The Wolf Den #1143 - How High Can Ethereum Go?
I have some ideas...
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In This Issue:
How High Can Ethereum Go?
Bitcoin Thoughts And Analysis
Stocks Drop As Earnings Come Into Focus
A Massive New ETH Treasury Just Emerged
Trump Media Is Going All In On Bitcoin
Polymarket Is Coming To The U.S.
They Are Trying Everything Possible To Remove Powell
Bitcoin Has Never Been This Bullish – How Long Will It Last? | Macro Monday
How High Can Ethereum Go?
Not to toot my own horn, but take a look at this:
On February 11, Ethereum hit a low of $2,565.40 – a brutal drop considering it had traded above $4,000 just two months earlier in December. At the time, it felt like capitulation. What we didn’t know then was that the pain wasn’t over. ETH had more blood to shed, eventually falling another $1,000+ before bottoming out at $1,386.80 in April.
If you were holding ETH – or 99% of altcoins, for that matter – you basically had a one-way ticket to Goblin Town. It was pure, unrelenting pain.
But I always believed we’d bounce back. I’ve said for a long time that ETH was overdue for a breakout. The catch? No one knew when – and most didn’t believe it would happen at all.
This is a screenshot from a newsletter I wrote back in September of 2024, covering a conversation I had with Coinbase's Head of Institutional Research, David Duong:
Neither of us had a clue ETH would push above $4,000 that December – then fall 65% in the middle of a bull market – igniting fears that SOL and XRP might surpass ETH in market cap (neither of them are close now).
ETH’s price action is wildly unpredictable. I maintained high conviction and kept saying ETH had to squeeze, but it wasn’t easy to repeat that mantra when the market felt dead for so long. Still, my gut told me to stick with it – and eventually, it would come.
At one point, I considered comparing ETH’s squeeze to XRP’s – but it doesn’t feel accurate. ETH and XRP are just too different. Sure, a squeeze is a squeeze and TA is TA, but XRP’s run from $0.50 to $3.00 was largely driven by retail waking up from the dead. ETH has some of that now too, but there’s also serious interest from Wall Street, which changes the dynamics entirely.
It’s a simple fact: XRP doesn’t have ETF exposure or the kind of interest from publicly traded companies acquiring it as a treasury asset the way ETH does. I said the same thing back when it squeezed from $0.50 to $3.00 – and I still think it largely holds true today.
ETH doesn’t really have a return of old-school investors – rather, it has old-school investors who’ve been pissed off for years bag-holding, finally able to breathe a little now that their investments are near even, or maybe slightly up if they DCA’d.
Part of the reason ETH carried so much negative sentiment is because the bag holders never left – they just sat around, pissed off. With XRP, on the other hand, most holders said their farewells and moved on, leaving only true believers to establish and bounce off the lows.
Predicting where ETH is headed isn’t just about how much current or past holders will accumulate – it’s about how much fresh demand comes in from retail and institutions. That’s a tough question to answer, but we can start by looking at some of these new companies and assessing how ambitious their goals really are.
Ether Machine is the newest of the bunch – less than 24 hours old. I’ve got a full write-up on it in the news segment below. They haven’t announced a target size for how much ETH they plan to hold, but they launched with over 400,000 ETH, instantly making them the largest known ETH treasury holder.
I can imagine they will buy A LOT of ETH.
Here’s BitMine:
“At BitMine, we have surpassed $1 billion in Ethereum holdings, just seven days after closing on the initial $250 million private placement. We are well on our way to achieving our goal of acquiring and staking 5% of the overall ETH supply.”
The current ETH supply stands at 120.7 million. To control 5% of that, BitMine would need to acquire and stake around 6 million ETH – an ambitious goal that would instantly make it the second-largest validator in the ecosystem. For context, Lido leads with 9.1 million ETH staked, while Binance is next with 2.9 million. Hitting this scale would give BitMine real influence over Ethereum’s future direction.
