Institutional Investors Flocks Ethereum as Merge Approaches: Coinshares

  • Ethereum-based products have recorded 7 consecutive weeks of massive inflows from institutional investors. 
  • According to CoinShares, anticipations on the upcoming merge appear to have triggered the rise in investor sentiment 

The leading smart contract network, Ethereum has reportedly seen a 7 consecutive week run of inflows from institutional investors. Digital assets manager CoinShares shared the analysis via a weekly report on Monday.

The analysis disclosed that the funds ventured into Ethereum-based products as of last week totaled up to US$16m. Hence, the 7 consecutive week run of constant inflows has seen the funds totaling up to US$159m.

Greater Clarity on Ethereum Merge Timing

According to the report, the 7 consecutive weeks of inflows piled on the Ethereum-based digital asset funds at a time like this suggests that anticipations of the upcoming Merge are on a rise.

The Head of Research at CoinShares, James Butterfill noted in the report that the surging acquisition trend over Ethereum-focused products is majorly attributed to “greater clarity” relating to the upcoming Merge. The Merge is scheduled to be held on the 19th of September, 2022.

Butterfill’s statement reads;

“We believe this turn-around in investor sentiment is due to greater clarity on the timing of The Merge where Ethereum shifts from proof-of-work to proof-of-stake.”

In a bid to improve its efficiency and security, the Ethereum network has sought to adjust its consensus mechanism. Thus, the highly anticipated merge is aimed at enabling the network to transition to proof-of-stake. 

In other words, the event will see the Ethereum mainnet merge with the Ethereum 2.0 Beacon Chain. This activity will complete the transition process from proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. 

The proof-of-stake consensus mechanism is believed to help Ethereum become more secure, efficient, and environmentally friendly. With FOMO coming into the scene, institutional investors aren’t ready to miss out on the proposed upgrade.

Other Digital Assets Sees Minor Inflow

It appears that the market interest is directed majorly towards Ethereum-based investment products. The report further revealed that other digital assets investment products like Bitcoin have seen minor inflow over the weeks.

While noting major cryptocurrencies, the report noted that Bitcoin saw very minor outflows totaling $8.5 million while short-Bitcoin investment products saw a record outflow totaling $7.5 million. This downward trend in the behavior of investors in recent weeks suggests that investors believe Bitcoin prices have troughed. 

In other words, this could mean that the investor buying behavior is an indication that a large number of investors believe that Bitcoin has hit its bottom.

Apart from Bitcoin (BTC), Solana (SOL), Binance Coin (BNB), Cardano (ADA) and XRP investment products have also enjoyed minor inflows during the week.

Side Notes 

The total crypto market capitalization is around $1.17 trillion, down approximately 1 percent today. The total cryptocurrency trading volume in the last day is at $114 Billion. Bitcoin dominance is at 38.9 percent and Ethereum dominance is at 18.2 percent. Worth noting, that DeFi and Play to Earn are the trending markets in the crypto industry.

Bitcoin is trading at $17,014.31 while Ethereum is exchanging hands at $1,260.14.

Rebecca Davidson Verified

Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”

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