CoinShares: Ethereum Products Are Attracting Institutional Inflows As Merge Gets Closer

CoinShares: Ethereum Products Are Attracting Institutional Inflows As Merge Gets Closer

August 9, 2022

Ethereum (ETH) continues to attract institutional inflows as Merge gets closer according to a report released by CoinShares. This is a very important thing for Ethereum, which is now going through a transition period that requires the community to work together in order for things to succeed. The report shows that there have been $16.3 million in inflows to Ethereum just last week. 

Ethereum Attracts Institutional Investors

According to James Butterfill, CoinShares Head of Reseearch, the current inflows to Ethereum are closely related to the new transition towards a proof-of-stake (PoS) blockchain network. Things are getting clear and investors are not betting on Ethereum and on a stable transition to a new network. 

The Ethereum community has been working for several years in order to transition to a more efficient blockchain network. This will happen with Ethereum merging with Beacon Chain (Ethereum 2.0). In this way, the Ethereum blockchain will become more reliable over time and it will be able to compete against newer and faster blockchain networks. 

Nowadays, the Ethereum network is congested and, as soon as there is an increase in transaction volumes, fees skyrocket and transaction times increase. This makes it almost impossible to use Ethereum for decentralized finance (DeFi) solutions and non-fungible tokens (NFTs).

According to the report, Ethereum is near a 7 consecutive week run of inflows that total $159 million. The inflows last week were at $16 million. 

The report reads as follows:

“Ethereum saw inflows totalling US$16m and is enjoying a near 7 consecutive week run of inflows totalling US$159m. We believe this turn-around in investor sentiment is due to greater clarity on the timing of The Merge.”

According to data shared by CoinGecko, Ethereum grew by 7.7% in the last 7 days, something that confirms what CoinShares says. Bitcoin (BTC), instead, move higher by 2.1%. Among the top 10, Ethereum was among the top 3 fastest-growing virtual currencies in the last week. ETH is now being traded for $1.765,00 and it has a market valuation of $211.74 billion. 

There could be many positive things in the future for Ethereum with the new PoS blockchain ecosystem that they are trying to build. We have seen other blockchains such as Binance Smart Chain (BSC), Polkador (DOT), Solana (SOL), or Cardano (ADA) expand thanks to Ethereum’s lack of reliability when it comes to DeFi applications, transactions, and NFTs.

It is easier and cheaper to use smart contracts and send or receive transactions on other blockchain networks than on Ethereum. But this is expected to change in the near future with the merge with Ethereum 2.0 Beacon Chain. 

The results could be very positive, not only for Ethereum, but also for the whole crypto ecosystem, as other blockchains might have to offer better services and solutions than those offered by Ethereum dApps. Additionally, these other blockchain networks will also be less congested considering that a good part of their volume could move to ETH. 

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