According to CoinShares’ latest report, institutional investors are investing in Ether-based digital assets funds. These funds have seen seven consecutive weeks of positive flows.
These inflows amounted to $16.3 million last Wednesday, bringing the total inflows for the past seven weeks to $159 million.
On Aug. 8, CoinShares Head Research James Butterfill stated that the increase in market sentiment for Ethereum-focused products was largely due “greater clarity” regarding the upcoming Merge. Butterfill said:
“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.
Merge will see Ethereum’s Mainnet merge with Ethereum 2.0 Beacon Chain. This will complete the transformation from proof-of work (POW), to a proof of stake (POS) consensus mechanism. The POS consensus mechanism will make Ethereum safer, more efficient and more environmentally-friendly.
This week is also expected to see the Prater and Goerli testnet merge. It will be the last dress rehearsal before the mainnet Merge, which takes place in less that six weeks.
Traders gearing up
Glassnode, a blockchain analytics firm, suggested that crypto traders are gearing up for the highly anticipated Merge 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.”
Analytics firm, “Betting on the Merge”, published a newsletter on Aug. 8 that noted that the ETH options and futures markets are positioned in “backwardation”. This is a situation where 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.”
Similar: Ethereum options data shows pro traders are ready to invest long in ETH’s Merge
The jury is still out on how the Merge might impact Ethereum’s prices. Vitalik Buterin, the founder of Ethereum, expressed optimism about ETH’s long term prospects in a recent interview. He stated that the narrative would likely remain positive after Merge — an aspect that hasn’t been priced yet.
“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.
According to CoinGecko data, the Ethereum price is $1,776 as of the time of writing. This represents an 8.6% increase over the previous seven days.