Amid all the hype surrounding last week’s major Ethereum overhaul known as the Merge, investors remained cautious on the blockchain’s native token ETH – and their caution was vindicated as the cryptocurrency tumbled following the event.
Investment products tied to ETH saw a fourth straight week of outflows in the period ended Sept. 16, with the amount removed exceeding new money added by $15.4 million, according to CoinShares. This was not an across-the-board trend in crypto. Funds that invest in ETH’s bigger rival, bitcoin (BTC), broke a five-week streak of outflows as investors added a net $17.4 million.
ETH’s price has fallen significantly since the Merge – which has been heralded as an event that could lure more large investors to the ecosystem – even though the perilous upgrade went smoothly. About five days before the transition took place on Sept. 15, ETH approached $1,800. It sank below $1,300 today.
Investors who rode ETH’s rally going into the Merge may have sold their positions.
“Large liquidations of leveraged long positions across derivatives markets exacerbated the drop in spot prices,” according to a report from crypto data firm Kaiko that attempted to explain why ETH has fallen so much after the Merge.