Ethereum Supply Tightens as Staking and ETF Demand Reduce Liquid Float

In late August, Ethereum staged a rare strong rally, rising from around $1,916 to an intraday high of $2,546. The market then consolidated near $2,500, while the ETH/BTC ratio also recovered notably from its mid-year low.

The supply-demand shifts behind this move are significant. US spot Ethereum ETFs saw nearly $700 million in weekly net inflows, approximately 42 million ETH is staked, exchange balances have fallen about 15% since early June, and corporate treasuries continue to accumulate.

These forces are combining to compress the amount of ETH available for immediate sale. The author argues that ETH's liquid float has tightened notably since June, meaning new capital entering a thinner market could produce greater price elasticity.