Institutional Demand Shock: Bitwise’s Matt Hougan Reveals Why ETH Is Skyrocketing

Ethereum's recent surge isn't just retail FOMO—it's Wall Street waking up.

The Institutional Lightning Bolt

Bitwise CIO Matt Hougan points to a demand shock as the hidden engine behind ETH's rally. Forget meme coins—this is big money moving in.

The Cynic's Corner

Of course, the same institutions that mocked crypto in 2022 are now scrambling to buy the dip. How very... predictable.

The CIO projects an additional $20 billion in institutional purchases over the next 12 months. This WOULD equate to 5.33 million ETH entering long-term holdings at current market prices. Meanwhile, Ethereum’s projected issuance over the same period is expected to be only 800,000 ETH, suggesting a potential 7-to-1 demand-to-supply ratio.

However, he acknowledged that ETH is not the same as Bitcoin, that the price is not driven primarily by demand and supply, and that it does not share ‘Bitcoin capped long term issuance’. Still, he noted that ETH will go higher for now as there is more demand for ETH than supply.

Meanwhile, Hougan added that growing momentum around stablecoins and tokenized assets will likely drive further ETH demand. He noted that as traditional assets such as stocks and fiat MOVE onto Ethereum’s programmable ledger, it strengthens the narrative of ETH as essential infrastructure.

Ethereum rebounding after early setback

Meanwhile, Ethereum is rapidly regaining momentum. In the post, Matt Hougan highlighted that ETH has surged more than 65 % over the past month and 160 % since April, marking a strong rebound from early‑year weakness.

With the gains, ETH is back in the green with 7.63% yearly gains. Although the asset is down 2% in the past 24 hours, it has reached its weekly peak of $3,800. However, many believe the price correction that has sent its price careening back to $3,600 is only a minor correction after the recent surge.

According to crypto analyst Dan Crypto, Ethereum is not overheated yet, and any correction in price will be minimal because its current rally compares to previous rallies in March 2024 and November 2024.

He said:

“Looking at a slightly bigger frame, compared to the overheating in the futures market in March 2024 and November 2024, the current level is way too small. Even if a correction comes, it’s likely to be shallow and short.”

The analyst further observed that the current Ethereum cycle has been sluggish despite being in an upcycle. He acknowledged that ETH has already reached what seems to be a bottom in this cycle. Therefore, the only way for ETH is for the price to go up.

Analysts warn of upcoming volatility

Meanwhile, the resurgence in ETH value has led to increasing sentiments about the incoming altcoin season within the crypto community. With several chatters on X (formerly Twitter) about the altcoins season, analysts have warned about potential market volatility.

According to Santiment analysts, crypto users should be prepared for volatility in the recent trends, adding that prices tend to increase mostly when the crowd does not expect it.

The firm wrote:

“When the crowd begins to perpetuate that we are in “altseason”, beware of some upcoming volatility. Crypto prices historically move up most prominently during periods of crowd disbelief.”

Interestingly, Ethereum’s recent performance came amidst crowd sentiment that “it is over.” Santiment noted that markets usually move in the opposite direction from retail expectations.

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