According to an analyst, Ether’s price may have only one direction—up—amid record institutional demand, with 40% of the cryptocurrency now out of circulation.
“Ethereum has never seen a market cycle with all three supply vacuums active simultaneously,” said analyst ‘Crypto Gucci’ on Tuesday.
Crypto Gucci highlighted that digital asset treasuries (DATs) didn’t exist in the previous market cycle. In recent months, DATs have accumulated a staggering 5.9 million ETH—worth roughly $24 billion—representing 4.9% of the total supply, according to StrategicEthReserve.
These treasuries are expected to hold the tokens long-term, aiming for sustained yields.
Spot Ether exchange-traded funds (ETFs) were also nonexistent in the previous market cycle.
Today, US-based ETFs have accumulated 6.84 million ETH—worth around $28 billion—representing 5.6% of the total supply, even though staking has not yet been approved.
Meanwhile, staking has grown significantly since its early days. Currently, 35.7 million ETH—valued at roughly $146 billion, or nearly 30% of the total supply—is staked. Much of this ETH is illiquid due to the 40-day exit queue.
“Ether has entered this cycle with record institutional demand and the smallest liquid float in its history,” said Crypto Gucci.
“When demand meets a shrinking supply like this, price doesn’t just go up, it goes nuclear.”
“With institutional demand and potential [ETF] staking approval, I expect ETH to rally strongly,” said entrepreneur Ted Pillows earlier this week, predicting a fair value of $8,000 to $10,000 during this cycle.
Currently, Ether’s supply is only slightly inflationary, having grown just 0.5% since the Merge in 2022, when Ethereum transitioned from proof-of-work to proof-of-stake, according to Ultrasound.Money. By comparison, Bitcoin’s supply has increased by 4% over the same period.
Nation-states next?
A potential fourth supply vacuum could emerge if nation-states begin stockpiling Ether for strategic crypto reserves.
This week, the Kingdom of Bhutan announced plans to build on Ethereum by integrating its national ID system with the blockchain, though it does not currently hold any ETH.
“It’s great that Bhutan is building on Ethereum,” said Ryan Sean Adams of Bankless. “But if Ethereum can’t convert development activity into actual ETH holdings as a store of value, it will never fulfill its cypherpunk ambitions.”
