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Institutional investors pile into ETH funds ahead of The Merge

By Daniela Ešnerová

06:28, 12 August 2022

Illustration of Ethereum (ETH) logo
ETH-based funds attracted flows, as BTC-based investment products shrunk. – Photo: ShutterStock

Fund managers are piling into ETH-based funds as the deadline for the Ethereum blockchain’s long-awaited upgrade, The Merge, looms. Ether-based investment funds saw $16m inflows last week, while bitcoin (BTC) investment products were hit with $8m outflows, data from CoinShares Digital Assets report show

Over the last seven weeks, ETH-based funds attracted $159m. Ethereum’s network upgrade, which will see the blockchain move from Proof-of-Work (PoW) to a more environmentally-friendly Proof-of-Stake (PoS) consensus mechanism, is set to finalize next month. 

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ETH to US Dollar

Clarity on timing

The Merge has been in the works since the beginning of 2020 and its completion was hit with several delays along the way.

“We believe this turn-around in investor sentiment is due to greater clarity on the timing of The Merge,” CoinShares' head of research James Butterfill says, commenting on ETH funds inflows.

Since Ethereum developers penned the perpetual deadline for The Merge for September on 15 July, the biggest altcoin grew a whopping 85%.

US100

19,930.30 Price
+0.590% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 1.8

XRP/USD

0.58 Price
-8.200% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

Gold

2,467.83 Price
+0.300% 1D Chg, %
Long position overnight fee -0.0196%
Short position overnight fee 0.0114%
Overnight fee time 21:00 (UTC)
Spread 0.30

BTC/USD

64,881.50 Price
+0.590% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

BTC to US Dollar

 

Impressive rally

ETH's impressive rally amid the market downturn was established as the main force behind the cryptocurrenies' pickup in July, as noted by a heavyweight among institutional investors, JP Morgan:

“We think the real driver has been the Ethereum Merge and positive data following the launch of the Sapolia testnet in early July and Ropsten testnet in June, indicating the Merge is viable in 2022,” JP Morgan's analyst Kenneth Worthington wrote in a note published this week.

ETH further surged on Wednesday following Ethereum's testnet Goerli successfully switching to PoS, which gave a green light to The Merge's completion the next month.

Markets in this article

ETH/USD
Ethereum / USD
3451.80 USD
40.08 +1.170%
BTC/USD
Bitcoin / USD
64881.50 USD
377.7 +0.590%

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