand and supply, a dynamic that could press the prices of the digital asset.

Key differences with Bitcoin

Despite his enthusiasm, Hougan also clarified that Ethereum It is not the same as Bitcoin. While BTC has a strictly limited monetary policy, the price of Eth It does not move solely due to supply and demand dynamics.

However, the executive of Bitwise He insisted that, at least for now, Ethereum It will continue up. “There is more demand than supply”he said. In addition, he stressed that the growth of the stablcoins and tokenized assets ecosystem could be an additional engine for this trend.

As traditional assets such as fiduciary actions and currencies migrate to the programmable network of Ethereum, The narrative of Eth as an essential financial infrastructure for the digital future.

Ethereum is recovered after a loose start of the year

Ethereum He has shown a notable recovery after a first half of the year marked by weakness. According to Hougan, the asset has risen more than 65 % in the last month and more than 160 % since its April minimum.

At the moment, Eth It shows a positive annual yield of 7.63 %. Although it has retreated 2 % in the last 24 hours, it recently reached a weekly maximum of USD $ 3,800. The correction after USD $ 3,600 has been interpreted by analysts as a minor pause within a broader upward cycle.

The analyst Dan Crypto compared the current moment with the March and November Rallies of 2024. According to him, the futures market still does not show signs of overheating, which suggests that any correction would be mild and short duration, review Cryptopolitan.

In addition, the expert said Ethereum He already touched back on this cycle, and that the forward path seems upward.

Volatility warnings

The rebound of Ethereum has also caused speculation about the beginning of a new “Altcoins season” Among social media users. However, some analysts have warned about possible sudden movements in the market.

The analysis firm Santiment He warned that cryptocurrency prices tend to rise with greater force when most do not expect it. “When the crowd begins to say that we are in ‘Altseason’, prepare for volatility”the firm wrote.

Santiment stressed that the recent performance of Ethereum It happened in a context of generalized skepticism, which historically precedes bullish movements.

Article written by a content editor. Edited by Angel Di Matteo / Diariobitcoin

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