SharpLink: This is Joseph Lubin’s company, and it has plans to sell up to $6 billion in shares to acquire ETH, with a goal of reaching 1 million ETH. That’s not a typo. In just the last nine days, they’ve already added $515 million worth of ETH to their treasury. SharpLink recently filed a prospectus supplement with the SEC that upped its potential common stock sale from $1 billion to $6 billion – and they’re being very clear: nearly all of that is going toward buying ETH. If they follow through, the company will control almost 1.4% of ETH’s circulating supply.
To recap:
We still don’t know how much ETH Ether Machine is aiming to acquire – it could be a Strategy-style play with no clear end in sight.
BitMine has publicly stated its goal: 5% of the total ETH supply, or around 6 million ETH.
SharpLink is targeting just over 1% of the supply, roughly 1 million ETH.
None of these companies are anywhere near their full potential yet – mainly because they’re still in their very early stages and have a lot of ETH left to buy if they plan to hit their targets. If BitMine moves closer to its 6 million ETH goal, it drives the price up for SharpLink and Ether Machine. And if Ether Machine keeps buying, it makes things more expensive for BitMine and SharpLink. Whatever the order, the price of ETH has to go up. You get the idea – it’s a race, and every move raises the stakes.
As of now, about 1.48% of ETH’s supply is recorded as treasury reserves. That figure is likely outdated, so let’s be generous and round it up to 2%. And that’s not just from the three companies we’ve discussed – it includes every company buying ETH for their treasuries. Combined, these entities could easily be targeting 10% of the total supply. And that’s not even counting ETH ETF holdings, which currently account for 4.34% of the supply.
For reference, BTC ETFs have purchased 6.51% of the total supply. Separately, about 17% of the total BTC supply is held in various treasuries.
I’m sure someone will take issue with these figures and point out that the ETH data isn’t complete – and they’re probably right. But the truth is, there’s simply less available data right now because this is a newer narrative and a smaller asset.
The point that matters: a lot more ETH is about to be taken off the market thanks to treasury companies and ETFs – and that pressure will force the price to rise.
How many multiples will it push ETH from $3,800? If you’ve made it this far, here’s the bad news – it’s still extremely hard to answer.
I could just say that ETH treasury companies plan to buy around 10 million ETH, and that ETFs will eventually catch up to Bitcoin in terms of supply ownership – so maybe the price should 3x from here and we call it a day. But that would be arbitrary at best, and irresponsible at worst.
ETH isn’t like Bitcoin, where you can draw a clean comparison to gold and say, ‘Bitcoin is a better version of gold, so its market cap should eventually surpass gold’s.’ That kind of logic doesn’t map neatly to ETH.
It also doesn’t make much sense to compare ETH to BTC and argue it should be 50% or 40% of its size – that kind of benchmark feels just as arbitrary. Right now, ETH’s market cap is about 20% of Bitcoin’s, and honestly, that feels fairly healthy. Key word being ‘feels’ – I have no data to back up what the “right” size ratio should be.
I could see ETH reaching 25% or 30% of BTC’s size, but beyond that doesn’t make a ton of sense at the moment. That would mean:
If BTC goes to $200,000 and hits a $4 trillion market cap
ETH at 25% of that would be $1 trillion
Divide that by the 120.7 million ETH in circulation
You get a price around $8,285 per ETH
If ETH reaches 30%, the market cap becomes $1.2 trillion – implying a price close to $9,942 (basically $10k).
The last thing to consider is that end-of-cycle blow-off tops can push all of these numbers much higher. But based on my napkin math, these are the targets I’m working with. They assume BTC reaches $200k – if it tops out at $175k, adjust accordingly. If it runs to $250k, raise your expectations.
And for ETH to perform, we need sustained interest. That doesn’t mean Bitcoin dominance has to collapse for the rest of the cycle – but sentiment around ETH needs to stay strong.
We’ve only just gotten back on track.
Bitcoin Thoughts And Analysis
Bitcoin continues to flex its strength, grinding higher and holding firm just below resistance at $123,231. After breaking out above $112,000 earlier this month with a burst of volume and momentum, price has cooled off slightly, consolidating in a tight range between $117K and $123K. This isn’t weakness – it’s digestion. A bullish pause. Traders are clearly eyeing the next move, and so far, the chart looks like it’s winding up for another push.
