Ethereum's upcoming transition to PoS has generated positive sentiment among institutional investors

Ethereum (ETH) has recently received more attention from professional investors. The general sentiment around the token seems to be improving even in the bear market.

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Institutional investor positivity on ETH is increasing

The prevailing downtrend has seen a wave of price drops in many major digital assets over the past few months. Some of them have lost more than half of their value since 2022. Ethereum is no exception.

However, ETH saw a glimmer of light at the end of the tunnel. The change is tied to the long-awaited launch of its latest upgrade, The Merge, which is coming up. Its launch will convert the blockchain from Proof-of-Work (PoW) to Proof-of-Stake (PoS) operation.

The network has undergone a final upgrade test to ensure maximum functionality. Despite many glitches in the initial stages that raised concerns about the timely launch on the mainnet, everything seems to be going well, Ethereum will launch the upgrade before October.

By weekly news fund manager CoinShares on asset fund flows, there has been a significant improvement in ETH-based products. The company noted that it has seen positive inflows for ETH-based products for three consecutive weeks. So the result was that ETH funds accumulated about $7.6 million in institutional investments. Conversely, Bitcoin saw an outflow of $1.7 million.

CoinShares sought to explain the possible reason behind the influx of ETH funds and pointed to the expected transition to PoS. She mentioned that 2022 saw eleven weeks of outflows from asset funds. Total outflows rose to US$460 million for the year. So the sudden turn in sentiment is a very positive development for ETH.

Investors are losing interest in BTC

Currently, total institutional inflows are $14.6 million. However, roughly $6.3 million comes from funds that enable short BTC, which means less confidence in the primary global cryptocurrency from many investors.

ETH-based funds have seen a surge since the end of June the same week. So far, however, institutional investors' sentiment about Ethereum does not seem to be reflected in its spot price.

Meanwhile, there is a heated debate on Twitter about whether Etherum should be classified as a security or not. Some Bitcoin maximalists support Michael Saylor, CEO of MicroStrategy, who considers ETH a security. However, Ethereum supporters, including Vitalik Buterin, the protocol's co-founder, are pushing back against such a claim.

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All content in this article is for informational purposes only and does not in any way serve as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.