Bitwise CIO Attributes Ethereum’s Surge to ‘Demand Shock’

The price of ETH has surged by 50% over the past month and more than 150% since its April lows. Bitwise’s Chief Investment Officer, Matt Hougan, attributed this trend to a ‘demand shock’ and predicted further growth for Ethereum.

The Ethereum Demand Shock

A thread on why ETH’s price is rising and why it will continue to rise in the months ahead.

🧵

— Matt Hougan (@Matt_Hougan) July 22, 2025

According to the expert, the key driver of Ethereum’s rally is the high demand from ETPs and corporate treasuries. Since mid-May, Ethereum-based exchange-traded products have attracted over $5 billion. Companies like Bitmine and SharpLink have acquired 2.83 million ETH worth $10 billion. During the same period, the network issued only 88,000 ETH. 

This has led to a sharp increase in the price of the second-largest cryptocurrency by market capitalization, which reached a yearly high of $3,848 on July 21. 

Hougan believes the trend will continue. He noted that ETP investors still undervalue Ethereum compared to Bitcoin. Shares of Bitmine and SharpLink trade at a premium to the value of their crypto assets, encouraging other players to emulate their strategy.

Companies that have yet to invest in Ethereum could support the asset’s growth. The expert suggested that in the coming year, they might purchase 5.33 million ETH (~$20 billion at the current rate).

“During the same period, the network is expected to issue about 800,000 ETH. This means that demand will exceed supply by approximately seven times. Ethereum, of course, differs from Bitcoin. The price of Ether is not solely determined by supply and demand, and its long-term issuance does not have a hard cap like digital gold. But right now, that doesn’t matter,” Hougan explained.

The Bitwise CIO emphasized that in the short term, Ethereum’s value will be driven by demand, which already exceeds supply.

ETH to Break $10,000 by Year-End

On July 22, BitMEX co-founder Arthur Hayes predicted that Ether’s price would rise to $10,000 by the end of 2025. He believes this will be supported by Donald Trump’s administration’s policy aimed at expanding lending to support key economic sectors.

Hayes emphasized that the “credit geyser” will increase the money supply and support asset price growth, including cryptocurrencies. 

The expert also noted Trump’s positive stance towards digital assets. On July 19, the US president signed a stablecoin law. It was also reported that he is preparing to open the US pension market to cryptocurrency investments. 

Hayes noted that Western institutional investors’ attitude towards Ethereum has improved, which could contribute to its price increase.

“Since Solana rose from the ashes of the FTX collapse from $7 to $280, Ethereum has become the most undervalued high-cap cryptocurrency. But now everything is changing. Institutional investors in the West, led by Tom Lee, have fallen in love with Ethereum. They are buying now and will ask questions later,” wrote the BitMEX co-founder.

At the time of writing, ETH is trading at $3,667.

Back on July 21, Fundstrat researcher and Bitmine board chairman Tom Lee predicted Ethereum at $15,000. 

CryptoQuant contributor known as Crypto Dan expressed doubt about Ether being overheated, noting that any potential correction after the sharp rise would be “moderate and short-term.”