The transition from Ethereum’s energy-heavy proof-of-work (PoW) system is expected to bring Ether (ETH) “flow into the institutional world,” as believed by several fund managers and co-founders.

Specifically, on September 15th, Ethereum reportedly finalized its official transition to a proof-of-stake (PoS) consensus mechanism, which is expected to bring down energy consumption used by the network by 99.95%, per the Ethereum Foundation.

The upgrade has effectively put an end to the demand for the Ethereum network to be dependent on miners and energy-guzzling mining hardware, to complete the validation of transactions and design new blocks, as these functions are now replaced by validators who “stake” their ETH.

Charlie Karaboga, current Head and co-founder of Australian fintech firm Block Earner, additionally remarked that the network’s transition to PoS would “drive the future of money to be more internet-based.”

He also revealed that Ethereum would turn into “the settlement layer that everyone will accept and trust — especially when the spotlight is shining brighter than ever on the issue of sustainability in crypto mining.”

Markus Thielen, chief investment officer of digital asset manager IDEG, rpeortedlu claimed that he had been holding talks with sovereign wealth funds and central banks to assist the development process of their virtual asset portfolios, but direct investment had often been “voted down due to energy concerns.”

“While demand has been strong, the missing link has been an underlying zero-emissions, financial infrastructure. With Ethereum moving to PoS, this clearly solves this last pillar of concern.” But, with the Ethereum network has completed its PoS transition, this problem will become much less severe. 

Henrik Andersson of Apollo Capital further remarked that ESG had become a “big factor” behind institutional investment decision making in the last few years.