According to the latest report from the Securities and Exchange Commission of the Grayscale Ethereum Trust, or ETHE, Ethereum (ETH)’s imminent transition to proof of effort represents a risk that could have a “significant adverse effect” on its inventory.
ETHE recently applied to the regulator to become a SEC Reports company. Companies of this type are required to discuss risk factors that may adversely affect the results in all quarterly and annual reports.
A section aimed at identifying potential risks for the fund’s future explains that the transition to ETH 2.0 may pose some difficulties for investors:
The Digital Asset Network’s consensus mechanism is a physical aspect of the source code, and any lack of proper implementation of such a change could have a significant adverse effect on ETH and capital costs.
The report says that failure to implement these changes correctly can lead to temporary or permanent forking, which can adversely affect the ETHE stock.
ONE asset under management. Source: data on digital assets.
So far, it seems that the upcoming update has not dampened the investor’s interest in the fund. Conversely, the assets of the fund under management have grown significantly over the past year, from $ 67 million to over $ 800 million at the time of publication. Although the price of ETH has almost doubled during this time period, ETH reserves have increased more than ten times.