By Shelly Melancon (Switzerland)
Despite the price dip experienced by Ethereum, institutional investors are not giving up on the prospects of the second-largest cryptocurrency. There are telltale signs that investors remain adamant that Ethereum’s price will bounce back as the long-awaited Merge approaches.
Moreover, Ethereum’s investors’ sentiments are a good sign for the crypto industry as it comes amid dwindling market fortunes. The general sentiment is negative, contributing to the continuous decline in the crypto market.
As a result, newcomers are often deterred by the usual bearish trend, triggered partly by negative sentiments from professional investors.
Steady Inflows for Ethereum Products
In the latest crypto-assets fund flow report from CoinShares, Ethereum-based products recorded steady inflows for three straight weeks. The inflows for institutional Ethereum funds were $7.6 million, while Bitcoin suffered outflows of $1.7 million.
According to the CoinShares report, the Ethereum inflows signify a change in sentiment after it endured a grueling 11 weeks of outflows. Meanwhile, the total outflows for the year were $460 million. A huge loss for the Ethereum network.
However, the CoinShares report revealed that the gradual turnaround might be due to the highly anticipated Merge that would occur later in the year.
It is worth noting that the Merge is an upgrade that seeks to change Ethereum’s consensus protocol from Proof-of-Work (PoW) to Proof-of-Stake (PoS). The Merge is at its final stage and awaiting a test run before its proper launch in October.
Institutional Investors Fuelling Ethereum Rebound
Late last month, investors brought funds back into Ethereum amid significant outflows totaling $423 million.
The majority of these funds are from Bitcoin-based assets. During that period, some inflows reached $14.6 million. However, short Bitcoin funds constituted about $6.3 million. This shows that investors are still not convinced about the BTC recovery.
Thus, funds and exchanges in the United States recorded inflows of $8.2 million, with 76% of those being short Bitcoin funds.
Meanwhile, the daily spot trading did not reflect the positive sentiment about Ethereum in the day’s performance, as ETH is currently down 2.9%. According to CoinGecko, Ethereum is trading at $1,047, having shed 28% of its value last month.
In another development, the debate over Ethereum’s status as a commodity or security is still ongoing on Twitter. On the one hand, pro-Ethereum labels the second largest cryptocurrency as a commodity.
On the other hand, Bitcoin maximalists agree with Michael Saylors’ view of Ethereum as a security.
The SEC chairman previously announced last month that digital assets are classified based on their use and the purpose they serve. Accordingly, the commission has labeled Bitcoin a commodity but has yet to make it officially binding on stakeholders.
Furthermore, the raging debate over which crypto assets are commodities is approaching its end once regulators approve Bitcoin to function as one. The king of cryptocurrencies is long regarded as a reserve asset just like gold, effectively putting any speculation about its status to rest.
Overall, the broader market has much to recover from the shock of the price collapse.
At Tokenhell, we help over 5,000 crypto companies amplify their content reach—and you can join them! For inquiries, reach out to us at info@tokenhell.com. Please remember, cryptocurrencies are highly volatile assets. Always conduct thorough research before making any investment decisions. Some content on this website, including posts under Crypto Cable, Sponsored Articles, and Press Releases, is provided by guest contributors or paid sponsors. The views expressed in these posts do not necessarily represent the opinions of Tokenhell. We are not responsible for the accuracy, quality, or reliability of any third-party content, advertisements, products, or banners featured on this site. For more details, please review our full terms and conditions / disclaimer.