The supply of Ethereum is dwindling faster than ever, with charts from multiple trackers showing that more than 40% of all Ethereum is currently locked out of circulation. Analysts believe limited liquidity, increased staking pool activity and insatiable appetite from institutional investors are factors that will push the world’s second-largest coin back to record highs.
According to market data shared by community member Taylor.eth on Tuesday, approximately 3.4% of Ethereum’s circulating supply is held by dormant addresses and decentralized autonomous treasuries (DATs), making these tokens illiquid for years or forever.
Circulating supply of ETH is decreasing extremely rapidly
3.4% held by DAT (illiquid for years or forever)
7.3% held by ETFs (80% illiquid)
29.5% (mostly illiquid due to exit rate restrictions)ETH has not experienced a cycle in which these three supply vacuums exist. DAT is new, spot… pic.twitter.com/yl9fDEnOuB
— Taylor.eth (@Taylorlikeseth) October 14, 2025
Taylor said 7.3% is in exchange-traded funds (ETFs), most of which sit nearly 80% idle. However, approximately 29.5% of the total supply is staked within Ethereum’s proof-of-stake network.
The staking portion is largely inaccessible due to the slow validator exit rate limit, which is currently around 40 days. All these pools combined will deplete more than two-fifths of the total supply of cryptocurrencies, enough to trigger a crisis in the coming months.
Taylor.eth cites statistics from crypto analyst Crypto Gucci noticed Ethereum has never experienced a market cycle where all three supply vacuums are active at the same time.
“This time, ETH enters the cycle with record institutional demand and the lowest liquid float in history. When demand meets shrinking supply like this, the price will not only rise, but it will go nuclear,” a long-term investor speculated.
Institutional demand sucked up 12% of ETH supply
The U.S.-based exchange-traded fund has already absorbed 6.84 million ETH worth about $28 billion, or about 5.6% of the total supply, according to data compiled by Ark Investments. This accumulation occurred without the approval of ETH contributions to the ETF.
The listed companies listed on Ark’s bulletin board collectively hold more than 12% of the total ETH supply. This includes Tom Lee’s Bitmine, which purchased $834 million worth of ETH earlier this week. According to on-chain data platform Arcam Intelligence, the company currently holds $12.52 billion in Ethereum, more than halfway to its goal of controlling 5% of the total circulating supply.
Investor Ted Pillows supported his bullish view on Crypto Gucci, suggesting that Ethereum may be significantly undervalued compared to macroeconomic benchmarks.
“$ETH will catch up with M2 supply in Q4. Ethereum fair value will be $8,000-$10,000 by Q1 2026. With institutional bidding and staking approvals, I think ETH will rise hard,” he wrote on X.
According to CryptoQuant contributor Arab Chain, after a brief rise in parallel with ETH price stabilizing around $4,000, Ethereum’s supply ratio on Binance Ratio has fallen to 0.33 this week, close to the lowest value last observed in May.
He explained that a decline in this ratio could mean investors are moving assets away from exchanges and into long-term holdings or staking, resulting in less selling pressure.
From 2018 to 2021, Binance’s supply ratio increase preceded a price adjustment phase in anticipation of a decline. However, during periods of large withdrawals like the current one, the price of the coin increased significantly.
Will Ethereum record another ATH soon?
Tracking the decline in foreign exchange reserves, Arab Chain said many holders may be storing their Ethereum outside of centralized exchanges as they have confidence in decentralized storage and staking solutions.
Despite this bullish sentiment, some traders on social media have dismissed the “supply vacuum” theory as overblown.
“This supply story has been touted for over a year,” one X user commented. “Prices have not broken down and remain above their all-time highs, but rather have returned to 2017 levels.”
As of this writing, Ethereum is trading around the mid-$4,100s after rebounding from its stock price. correction By Friday, it had fallen to $3,900. Technical analysts note that the current price structure looks somewhat bullish as long as ETH remains above the $3,990 support zone.
