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The latest CoinShares report shows that institutional investors are pouring money into digital asset funds based on Ether (ETH). These funds have had seven straight weeks of positive inflows.
Last week, said inflows reached $16.3 million, bringing the total for the last seven weeks to $159 million.
CoinShares Head of Research James Butterfill said on Monday that the rise in market sentiment for Ethereum-focused products is mostly due to "greater clarity" about the upcoming Merge, which is set for September 19. Butterfill said:
"We think this change in investor mood is because we now know more about when The Merge will happen, when Ethereum will switch from proof-of-work to proof-of-stake."
During The Merge, the Ethereum mainnet will merge with the Ethereum 2.0 Beacon Chain. This will finish the switch from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) one. The PoS consensus mechanism should make Ethereum safer, use less energy, and be better for the environment.
This week should also see the merge of the Goerli and Prater testnets. This will be the last dress rehearsal before the mainnet. In less than six weeks, Merge will happen.
Traders gearing up
Blockchain analytics firm Glassnode said that crypto traders are getting ready to "buy the rumor and sell the news" about Merge.
"Derivatives traders are making clear-cut bets on Ethereum, especially about the upcoming Merge, which is scheduled for September 19."
Monday, the analytics firm wrote in a newsletter called "Betting on the Merge" that after the Merge, the ETH options and futures market is in a state called "backwardation," in which the current price of an asset is higher than its price on the futures market.
"Both futures and options markets are in backwardation after September, which suggests that traders expect the Merge to be a "buy the rumor, sell the news"-style event and have positioned themselves accordingly," the firm said.
But it's still too early to tell how the Merge will affect Ether's price in the long run. Vitalik Buterin, the founder of Ethereum, said in a recent interview that he is still optimistic about ETH's long-term prospects. He said that the story will probably stay positive after Merge, which is something that hasn't been priced in yet:
"Once the merge happens for real, I think morale will go up a lot. I'm pretty sure that the merger won't be priced in, and I don't just mean in market terms. I also mean in psychological and story terms. In terms of the story, I don't think it will be priced in until after it happens."
At the time of this writing, the price of Ethereum is $1,776. This is an increase of 8.6% over the last week, according to data from CoinGecko.
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