Upcoming ETH Merge Sees Institutional Investor Sentiment Turn Positive

Ethereum (ETH) has been receiving more attention lately from professional investors. The general sentiment surrounding the token appears to be improving even amid the bearish cryptocurrency market.

The prevailing bearish trend has led to a sinking wave of several prominent digital assets over the past few months. Some have lost more than half their values ​​since 2022. Most crypto assets have gradually declined in value during the week, and ETH is no exception. The price of the token also declined in trading on Wednesday.

However, Ether sees a glimpse of light from the end of the tunnel. The change has to do with the long-awaited launch of its latest development, Merge, which is approaching. Grid was preparing for the upgrade tagged with the merging mark. Its launch will move the blockchain from operating as a Proof of Work (PoW) to Proof of Stake (PoS).

Related reading | Inflation Reaches 40-Year High, Will Bitcoin and Ethereum Fall Again?

Grid was running its final upgrade test to ensure its maximum functionality. If everything appears to be flowing correctly, Ethereum will launch the upgrade before October.

Positive about ETH . increases

according to weekly Report From a CoinShares fund manager on asset fund flows, there is a significant improvement in Ether-based products. The director noted that for three consecutive weeks, there have been positive inflows into ether-based products. As a result, ether funds have raised about $7.6 million on institutional investments. Conversely, Bitcoin had several outflows amounting to $1.7 million.

While trying to explain the possible reason that gave flows to Ether funds, CoinShares indicated the expectation of the merger. It reported that there were eleven weeks of asset fund outflows within 2022. The total outflow for this year rose to $460 million. Therefore, the sudden shift in sentiment is a positive advance for the Ethereum cryptocurrency.

Investors lose interest in Bitcoin as inflows of short Bitcoin funds increase

Currently, the total institutional inflows are $14.6 million. However, about $6.3 million comes from short Bitcoin funds, which means less confidence in the world’s leading cryptocurrency from many investors. Also, US funds and exchange inflows are approximately $8.2 million, although 76% of them were in short positions. This shows the same percentage for the week ending July 8.

Ether-based funds saw a surge in inflows from institutional investors in late June, the same week, with records of outflows reaching $423 million. Notably, Bitcoin-based funds made up the majority of the amount.

Suggest reading | Quantity (QNT) Records Gains in Last Days – Is a Short-Term Rise in Place?

It appears that the emotional renewal of Ether from institutional investors is not reflected in its spot price. Today’s chart shows that ETH is at $1,091 after declining 1.7% in the past 24 hours. Also, the value gives a 28% decrease in its price from last month.

Institutional Investors Get Positive About ETH As Consolidation Approaches
ETH/USD is hovering near $1K. Source: TradingView

There is an ongoing debate on Crypto Twitter if Ether should be classified as security or not. Some Bitcoin extremists are backed by Michael Saylor, CEO of MicroStrategy, who is proposing ETH as a security. However, Ethereum proponents, including Vitalik Buterin, the co-founder of the protocol, are leaning away from such a suggestion.

Featured image from Shutterstock, chart from TradingView.com

Leave a Comment

Your email address will not be published.