Institutional traders are piling into Ether- (ETH)-based digital asset funds, which have recorded seven straight weeks of constructive inflows, according to the most recent CoinShares report.
Said inflows reached $16.3 million final week, including to a complete of $159 million in inflows during the last seven weeks.
CoinShares Head of Research James Butterfill on Monday stated the rise in market sentiment for Ethereum-focused merchandise is basically on account of “greater clarity” referring to the upcoming Merge, which is about for Sep. 19, with Butterfill stating:
“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 see the Ethereum mainnet merge with the Ethereum 2.0 Beacon Chain, which is able to full the transition from proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. The PoS consensus mechanism is anticipated to make Ethereum safer, power environment friendly and environmentally pleasant.
The Goerli and Prater testnet merge can be anticipated to happen this week, which would be the final scheduled gown rehearsal earlier than the mainnet Merge takes place in lower than six weeks’ time.
Traders gearing up
Blockchain analytics agency Glassnode suggested that the highly-anticipated Merge has crypto merchants gearing as much as “buy the rumor, and sell the news:”
“Derivatives traders are placing directionally obvious bets for Ethereum, specifically relating to the upcoming Merge planned on 19 September.”
In a publication titled “Betting on the Merge” on Monday, the analytics agency famous that post-Merge, the ETH choices and futures market is positioned in “backwardation” — a scenario by which the present value of an asset is greater than the costs buying and selling within the futures market.
“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,” stated the agency.
Related: Ethereum choices information present professional merchants able to go lengthy into ETH’s Merge
However, the jury continues to be out as to how the Merge will in the end have an effect on Ether’s value. In a current interview, Ethereum founder Vitalik Buterin remained optimistic about ETH’s long-term prospects, saying that the narrative will probably stay constructive post-Merge — a side that hasn’t but been priced 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.”
The value of Ethereum is $1,776 on the time of writing, up 8.6% during the last seven days, according to information from CoinGecko.