The Big Decision: Grayscale Changes Course
In a surprising twist for cryptocurrency investors, Grayscale has made a definitive move by surrendering all rights to post-Merge proof-of-work (PoW) Ethereum tokens, commonly referred to as ETHPoW. This announcement came on September 18, sending ripples through the crypto community as investors processed the implications of this decision.
Why Grayscale Gave Up on ETHPoW
Grayscale cited a lack of meaningful liquidity in ETHPoW tokens and noted that their custodian does not support these tokens. With a firm grip on reality, they stated:
“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.”
A Year After the Merge: What Happened?
The escape from ETHPoW rights comes just over a year after Ethereum’s significant Merge event, which shifted the blockchain from a PoW to a proof-of-stake (PoS) system. This transition, which took place on September 15, 2022, split the Ethereum blockchain into the main PoS-based Ethereum and the less popular PoW variant.
Grayscale’s Lengthy Decision Process
Grayscale’s journey of deliberation on whether to keep pursuing ETHPoW rights extends nearly a year. Following the Merge, the company weighed their options and found themselves grappling with uncertainty around custodial support for ETHW tokens. After six additional months of evaluation, they ultimately decided against pursuing these tokens entirely.
What Does This Mean for Investors?
While Grayscale is stepping away from ETHPoW rights, other firms are attempting to swim where Grayscale is choosing to sink. For instance, the ETC Group launched an EthereumPoW exchange-traded product (ETP) but discontinued it just six weeks later, pointing to a lack of custody providers.
Coincidentally, the day after making the ETHW announcement, Grayscale proposed launching an Ethereum futures ETF, zeroing in on a more promising opportunity amid the uncertainty surrounding ETHPoW. This new investment vehicle could offer more streaming revenue for investors, creating a bright silver lining in the otherwise cloudy ETH skies.
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