Ether Faces a “Supply Vacuum” as Institutional Demand Hits Record Levels: Analyst

Ether could be gearing up for a powerful rally as nearly 40% of its total supply is now locked out of circulation, according to market analyst Crypto Gucci. He believves that this dynamic could send prices soaring. 

The analyst noted that the second largest cryptocurrency is currently experiencing all three major “supply vacuums” simultaneously for the first time in its history. Crypto Gucci said on Tuesday, “When demand meets a shrinking supply like this, price doesn’t just go up, it goes nuclear.”

Three Powerful Forces Draining Supply

According to data from StrategicEthReserve, digital asset treasuries (DATs) have accumulated roughly 5.9 million ETH, worth around $24 billion, representing 4.9% of the total supply. These entities are designed for long-term holding, further reducing the amount of Ether available on the open market.

Meanwhile, U.S.-based spot Ether ETFs have purchased approximately 6.84 million ETH, valued at $28 billion or 5.6% of total supply—even before staking approval has been granted.

Finally, Ethereum’s staking ecosystem has grown dramatically since the network’s 2022 transition to proof-of-stake. Over 35.7 million ETH—roughly 30% of all circulating Ether—is now staked and largely illiquid, given that withdrawal requests face an exit queue of about 40 days.

Crypto Gucci said this combination of factors leaves Ethereum with “the smallest liquid float in its history,” and described it as a setup for a potential “price explosion.”

Experts Predict a Massive Ether Rally

Entrepreneur Ted Pillows echoed the bullish outlook earlier this week, stating that institutional accumulation and pending ETF staking approvals could trigger a powerful rally. 

“With institutional bidding and [ETF] staking approval, I think ETH will rally hard,” he said, adding that the fair value this cycle could reach between $8,000 and $10,000.

Since the Merge in 2022, Ethereum’s supply has risen only 0.5%, according to data from Ultrasound.Money, while Bitcoin’s supply has increased by about 4% over the same period. This further highlights ETH’s relative scarcity.

Nation-States Could Be the Next Buyers

Analysts believe that a fourth supply vacuum could emerge if nation-states begin accumulating Ether for their strategic reserves. This week, the Kingdom of Bhutan announced plans to build its national ID system on Ethereum, though it does not yet hold any ETH.

With institutional holdings at record highs, staking demand surging, and potential government interest on the horizon, analysts say Ethereum could be entering a new phase of scarcity—one that may set the stage for a historic price breakout.