ETH’s Epic Turning Point: Ten-Year Low in Exchange Supply + Wall Street Giants Open the Gates, Supercycle Poised for Takeoff

A nuclear-level data point has shattered the crypto market’s silence: Ethereum’s exchange supply has dropped below 9 million, marking a ten-year low since its inception in 2015. This is not the result of scattered retail adjustments, but a liquidity “drainage war” led by whales and institutions—massive amounts of ETH are being withdrawn from centralized exchanges and funneled into staking and long-term lock-up scenarios such as ecosystem applications, leaving the market’s immediately sellable “liquid supply” on the verge of exhaustion.
Meanwhile, a disruptive signal has emerged from Wall Street: Bank of America has officially announced that starting in 2026, over 15,000 of its wealth advisors can directly recommend Bitcoin and Ethereum ETFs to high-net-worth clients, even explicitly suggesting that 1%-4% of assets be allocated to crypto. This marks the opening of a compliant “expressway” for trillions in traditional finance to enter the crypto market, shifting institutionalization from trend to reality.
The extreme reversal on both supply and demand sides is rewriting Ethereum’s value logic. A long-awaited supercycle is now fully primed for eruption.
Supply Side: Scarcity Peaks as Exchange Supply Dries Up and Long-Term Lock-Ups Surge
The ongoing plunge in Ethereum’s exchange supply fundamentally reflects a shift in market consensus from “short-term speculation” to “long-term holding,” driven by three core factors that are further tightening supply.
First, institutional staking becomes mainstream. The 3%-4% stable annual yield from Ethereum’s PoS mechanism, combined with ecosystem appreciation potential, has upgraded ETH from a “speculative asset” to a “yield-bearing asset,” making it a new choice for institutional allocation. By mid-2025, staked ETH has exceeded 35.3 million, accounting for 29% of total supply. Coinbase alone holds $259.7 billion in staked ETH, and companies like BitMine are continuously increasing holdings, adding ETH to strategic reserves. The EIP-7251 protocol under the Pectra upgrade further raises the maximum validator stake per account from 32 ETH to 2048 ETH, dramatically lowering the cost for institutions to stake at scale and accelerating ETH lock-up.
Second, ecosystem lock-up absorbs massive liquidity. Beyond basic staking, the DeFi and restaking sectors, though reshuffled, still retain enormous locked value. The current total TVL for restaking protocols is around $22.4 billion, with EigenLayer accounting for over 63% of the market share. Liquid staking platforms like Lido and Rocket Pool, as well as DeFi protocols such as Uniswap and Aave, continue to absorb market liquidity, removing ETH from the “tradeable pool” and integrating it into the ecosystem cycle. At the same time, active addresses on ETH have grown 22% in the past 30 days, and gas consumption is up 18% year-over-year—forming a positive loop between asset lock-up and ecosystem activity, further reducing sell pressure.
Third, long-term holders are doubling down. Despite short-term volatility and even periodic long-term holder sell-offs, the overall trend shows investors accelerating withdrawals from centralized exchanges to self-custody in decentralized wallets, both to avoid platform risk and to bet on long-term value. In the past seven weeks, exchange ETH balances have plunged 16.4%. This “off-market lock-up” confirms market confidence in Ethereum’s long-term potential, further tightening the supply of tradable tokens.
Demand Side: Wall Street Opens the Floodgates + Regulatory Clarity, Trillions Queue Up
If supply shrinkage boosts “scarcity,” then demand-side explosion is “inflow ignition.” Bank of America’s move is not isolated—it’s a microcosm of traditional finance giants collectively allocating to crypto, signaling that compliant demand for Ethereum is now fully unleashed.
On one hand, top financial institutions are relaxing allocation limits. Alongside Bank of America, Morgan Stanley recommends 2%-4% in crypto, Fidelity suggests 2%-5% (up to 7.5% for younger investors), and asset management giants like BlackRock and Vanguard are opening up crypto ETF trading. Wall Street’s stance on crypto has shifted from “cautious observation” to “proactive recommendation.” The perfection of compliant tools is clearing barriers for traditional funds to enter. The launch of spot Ethereum ETFs provides regulated yield exposure, attracting vast capital from corporate treasuries and high-net-worth clients. Tokenized funds like those from Amundi are deeply integrating traditional finance with the crypto ecosystem and are expected to attract billions in new capital.
On the other hand, clear regulations are cementing the compliance foundation. The US SEC’s recognition of Ethereum as non-security, and frameworks like the “GENIUS Act,” provide assurance for Ethereum’s compliant growth and lower institutional entry friction. Against this backdrop, Ethereum has become the core platform for stablecoin issuance and tokenization of real-world assets. Traditional companies like Siemens are moving device data onto Ethereum, broadening use cases and making more traditional capital recognize Ethereum’s ecosystem value, accelerating capital inflows.
Crucially, technical upgrades are continuously boosting Ethereum’s core competitiveness and supporting demand-side growth. The Fusaka upgrade, coming online by the end of 2025, will use PeerDAS to increase data throughput eightfold, lower Layer2 transaction costs, and enable mobile wallet password login, greatly improving scalability and user experience. Verkle Tree technology will allow ordinary smartphones to run verification nodes, further lowering the barrier to ecosystem participation. Currently, Ethereum accounts for 60% of global DeFi TVL, over 90% of NFT platform trading volume, and more than $134 billion in stablecoin issuance. Its ecosystem moat continues to widen, strengthening institutional and capital entry momentum.
Behind the Shift: Ethereum’s Value Reconstruction and the Supercycle Outlook
The combination of extreme supply shrinkage and trillion-dollar demand inflows is essentially transforming Ethereum from a “crypto asset” to both “digital infrastructure” and a “mainstream allocation asset.” The supercycle’s conditions are now fully in place, though potential risks remain.
On the opportunity side, in the short term (by end-2025), the market is still in a consolidation and bottoming phase, with $3,000 as strong support. However, expectations of supply-demand imbalance will gradually materialize, and with continued institutional inflows, stabilization and recovery are likely. In the medium term (2026-2028), Layer2 ecosystem activity, increased staking ratios, and the realization of technical upgrades will continue to deliver, propelling ETH price steadily upward, potentially toward $6,000. In the long term (2029-2030), if asset tokenization, increased institutional allocation, and further regulatory clarity are achieved, ETH could challenge the $10,000 mark and even narrow the market cap gap with Bitcoin, becoming the core leader of the crypto market.
On the risk side, higher staking concentration may bring centralization risks, with large validators dominating and possibly affecting network security. Slower growth in restaking and declines in user activity could temporarily impact ecosystem liquidity. Additionally, macroeconomic swings, regulatory tweaks, and the inherent high volatility of crypto markets could still trigger periodic corrections and must be approached rationally.
Regardless, with Ethereum’s exchange supply at a ten-year low and Wall Street giants opening compliant entry channels, the future trend for Ethereum is clear: tradable supply is dwindling, while inflows are surging. The script of supply-demand imbalance is already written. Driven by both institutionalization and ecosystem expansion, Ethereum’s supercycle is poised for launch—the feast of value reconstruction has only just begun.
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