Institutional investors are piling into the Ether-based digital asset fund, which has seen positive inflows for seven consecutive weeks, according to the latest CoinShares report.
Inflows last week reached $16.3 million, bringing 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 the Ethereum-focused product was largely related to the next Merge, scheduled for Sept. 19, with “clarification.” ,” said Butterfill.
“We believe this upturn in investor sentiment is due to the clearer timing of The Merge when Ethereum moves from proof of work to proof of stake.”
The merge will merge the Ethereum mainnet with the Ethereum 2.0 beacon chain, completing the transition from Proof of Work (POW) to Proof of Stake (POS) consensus mechanisms. The POS consensus mechanism is expected to make Ethereum more secure, energy efficient, and environmentally friendly.
A merge of the Goerli and Prater testnets will also take place this week. This will be his final dress rehearsal scheduled before the mainnet merge takes place in his six weeks.
traders getting ready
Blockchain analytics firm Glassnode suggests that crypto traders are preparing to “buy the rumor, sell the news” in the highly anticipated Merge.
“Derivatives traders are making directional bets on Ethereum, especially in relation to the upcoming merge scheduled for Sept. 19.”
In its Aug. 8 newsletter “Betting on the Merge,” the analytics firm noted that the ETH options and futures markets are in “backwardation” after the merger. This is a situation where the current price of an asset is higher. than the price traded on the futures market.
“Both the futures and options markets have been in backwardation since September, with traders expecting the merger to be a ‘buy the rumor, sell the news’ style event and position accordingly. suggests that,” the company said.
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However, the jury is still out on how the merge will ultimately affect the price of Ethereum. In a recent interview, Ethereum founder Vitalik Buterin remained optimistic about the long-term prospects for Ethereum, stating that, as an aspect not yet woven in, the narrative could remain positive post-merger. said to be highly probable.
“I would expect morale to improve significantly once the integration actually happens. I basically expect this merger to be unpriced. And even in narrative terms I mean, narratively speaking, until that happens, I think it’s hardly worth it.”
According to CoinGecko data, the price of Ethereum is at $1,776 at the time of writing, up 8.6% over the past seven days.