Report: Institutions Flock to Ethereum for 7 Weeks as Consolidation Looms

Institutional investors are pouring into the Ethereum-based digital asset fund, which has seen inflows for seven consecutive weeks, according to a new report from CoinShares.

Inflows into Ethereum products reached $16.3 million last week, bringing the total inflows over the past seven weeks to $159 million.

James Butterfill, head of research at CoinShares, said on Aug. 8 that the rise in market sentiment for ethereum products was largely due to “greater transparency” related to the upcoming merger on Sept. 19. Butterfills said:

“We believe the improvement in investor sentiment is due to the clearer timing of Ethereum’s merger from proof-of-work to proof-of-stake.”

The merger means that the Ethereum mainnet will merge with the Ethereum 2.0 beacon chain to complete the transition from Proof of Work (POW) to Proof of Stake (POS) consensus mechanism. The POS consensus mechanism is expected to make Ethereum more secure, energy-saving and environmentally friendly.

The merger of the Goerli and Prater testnets is also expected to take place this week, and will be the last rehearsal before the mainnet will merge in less than six weeks.

traders are getting ready

Blockchain analytics firm Glassnode said the highly anticipated merger has crypto traders ready to "buy the rumor, and sell the news."

“Derivatives traders are making directional bets on ethereum, especially in relation to the merger planned for September 19.”

In an Aug. 8 newsletter titled “Bet on Consolidation,” the analytics firm noted that a combined ETH options and futures market would be in “backward,” where the current price of the asset is higher than where the futures market is trading.

"After September, both futures and options markets were in backwardation, suggesting that traders expected the merger to be a 'buy the rumour, sell the news' event and have done so," the firm said. Prepare accordingly."

However, the jury is still out on how the merger will ultimately affect the price of Ethereum. In a recent interview, ethereum founder Vitalik Buterin remains optimistic about the long-term prospects of ethereum, saying that the situation after the merger will likely remain positive because this aspect has not yet been priced in (price in: general use It is used to express a kind of pricing for future expectations, which means that some news has been digested by the market and the corresponding price is given).

"Once the merger does happen, I expect a huge boost in morale. I basically expect the merger to not be priced in, and I don't just mean the market side, or even the psychological and narrative side. Narratively, I think the It won't be priced in until it happens."

At the time of writing, Ethereum was trading at $1,776, up 8.6% over the past seven days, according to CoinGecko.