According to the latest report from blockchain analysis platform CryptoQuant, Ethereum (ETH) may be about to usher in a historic moment, breaking through the $5,000 mark for the first time. Supply and demand changes and network development conditions are important factors driving Ethereum's price increase, among which the surge in spot ETF demand and supply tightening are particularly critical.
Spot ETF demand surges as investor confidence rebounds
Since its launch in July 2024, the holdings of Ethereum spot ETFs have been growing, showing the market's strong interest in ETH. According to CryptoQuant data, the total holdings of Ethereum ETFs in the US market increased from 2.716 million ETH in September 2024 to 3.41 million ETH, a record high. This not only reflects the gradual recovery of investor confidence, but also shows that spot ETFs have become an important tool to attract funds amid market uncertainty.
The increase in demand for spot ETFs provides strong support for ETH prices. The purchase of ETFs directly reduces the circulating supply in the market, forming obvious buying pressure and laying the foundation for price increases.
Supply tightening effect is prominent, and the destruction rate continues to rise
In addition to the increase in demand, Ethereum's supply is also conducive to price increases. The latest data shows that the total supply of Ethereum has reached 120 million ETH, but the average daily destruction is steadily increasing. Since September, the destruction rate has jumped from an average of 80 ETH per day in August to more than 2,700 ETH. This is mainly due to the increase in Ethereum network activity and the increase in the activity of decentralized applications (dApps).
When the amount of ETH destroyed exceeds the amount of new issuance, the market will experience deflation, further exacerbating supply tightness. This tight state may provide additional support for ETH prices, especially as network usage grows.
ETH may break through historical highs
CryptoQuant's valuation model shows that the current upper limit of Ethereum's "real price" is about $5,200, which is comparable to the peak of the bull market in 2021. If the current supply and demand trends continue, ETH is very likely to break through $5,000 or even challenge higher prices.
In summary, Ethereum is in a favorable situation with strong demand and tight supply. The continued growth in demand for spot ETFs, coupled with the active network applications, is creating good conditions for ETH prices to rise. If this trend continues, breaking through $5,000 is not out of reach. For holders and investors, this may be an opportunity worth looking forward to.