Over 40% Of Ether Locked In Unprecedented Supply Squeeze
Approximately 40% of Ether is now out of circulation due to record institutional demand and new forms of long-term holding. Digital asset treasuries, a market force absent in previous cycles, currently hold 5.9 million ETH (4.9% of supply), while US-based spot Ether ETFs possess 6.84 million ETH (5.6%). Additionally, 35.7 million ETH (nearly 30% of supply) is staked, much of it illiquid due to lengthy withdrawal queues. This confluence of supply constraints is unprecedented for Ether. With institutional buying and the potential for ETF staking approval, analysts predict strong price rallies, estimating Ether could reach $8,000–$10,000 this cycle. Since Ethereum’s transition to proof-of-stake, supply has only expanded by 0.5%, compared to Bitcoin’s 4% over the same period. If nation-states begin accumulating ETH for reserves, a potential fourth supply vacuum could emerge. Recent developments include Bhutan integrating its national ID system with Ethereum, though it does not yet hold ETH as a reserve asset.
