Supply Contraction Draws Market Attention
Sygnum's latest Q1 2026 investment outlook reveals a significant Ethereum supply contraction. Approximately 45% of ETH is currently locked up, making it inaccessible for public market selling.
This reduced supply trend is particularly evident among exchanges, where ETH holdings dropped 14.5% this quarter, continuing a multi-year decline.
ETFs and Public Companies Increase Holdings
Meanwhile, exchange-traded funds (ETFs) now hold about 10% of the total ETH supply, indicating growing institutional interest in Ethereum.
- ETF holdings show increasing Ethereum adoption in traditional finance
- Public companies hold over 6.1 million ETH, accounting for about 5% of circulating supply
These figures highlight Ethereum's transition from a retail-dominated market to an institutional-dominated one.
Reduced Supply May Trigger Price Volatility
While reduced supply could lead to greater price volatility, Sygnum's report emphasizes this volatility would only occur with increased demand.
Investors should closely monitor market demand changes and prepare for potential volatility.