Support at $112,000 has held cleanly, and the 50-day moving average is trending steadily upward, now comfortably below price – a textbook sign of bullish structure. If $123K breaks, it could set off a new leg higher, potentially triggering another wave of FOMO. But even a drop back to $112K would keep the uptrend intact, with secondary support around $105K offering a strong safety net.
Volume tells the story too. It surged during the breakout and has since tapered off, which is exactly what you’d expect during a calm consolidation. In short: BTC looks healthy, poised, and still in charge. The next big move could be just around the corner – and right now, the bulls have the edge.
Stocks Drop As Earnings Come Into Focus
Stocks edged lower Tuesday as investors digested corporate earnings and weighed the looming impact of U.S. tariffs. The S&P 500 pulled back slightly after hitting record highs Monday, with stretched valuations dampening enthusiasm despite solid Q2 results. J.P. Morgan’s Hugh Gimber noted that while earnings beats are common, the real focus is on how tariffs might affect forward guidance. Key reports from Lockheed Martin and Coca-Cola are expected Tuesday, with Tesla and Alphabet on deck Wednesday.
Japanese markets were choppy following a major electoral loss for Prime Minister Ishiba’s coalition, raising fiscal policy uncertainty. The yen weakened and long-dated government bonds slipped, though global debt strength helped cushion the reaction. Meanwhile, the Stoxx Europe 600 dipped 0.4% and U.S. futures also trended lower.
At the Fed, Chair Jerome Powell continues to face political heat for holding rates steady in 2025, with Treasury Secretary Scott Bessent calling for a review of the Fed’s non-monetary activities. On the trade front, the White House may issue more tariff actions before the August 1 deadline, even as new deals remain possible.
In commodities, oil and gold extended their declines, while iron ore climbed toward a five-month high on hopes for Chinese steel reforms. Corporate headlines included AstraZeneca’s $50 billion U.S. investment plan, Sanofi’s $1.15 billion acquisition of Vicebio, and a surge in Compass Group shares after a bullish guidance raise and acquisition.
Stocks
S&P 500 futures fell 0.1% as of 5:39 a.m. New York time
Nasdaq 100 futures fell 0.3%
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 fell 0.4%
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.1696
The British pound was little changed at $1.3490
The Japanese yen fell 0.1% to 147.56 per dollar
Cryptocurrencies
Bitcoin rose 1.3% to $118,459.75
Ether fell 2.7% to $3,656.17
Bonds
The yield on 10-year Treasuries advanced one basis point to 4.39%
Germany’s 10-year yield advanced one basis point to 2.62%
Britain’s 10-year yield advanced two basis points to 4.63%
Commodities
West Texas Intermediate crude fell 1.1% to $66.47 a barrel
Spot gold fell 0.3% to $3,385.97 an ounce
A Massive New ETH Treasury Just Emerged
All of these metrics are going to soon need updating:
If the figure on BitMine is up to date at 300,000 ETH, then it’s about to lose its first-place position to the new company I’m about to discuss - launching with over 400,000 ETH.
I’ll let the PR do some of the explaining:
“Formed through a business combination (to be completed) between The Ether Reserve, LLC and Dynamix Corp, a NASDAQ-listed special purpose acquisition company, pursuant to the Business Combination Agreement (the “Business Combination”), The Ether Machine is an Ethereum yield and infrastructure company purpose-built for institutional management and scale.”
“The Ether Machine expected to launch with over 400,000 Ether (“ETH”) and manage the largest pool of assets in a public vehicle for pure-play institutional-grade exposure to Ethereum and ETH-denominated yield.
Led by Ethereum trailblazers with firsthand experience driving Ethereum’s rise from a nascent protocol to a cornerstone of the digital asset ecosystem.
