Grayscale’s Bold Move on ETHPoW Tokens
In a surprising twist, cryptocurrency investment titan Grayscale has decided to part ways with its rights to post-Merge proof-of-work Ethereum tokens, commonly dubbed ETHPoW. On September 18, the firm announced that it has “irrevocably abandoned” these rights for the benefit of shareholders. This decision might feel like breaking up, but don’t worry, it’s not you—it’s the ETHPoW tokens.
The Low Liquidity Dilemma
After a thorough review, Grayscale pointed out that the ETHPoW tokens lack meaningful liquidity. In layman’s terms, it’s like holding onto a hot potato that nobody wants to catch. Grayscale’s statement read:
“As such, it is not possible to exercise the rights to acquire and sell the ETHPoW tokens, and on behalf of the record date shareholders, Grayscale is abandoning the rights to these assets.”
They also noted that their custodian won’t even support these tokens, which screams red flag across the crypto landscape.
A Year After The Merge
This pivotal moment comes over a year after Ethereum’s transition from proof-of-work to proof-of-stake—a spectacular event known as The Merge that occurred on September 15, 2022. With this significant shift, Ethereum’s blockchain forked into two entities: the main, eco-friendly PoS-based Ethereum and the elusive, energy-chugging ETHPoW rival. Kind of like dividing families during the holidays, but with more tokens and less turkey.
The Decision-Making Saga
Initially, following The Merge, Grayscale grappled with the idea of acquiring and potentially selling ETHW tokens on behalf of its shareholders. However, uncertainty surrounding the support of ETHW by custodians and trading venues led to a lengthy deliberation of 180 days, followed by an additional six months of indecision. Let’s just say, it’s been a long and winding road—like a Netflix binge-worthy series filled with cliffhangers!
Comparing Different Strategies
Unlike Grayscale’s cautious approach, other firms, like ETC Group, have taken a more proactive stance on the ETHPoW front. ETC Group attempted to launch its own EthereumPoW exchange-traded product (ETP) but folded just six weeks into it due to a lack of qualified custody providers. Talk about an epic facepalm moment!
Looking Ahead: Grayscale’s New Plans
As if a plot twist was needed, the news of Grayscale abandoning ETHPoW rights came just one day before the firm proposed a shiny new Ether (ETH) futures exchange-traded fund. They filed with the United States Securities and Exchange Commission to launch the Grayscale Ethereum Futures Trust (ETH) ETF under the New York Stock Exchange Arca Rule 8.200-E on September 19. Here’s hoping this new venture isn’t another wild goose chase.
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