Ether's Price Poised for Growth Amid Institutional Demand

According to Cointelegraph, the price of Ether is expected to rise significantly due to increasing institutional demand and a substantial portion of its supply being out of circulation. Analyst 'Crypto Gucci' highlighted that Ethereum is currently experiencing a unique market cycle with multiple supply vacuums simultaneously active. This situation is unprecedented, as digital asset treasuries (DATs) did not exist in previous cycles. Over recent months, DATs have accumulated approximately 5.9 million ETH, valued at around $24 billion, which represents 4.9% of the total supply, as reported by StrategicEthReserve. These entities are anticipated to hold the asset for long-term returns. Spot Ether exchange-traded funds (ETFs) have also been acquiring ETH at record rates this year. U.S.-based ETFs have amassed 6.84 million Ether, worth $28 billion, accounting for 5.6% of the total supply, despite the absence of staking approval. Additionally, staking, which was in its early stages during the last market cycle, now involves 35.7 million ETH, valued at approximately $146 billion, representing nearly 30% of the entire supply. Most of this staked Ether is illiquid due to a 40-day exit queue. Crypto Gucci emphasized that Ether has entered this cycle with unprecedented institutional demand and the smallest liquid float in its history, suggesting that when demand meets a shrinking supply, prices could surge dramatically. Entrepreneur Ted Pillows expressed optimism about Ether's future, predicting a potential rally to a fair value of $8,000 to $10,000 this cycle, driven by institutional bidding and potential ETF staking approval. Despite a marginally inflationary supply, Ether's supply has only increased by 0.5% since the transition from proof-of-work to proof-of-stake in 2022, according to Ultrasound.Money. In contrast, Bitcoin's supply has grown by 4% over the same period. A potential fourth supply vacuum could emerge if nation-states begin stockpiling Ether for their strategic crypto reserves. Recently, the Kingdom of Bhutan announced its integration of the national ID system on the Ethereum blockchain, although it currently holds no ETH. Ryan Sean Adams from Bankless commented on Bhutan's move, stating that while it's promising for Ethereum's development, the platform must convert such initiatives into holding ETH as a store of value to fulfill its cypherpunk aspirations.