Institutional investors pile into ETH funds ahead of The Merge
06:28, 12 August 2022
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.
What is your sentiment on ETH/USD?
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%.
BTC to US Dollar
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.