Ethereum Nears Supply Squeeze Amid Rising Demand and Institutional Interest

The anticipation of an altcoin season has increased the price of Ethereum (ETH), marking a significant change for the second-largest cryptocurrency.

Factors Behind ETH’s Surge

A report from Sygnum highlights that ETH's price reached all-time highs in August, surpassing Bitcoin in relative performance.
The Pectra upgrade improved Ethereum's infrastructure and expanded the staking cap from 32 to 2048 ETH, boosting staking activity.
The SEC clarified that protocol staking activities are not security offerings.
Increased stablecoin activity and tokenized securities on Ethereum have driven demand, pushing prices near $5,000.
Record inflows into Ethereum ETFs and corporate treasury purchases have further fueled demand.

Ethereum Faces Looming Supply Squeeze

Institutional interest is growing, reducing the liquid supply of ETH on exchanges.
This trend suggests a possible supply crunch, potentially increasing prices if demand persists.
US legislative developments have clarified stablecoin regulations, enhancing institutional opportunities.
With technical upgrades and institutional interest, ETH is positioned to benefit from stablecoin issuance and adoption trends.

As Ethereum reserves dwindle and demand rises, the potential for a supply squeeze presents an opportunity for investors. Currently, ETH trades at $4,420, up nearly 3% in the last 24 hours and 87% year-to-date, though still 10.6% below its all-time high.