ETH’s Epic Turning Point: 10-Year Low in Exchange Supply + Wall Street Titans Open the Floodgates, the Supercycle Is Ready to Ignite

A data point of nuclear magnitude has shattered the crypto market’s calm: Ethereum’s exchange supply has fallen below 9 million ETH, hitting its lowest level since 2015. This is not just retail investors shuffling their portfolios—it’s a “liquidity drain battle” led by whales and institutions. Massive amounts of ETH are being withdrawn from centralized exchanges and routed into staking and long-term ecosystem applications, pushing the amount of immediately sellable “liquid supply” to the brink of exhaustion.

Meanwhile, a disruptive signal is emerging from Wall Street: Bank of America has officially announced that, starting in 2026, over 15,000 of its wealth advisors will be able to directly recommend Bitcoin and Ethereum ETFs to high-net-worth clients, with a clear suggestion to allocate 1%-4% of assets to crypto. This marks the opening of a regulatory “expressway” for trillions of dollars’ worth of traditional financial capital to enter the crypto market—the institutionalization wave has moved from trend to reality.

This extreme reversal on both the supply and demand sides is rewriting Ethereum’s value logic. All the ingredients for a long-awaited supercycle are now in place.

Supply Side: Dwindling Exchange Balances + Long-Term Lockups, Scarcity at New Highs

The continued plunge in Ethereum’s exchange balances signals a deep market consensus shift from “short-term speculation” to “long-term holding,” driven by three core factors that further tighten supply.

First, institutional staking has become a mainstream allocation. Ethereum’s PoS mechanism offers a 3%-4% stable annual yield and ecosystem appreciation potential, upgrading it from a “speculative asset” to a “yield-bearing asset”—a new choice for institutional portfolios. By mid-2025, staked ETH has surpassed 35.3 million (29% of total supply), with Coinbase alone holding $25.97 billion in staked ETH. Companies like BitMine are steadily accumulating ETH as a strategic reserve. The EIP-7251 protocol, driven by the Pectra upgrade, raises the staking cap per validator from 32 ETH to 2,048 ETH, dramatically reducing the cost of large-scale institutional staking and accelerating ETH lockup.

Second, ecosystem lockups absorb massive liquidity. Beyond basic staking, despite a reshuffling in DeFi and restaking sectors, total TVL in restaking protocols is about $22.4 billion, with EigenLayer alone holding over 63% market share. Platforms like Lido, Rocket Pool, Uniswap, and Aave are continuously absorbing market liquidity, channeling ETH out of “trading pools” and into closed ecosystem cycles. Meanwhile, ETH’s daily active on-chain addresses have grown 22% in 30 days, with gas consumption up 18% YoY—asset lockup and ecosystem activity reinforce each other, further reducing sell pressure.

Third, long-term holders are firmly accumulating. Despite short-term market volatility and occasional selling by long-term holders, the overall trend is investors accelerating withdrawals from centralized exchanges into self-custodied decentralized wallets, hedging platform risk and betting on long-term value. In the past seven weeks, exchange ETH balances have plunged 16.4%. This “off-exchange sedimentation” affirms market belief in Ethereum’s long-term potential and makes circulating supply even scarcer.

Demand Side: Wall Street Opens the Gates + Regulatory Clarity, Trillions Lined Up to Enter

If supply contraction strengthens “scarcity,” then demand-side explosion is the “new capital catalyst.” Bank of America’s move is not isolated but a microcosm of the collective crypto push by traditional financial giants, signaling that compliant demand for Ethereum is now fully unlocked.

On one hand, top financial institutions are collectively relaxing allocation restrictions. Beyond Bank of America, Morgan Stanley recommends allocating 2%-4% to crypto, Fidelity suggests 2%-5% (up to 7.5% for younger investors), while asset giants like BlackRock and Vanguard have opened crypto ETF trading. Wall Street’s stance has shifted from “cautious observation” to “active recommendation,” and improved compliance tools have cleared the way for traditional capital. Spot ETH ETFs now offer a regulated exposure channel, attracting vast corporate treasuries and high-net-worth investors. Amundi’s tokenized funds further fuse traditional finance and crypto, with tens of billions in new capital in sight.

On the other hand, regulatory clarity cements the compliance foundation. The SEC’s confirmation that Ethereum is not a security, and the rollout of regulatory frameworks like the GENIUS Act, have lowered institutional compliance friction. Ethereum has become the core carrier for stablecoin issuance and real-world asset tokenization; companies like Siemens are migrating equipment data onto Ethereum, expanding use cases and demonstrating ecosystem value to traditional capital, accelerating inflows.

Crucially, ongoing tech upgrades are boosting Ethereum’s competitiveness and supporting demand growth. The Fusaka upgrade (end-2025) will use PeerDAS to increase data throughput 8x, cut Layer2 transaction fees, and enable mobile wallet password logins, greatly enhancing scalability and UX. Verkle Tree technology will allow ordinary smartphones to run validator nodes, lowering ecosystem entry barriers. Ethereum now accounts for 60% of global DeFi TVL, over 90% of mainstream NFT trading, and $134 billion in stablecoin issuance. Its ecosystem moat continues to widen, reinforcing institutional and capital entry.

Behind the Shift: Ethereum’s Value Restructuring and Supercycle Outlook

The extreme supply squeeze and trillion-dollar demand wave signal Ethereum’s dual value transformation—from “crypto asset” to “digital infrastructure + mainstream allocation.” The supercycle has all the right conditions, but potential risks remain.

On the opportunity side, in the short-term (through end-2025), the market is consolidating, with $3,000 as strong support. Supply-demand imbalance is set to be released, and with sustained institutional inflows, stabilization and recovery are expected. In the medium term (2026-2028), continued Layer2 growth, higher staking ratios, and tech upgrades will support steady price appreciation, with $6,000 as a target. In the long term (2029-2030), if asset tokenization, higher institutional allocation, and clearer regulation all materialize, ETH could break the $10,000 mark and close the market cap gap with Bitcoin, becoming the crypto market’s core leader.

On the risk side, increased staking concentration could bring centralization risk, as some large validators dominate and potentially affect network security. Slowing growth in the restaking sector and declining user activity could temporarily impact ecosystem liquidity. In addition, macroeconomic volatility, regulatory shifts, and the inherent high volatility of crypto markets may trigger periodic corrections—requiring rational management.

Nevertheless, with exchange ETH supply at a ten-year low and Wall Street giants opening compliant entry channels, Ethereum’s future is clear: circulating supply is shrinking, while inflows are rising. The supply-demand imbalance script is already written. Driven by institutionalization and ecosystem expansion, Ethereum’s supercycle is locked and loaded. The value reconstruction feast has only just begun.
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