Everyone Is Pouring Money Into Ethereum As Merge Nears
Everyone is pouring money into Ethereum as the merge nears, according to the most recent CoinShares report. Institutional investors are pouring money into Ether-based digital asset funds, which have seen positive inflows for seven consecutive weeks.
Last week, said inflows were $16.3 million, bringing the sum for the previous seven weeks to $159 million.
James Butterfill, the head of research at CoinShares, stated on August 8 that the approaching Merge’s better clarity is largely to blame for the improvement in market sentiment for Ethereum-focused products. The Merge is scheduled to take place on September 19.
“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.”
— James Butterfill (@jbutterfill) August 8, 2022
The Ethereum Mainnet and Ethereum 2.0 Beacon Chain will combine during The Merge, completing the switch from a proof-of-work (POW) to a proof-of-stake (POS) consensus mechanism. Ethereum is anticipated to become more secure, energy-efficient, and environmentally friendly thanks to the POS consensus mechanism.
This week’s Goerli and Prater testnet merge is also anticipated; it will serve as the final practice run before the mainnet Merge, which will happen in less than six weeks.
Traders are preparing
Glassnode, a blockchain analytics company, claimed that cryptocurrency speculators are preparing to buy the rumor, and sell the news in anticipation of the highly anticipated Merge.
On Aug. 8, the analytics firm stated in a newsletter titled “Betting on the Merge” that the ETH options and futures market is in “backwardation” — a condition in which the current price of an asset is greater than the prices trading in the futures market.
The impact of the Merge on Ethereum’s price, however, is still up in the air. Vitalik Buterin, the creator of Ethereum, expressed his continued optimism for ETH’s long-term prospects in a recent interview, noting that the narrative will probably remain positive post-Merge as an element that hasn’t yet been factored in.
“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.”
It would appear that everyone is pouring money into Ethereum lately as the Merge nears.
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