Ether (ETH) prices may have dropped again on Wednesday, but There are signs that professional investors are becoming fond of the asset as the long-awaited merger approaches.
In its weekly digital asset fund flow report, fund manager CoinShares reported that Ether-based products saw inflows for the third week in a row. There was an inflow of $7.6 million for institutional Ether funds, while Bitcoin (BTC) continued with losses of $1.7 million.
Referring to Ether funds, CoinShares stated: “Inflows suggest a modest change in sentiment, having endured 11 straight weeks of outflows that took 2022 outflows to a peak of $460m”. He added that the change in sentiment may be due to the increasing likelihood of a merge later this year.
The Merge is a long-awaited update to Ethereum that changes its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS). A final test is currently being prepared, with the actual merger expected to take place before October.
At the end of june, Institutional investors began pouring capital back into Ether-based funds during a week that saw record outflows of $423 million, the majority coming from Bitcoin-based funds.
For the period, there was a global inflow of $14.6 million, but Bitcoin shorts totaled $6.3 million, suggesting that investors remain bearish on the king of cryptocurrencies. US funds and exchanges saw inflows totaling $8.2 million, with 76% of them comprising short positions, a similar percentage to the week ending July 8.
The warming of institutional investors towards Ether has not been reflected in the spot price of the asset today. ETH is currently trading down 2.9% in the last 24 hours at $1,047, having lost 28% in the last month, according to CoinGecko.
Crypto Twitter has been busy debating whether or not Ether should be classified as a security, with the specter of tribalism rearing its ugly head again. Bitcoin maximalists have sided with MicroStrategy CEO Michael Saylor, who said that ETH was “obviously” a security last week.
However, Ethereum proponents, including its co-founder Vitalik Buterin, have widely disputed this claim and offered their take on the dispute on Tuesday.
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