According to PANews, Joe Lubin, co-founder of Ethereum and founder and CEO of crypto infrastructure company ConsenSys, said that if the Ethereum spot ETF is approved, the resulting "flood of demand" for Ethereum may lead to supply constraints. Lubin explained that institutions that have been exposed to Bitcoin through the newly launched Bitcoin ETF "most likely want to diversify their investments into the second approved ETF," and the demand for buying Ethereum through the ETF will be considerable, but the supply to meet this demand will be less than when the Bitcoin spot ETF was approved in January this year.
On-chain data shows that more than 27% of the total Ethereum supply has been staked on the Ethereum network, which is locked in contracts to earn returns for its owners. Lubin said: "A lot of Ethereum is used in core protocols, decentralized financial systems, or DAOs." Not only is Ethereum's market value lower than Bitcoin, but a large portion of its supply cannot be used by ETFs. In addition, new activities on Ethereum will cause the network to destroy a large amount of the existing Ether supply over time, further limiting the supply.
