Post Ethereum Merge: Grayscale Seeks More Time To Review ETHPoW Stance

Prominent asset management platform Grayscale Investments has revealed that it is extending its decision-making process to determine whether to buy and sell the post-Merge Ethereum tokens. Ethereum’s transition from the proof-of-work (PoW) to the proof-of-stake (PoS) consensus algorithm had been opposed by miners leading to the development of a forked protocol known as ETHPoW.

Review In Progress

According to a recent announcement, Grayscale Investments has extended its review period to enable it to evaluate the market situation on whether to move ahead with its plan to acquire ETHPoW tokens. During the review period, Grayscale would decide on the time and manner it will sell the ETHPoW tokens on behalf of the shareholders.

However, the review period is expected to be 180 days from the announcement date, as revealed by the asset manager. The crypto trading platform reasoned that the review period extension comes amid the ongoing uncertainty concerning support for ETHPoW tokens by digital asset exchanges.

Moreover, if crypto custodians support the tokens or the trading market evolves, the value of the ETHPoW will fluctuate for some time. Grayscale noted that it is difficult to say whether it would benefit from the ETHPoW as an agent.

Despite the significance of the Merge, some Ethereum network members, notably miners, decided to stick to the PoW mining model. Hence, the network now has PoS-based Ethereum and ETHPoW.

The Challenges Of ETHPoW

ETHPoW’s emergence has reportedly paved the way for another significant challenge to crypto investment companies offering investors exposure to Ethereum. Some investors want exposure to ETHPoW rather than the PoS-based version.

Due to this, firms like ETC Group, the Europe-based ETP issuer, reportedly launched a new ETP that provides exposure to ETHPoW. Bradley Duke, the founder of ETC Group, disclosed that the new ETP appears better because the firm has yet to learn what will happen if the ETHW fails to succeed.

In September 2022, Grayscale reportedly announced that its two Ethereum-based investment tools, the Grayscale Ethereum Trust and the Grayscale Digital Large Cap Fund, have distribution rights to ETHPoW. In another development, the Grayscale Investments CEO, Michael Sonnenshein, revealed his frustration with the US Securities and Exchange Commission (SEC) over the latter’s inability to protect Grayscale investors.

According to the CEO, the regulator violated the Administrative Procedures Act by not approving the conversion of the Grayscale Bitcoin Trust (GBTC) to a Bitcoin spot exchange-traded fund (ETF) last June. However, the SEC based its stance because the Grayscale proposal did not adequately address fraud protection and market manipulation.