Institutions Flocking to Ethereum as Merge approaches after rise in market

Jamal Molla
Written By Jamal Molla
Jamal is an English teacher and freelance writer with a passion for NFTs, metaverse, crypto and technology.

A new CoinShares report has shown that institutions flocking to Ethereum and are throwing in all their Ethereum (ETH), with landmark positive inflows reaching the seventh straight week. During the last weeks, the inflow has amounted to $16.3 million, which equals the $159 million inflows within the last seven weeks..

James Butterfill, CoinShares Head of Research, said the upsurge in market sentiment regarding Ethereum-focused products is related to the “greater clarity” for its future Merge, scheduled to take place on September 19, 2022.

Butterfill said, “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.”

The Merge will result in the Ethereum mainnet merging with the Ethereum 2.0 Beacon Chain, thereby completing the shift from proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. The essence is to ensure Ethereum becomes more energy efficient, secure, and environmentally friendly through the PoS consensus mechanism. In another related incident, the Prater Testnet and Goerli merger is anticipated to occur this week.

Biggest movers, AVAX nears a 2-Month high, FIL up 15% despite weekend volatility.

Traders getting ready for the Merge

Glassnode, a Blockchain analytics company, advocated that the expected merger has geared up crypto traders who are positioning themselves to sell the news and buy the rumor. The firm noted, “Derivatives traders are placing directionally obvious bets for Ethereum, specifically relating to the upcoming Merge planned on September 19.”

The analytic firm released a publication titled “Betting on the Merge,” stating that the futures and ETH options markets are positioned in “backwardation” — a condition where an asset’s current price is higher than the trading price in the futures market. The firm also noted, “Both futures and options markets are in backwardation after September, suggesting traders are expecting the Merge to be a ’buy the rumor, sell the news’ style event, and have positioned accordingly.”

Nevertheless, the panel of judges is still contemplating how the Merge may eventually influence Ether’s price. In an interview, Vitalik Buterin, Ethereum founder, remains upbeat as to the long-term prospect of ETH.

He noted, “Once the merge actually happens then I expect morale is going to go way up. I basically expect that the merge is going to be not priced in, by which I mean not even just market terms, but even psychological and narrative terms. In narrative terms, I think it’s not going to be priced in pretty much until after it happens.”

The Ethereum price is $1,776, which is an 8.6% rise within the last seven days.

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