Cryptocurrency investment firm Grayscale Investments is taking more time to decide whether it should acquire and sell ethereum tokens that were forked after the merge.
Grayscale announced on March 16 that it intends to extend the review period to assess the market environment to determine whether it can acquire EthereumPoW (ETHW) tokens the forked asset that will emerge following the ethereum merger in September 2022. During the review period, the firm also aims to decide if, when, and in what manner Grayscale will sell ETHW on behalf of record-day shareholders. "Such review periods are currently not expected to exceed 180 days from the date of publication," Grayscale noted in its announcement.
Grayscale attributed the extension of the review period to continued uncertainty about support for the ETHW token by digital asset custodians and trading venues. “If digital asset custodians do support the ETHPoW token and/or the trading market does develop, expect the value of the ETHPoW token to fluctuate wildly for a period of time,” Grayscale said, adding:
“It is impossible to predict whether Grayscale as an agent will be able to obtain ETHPoW Tokens or the value, if any, that Grayscale will be able to obtain as an agent from the sale of ETHPoW Tokens.” Ethereum is currently the second largest blockchain network after Bitcoin in market capitalization, and completed a major consensus upgrade Merge in September 2022. This upgrade moves the Ethereum network from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus algorithm. Due to the willingness of some in the Ethereum community to continue using the mining-based PoW Ethereum model, Ethereum forked into two different blockchains, primarily PoS-based Ethereum and EthereumPoW.
The emergence of ETHW poses a significant challenge for crypto investment firms offering exposure to Ethereum, as some investors may wish to gain exposure to ETHW. Some firms, such as ETC Group, a European exchange-traded product (ETP) issuer, decided to launch a new ETP offering exclusive exposure to ETHW. “The new ETP seems to be better because we just don’t know if ETHW will succeed,” ETC Group founder Bradley Duke told Cointelegraph in September 2022.
In September, Grayscale announced that two of its Ethereum-related products, Grayscale Ethereum Trust and Grayscale Digital Large Cap Fund, announced the distribution of rights to ETHW. By late September, each product had received tokens through the fork.
