Grayscale Abandons 3.1 Million ETHW Received After The Merge
A year post The Merge, Grayscale has finally decided to relinquish all rights associated with the ETHW tokens received in the past.
Grayscale abandons 3.1 million ETHW received after The Merge. Photo: Blockworks
As reported by Coin68, Ethereum successfully underwent The Merge upgrade on September 15, 2022, transitioning from the energy-intensive Proof-of-Work (PoW) mechanism to a more sustainable Proof-of-Stake (PoS) model. This marked a historic milestone for the world's second-largest blockchain network.
At that time, alongside miners who embraced PoS, there were still factions opting to remain with PoW and continue mining ETH. This led to the emergence of a fork alongside Ethereum PoS, known as Ethereum PoW (ETHW). Moreover, holders of ETH prior to the chain split were airdropped ETHW tokens.
Among these recipients was Grayscale, the largest cryptocurrency asset manager in the United States, currently engaged in a protracted legal dispute with the Securities and Exchange Commission (SEC). Based on their holdings of ETH valued at over $4.9 billion, Grayscale received approximately 3.1 million ETHW tokens, worth around $155 million at that time.
Grayscale had considered buying back and selling ETHW on behalf of shareholders but hesitated and delayed these actions. Partly due to the fact that ETHW prices had plummeted over 44 times from their all-time high (ATH) of $58. Furthermore, given the current low liquidity, liquidating ETHW would pose challenges and potentially harm investors.
In a recent announcement on September 18, Grayscale has now decided to completely relinquish all rights and responsibilities associated with ETHW, no longer participating in the management or holding of these tokens. ETHW prices have since dropped nearly 100% since their listing and trading.
Price fluctuations of ETHW from September 2022 to date, screenshot from CoinMarketCap at 10:00 AM on September 21, 2023
This news comes just a day before Grayscale applied for a new Ethereum futures ETF. The company has submitted a filing to the SEC proposing to launch an open-end fund product based on the regulatory framework Arca 8.200-E of the New York Stock Exchange.
In other developments, even the Ethereum network itself is currently experiencing losses, with ETH being undervalued by over 27% compared to its true value.