Largest all-common-stock financing committed at announcement since 2021; Anchored by contribution of approximately $645 million (169,984 ETH) from Andrew Keys[1], alongside an upsized common stock financing in excess of $800 million from top-tier institutional, crypto-native and strategic investors including 1Roundtable Partners / 10T Holdings, Archetype, Blockchain.com, cyber•Fund, Electric Capital, Kraken and Pantera Capital.”
I highlighted the part above because the press release literally says Andrew Keys (no idea who that is) gave his ETH to the company. That can only mean he received a boatload of shares before launch - shares that will likely be worth a premium soon, if they aren’t already. As for the rest of the ETH, it looks like the company raised over $800 million in cash from big-name investors, which was then (or will be) used to buy more ETH on the open market. So part of the treasury came from a direct ETH-for-equity swap, and the rest was built using fresh capital from institutional backers.
This means Ether Machine is taking a hybrid approach to building its ETH treasury. Ideally, we want to see these companies buying 100% of their ETH on the open market - it drives the price higher and reduces the risk of bubbles. Still, this approach isn’t bad.
I found a description of Andrew for those curious: “Andrew Keys, Co-Founder and Chairman, is a trailblazer in institutional Ethereum adoption. As one of the early members at Consensys, he spearheaded the creation of the first Ethereum Blockchain-as-a-Service offering with Microsoft, which propelled ETH to trade above $1 in 2015. He co-founded the Enterprise Ethereum Alliance (EEA) in 2017 – the largest open-source blockchain consortium in the world with members including Intel, BP and Accenture. Most recently, he co-founded a $1 billion CFTC-registered commodity pool operator, DARMA Capital.”
We have another Wall Street talking head to share the ETH story to media. Let’s go!
Trump Media Is Going All In On Bitcoin
Stock reactions to Bitcoin-buying announcements can be unpredictable – but the general trend has been up. That’s exactly what played out with Trump Media ($DJT) after it disclosed a $2 billion purchase of BTC and related securities. The company later confirmed that Bitcoin now accounts for roughly two-thirds of its total $3 billion in assets.
“We're rigorously implementing our publicly announced strategy and fulfilling our bitcoin treasury plan. These assets help ensure our company's financial freedom, help protect us against discrimination by financial institutions, and will create synergies with the utility token we're planning to introduce across the Truth Social ecosphere,” said Trump Media CEO and president Devin Nunes in the press release.
Polymarket Is Coming To The U.S.
I’ve long said Polymarket deserves a presence in the U.S. – and it’s finally starting to look like that may happen. The company just acquired derivatives exchange QCEX for $112 million, marking its return to the U.S. after a 2022 CFTC settlement forced it to exit the market.
The acquisition gives Polymarket a path to operate legally in the U.S. by leveraging QCEX’s pending regulatory approval to become a designated contract market. CEO Shayne Coplan called it a major step in bringing Polymarket “home” as a compliant platform where Americans can trade on real-world events.
The move comes amid growing momentum for prediction markets, with competitors like Kalshi also gaining regulatory traction.
They Are Trying Everything Possible To Remove Powell
I want to see interest rates lowered just as much as the next guy who owns assets – but using what looks like political pressure to oust the Fed Chair, rather than sound economic reasoning, sets a dangerous precedent. The Federal Reserve is supposed to be insulated from politics, and undermining that independence risks damaging its credibility and the stability of our financial system.
Maybe Pulte and Rep. Anna Paulina Luna have a point – maybe Powell has done something criminal – but to me, this feels more political than factual.
How is the Fed supposed to aggressively lower interest rates when markets are at all-time highs and the economy is still showing signs of strength? Cutting rates in this environment risks fueling asset bubbles and sending the wrong message – that monetary policy is being driven by politics or market pressure instead of real economic need.
Bitcoin Has Never Been This Bullish – How Long Will It Last? | Macro Monday
Trump just green-lit stablecoins, Bitcoin funds scored a record $4.4 B inflow, and Strategy’s stash tops 600K BTC. Dave Weisberger, Mike McGlone, and James Lavish unpack why this could be crypto’s most bullish week ever on Macro Monday.
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