Ethereum’s liquid supply is vanishing.
After a year of feasting alone, exchange-traded funds now face competition from new Ethereum treasury firms hungry for their slice of an ever-shrinking pie.
Both groups combined have now acquired roughly 3.2% — worth almost $14 billion — of the cryptocurrency’s circulating supply since June 1, according to Geoff Kendrick, global head of digital assets research at Standard Chartered, the UK bank.
In a note to investors on Wednesday, he noted that treasuries have accelerated their accumulation in recent weeks.
As the buying spree picks up, exchanges are being drained of their available supply.
Major platforms now hold around 18.8 million Ether worth just under $70 billion, down from roughly 28 million in mid-2022, according to CryptoQuant data. It’s the lowest level seen since around 2016, when Ethereum was trading for less than $20.
Kendrick believes these treasury firms may now offer investors a more compelling way to gain exposure to Ethereum than spot ETFs.
Their market value is increasingly in line with the actual Ether they hold — a measure known as the NAV multiple. SharpLink, one of the most prominent Ethereum treasuries, saw its NAV multiple fall from over 2.5 in July to just above one, indicating a more grounded valuation.
That shift, Kendrick argues, makes these firms more investable.
“I see the ETH treasury companies as a better asset to buy than the US spot ETH ETFs,” he said, pointing to potential upside from staking rewards and flexible regulatory treatment.
2017 Bitcoin moment
Some analysts believe this could be Ethereum’s version of Bitcoin’s 2017 breakout.
Fundstrat’s Tom Lee described Ethereum as “Wall Street’s preferred chain” in a recent CNBC interview. He predicted the Ether price could rise as high as $30,000 — an almost tenfold increase — if the current cycle plays out.
And with Standard Chartered’s forecast suggesting treasuries could eventually control 10% of ETH’s supply, the scramble may still be in its early stages.
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