According to CoinShares, institutional inflows into Ethereum products have been driven by “greater clarity” surrounding the Merge, according to a CoinShares study.
The latest CoinShares report shows that institutional investors are investing in Ether-based ( Ethereum) digital asset funds. These funds have seen seven consecutive weeks of positive inflows .
These inflows amounted to $16.3 million last Wednesday, bringing the total inflows for the past seven weeks to $159 million.
CoinShares Head Of Research James Butterfill said Monday that the increase in market sentiment for Ethereum-focused products was largely due “greater clarity” regarding the upcoming Merge ,. Butterfill stated:
“We believe that this turnaround in investor sentiment can be attributed to better clarity regarding the timing of The Merge, where Ethereum moves from proof-of work to proof-of stake.
The Merge will bring the Ethereum mainnet together with the Ethereum 2.0 Beacon Chain. This will complete the transition to a proof of work (PoW), and a proof-of stake (PoS), consensus mechanism. The PoS consensus mechanism will make Ethereum safer, more energy efficient, and more environmentally friendly.
The Prater and Goerli testnet merge will also take place this week. This will be the last dress rehearsal before mainnet Merge, which takes place in less that six weeks.
Glassnode , a blockchain analytics company, suggested that the highly anticipated Merge has crypto traders gearing to “buy the Rumor, and Sell the News:”
“Derivatives traders place directionally obvious bets on Ethereum, particularly in relation to the upcoming Merge scheduled for 19 September.”
The analytics firm, in a newsletter titled “Betting on the Merge”, noted Monday that the ETH options market and futures market are in “backwardation” after the merger. This is when the current asset price is higher than the futures prices.
According to the firm, “Both the futures and options markets are backwardated after September. This suggests that traders expect the Merge as a ‘buy-the rumor, sale the news’ type event and have positioned accordingly.”
The jury is still out on how the Merge will affect Ether’s value. Vitalik Buterin , Ethereum founder, stated that ETH’s long-term prospects are still optimistic. He said that the narrative would likely remain positive after Merge, an aspect that has yet to be priced in.
“Once the merger actually happens, I expect morale to go way up. The merger will not be priced in. This does not only refer to market terms but also psychological and narrative terms. It won’t be priced in narrative terms until it actually happens.
Ethereum’s price is $1,776 as of the writing of this article, an 8.6% increase over the previous seven days, according to data from CoinGecko.