Corporations are snapping up Ethereum (ETH) like crazy, and it’s causing a stir in the crypto world.
Insane Demand for ETH
The demand for ETH is through the roof. Ten companies alone have bought over 550,000 ETH (around $1.65 billion!) in just the last month. And it’s not slowing down – new companies are joining the party every week, each aiming to buy even more than the last. This could easily lead to $2 billion in purchases next month, and maybe even $3 billion the month after!
While this buying spree won’t last forever, it’s expected to continue for a while. Things like the growth of stablecoins and positive changes in crypto regulations are encouraging companies to add crypto to their holdings. This is all happening during a key week for US crypto legislation, which could further boost the market.
ETH Supply Shock?
These companies have already bought 0.5% of all the ETH in circulation in just one month! They’re also locking up their ETH in DeFi contracts through staking and lending, meaning it’s not readily available for trading. Unlike ETFs which can buy and sell, these companies are holding onto their ETH for the long term. This is likely to create a significant shortage of ETH in the coming months.
This is backed up by data showing huge inflows into ETH ETFs (over $900 million in one week alone!) and falling ETH reserves on exchanges.
A Word of Caution
While the situation looks bullish, it’s important to remember that ETH’s price is volatile. At the time of writing, it’s slightly down. So, while the corporate buying spree is impressive, it’s wise to proceed with caution.