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Ethereum Primed for Rally With 40% Supply Locked Up
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Oct 16, 2025
Analyst Crypto Gucci said Ethereum has nowhere to go but up, with 40% of the supply now out of circulation amid record institutional demand. Ethereum has never experienced a market cycle with all three supply vacuums active at once, creating unprecedented conditions for price appreciation.
Digital asset treasuries did not exist in the last market cycle but have now amassed 5.9 million Ethereum worth around $24 billion, equivalent to 4.9% of the total supply, according to StrategicEthReserve. These entities will hold the asset for long-term yields, removing substantial supply from active trading.
U.S.-based spot Ethereum exchange-traded funds have scooped up 6.84 million tokens worth $28 billion, equivalent to 5.6% of the total supply. This accumulation occurred despite staking not being approved for ETFs, suggesting even stronger demand potential once staking functionality becomes available.
Staking represents the largest supply vacuum, with 35.7 million Ethereum staked worth approximately $146 billion and accounting for almost 30% of the entire supply. Most of this is illiquid due to the length of the exit queue, which currently stands at 40 days for validators wanting to withdraw their tokens.
Crypto Gucci stated that Ethereum has entered this cycle with record institutional demand and the smallest liquid float in its history. When demand meets a shrinking supply like this, price does not just go up but goes nuclear, the analyst wrote on Tuesday.
Public companies tracked by Ark Investments are collectively holding over 12% of the total Ethereum supply. Among them is Tom Lee's Bitmine, which purchased $834 million worth of tokens earlier this week and now holds $12.52 billion in Ethereum, more than halfway toward its target of controlling 5% of total circulating supply.
Entrepreneur Ted Pillows predicted a fair value of $8,000 to $10,000 for Ethereum this cycle. He wrote that with institutional bidding and ETF staking approval, he thinks Ethereum will rally hard and catch up with the M2 supply in Q4.
The Ethereum supply is marginally inflationary at the moment but has only increased by 0.5% since the Merge in 2022, when it transitioned from proof-of-work to proof-of-stake, according to Ultrasound. Money. Compared to this, the Bitcoin supply has increased by 4% over the same period.
Another factor that could become a fourth supply vacuum would be if nation-states started stockpiling Ethereum for their crypto strategic reserves. This week, the Kingdom of Bhutan announced that it is building on Ethereum by integrating its national ID system on the blockchain, although it does not currently hold any Ethereum.
Source >> Ethereum Primed for Rally With 40% Supply Locked Up
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