Avalanche's $1B Treasury Push: Can AVAX Outperform Skeptics?

The Avalanche Foundation, the non-profit entity supporting the AVAX blockchain, has announced plans to raise $1 billion through two U.S.-based digital asset treasury companies to accumulate AVAX tokens at discounted prices. The initiative, still under negotiation with institutional investors, aims to provide the foundation with capital for network development while offering investors exposure to AVAX, the blockchain’s native token. According to insiders, the first of these deals is led by Hivemind Capital and will target $500 million from publicly traded Nasdaq-listed firms. Anthony Scaramucci, a prominent crypto investor and former White House press secretary, is reportedly advising on the deal. The second deal, led by Dragonfly Capital, will use a special purpose acquisition company (SPAC) to raise an additional $500 million. The first deal is expected to be finalized by the end of the month, while the second is projected to close by October.

Both projects aim to purchase AVAX tokens from the Avalanche Foundation at a discounted price, a common strategy in the crypto market to build institutional confidence. This approach aligns with a broader trend of crypto treasury companies raising capital to purchase cryptocurrencies, a model that has attracted over $16 billion in funding this year. However, recent declines in the stock prices of similar firms such as Metaplanet have signaled a shift in investor sentiment, with growing skepticism about the long-term viability of crypto-hoarding strategies. Despite these concerns, Avalanche’s initiative reflects a strategic pivot to attract institutional investment while strengthening AVAX’s market position.

The Avalanche Foundation, which manages the AVAX token, currently controls approximately 420 million of the 720 million AVAX tokens in circulation. The foundation has maintained a non-profit structure to avoid U.S. securities regulations and holds significant reserves in low-tax jurisdictions. The planned treasury vehicles represent a bid to position Avalanche as a preferred blockchain for traditional finance applications, particularly in tokenization. Major investment firms, including BlackRock and Apollo, have tested tokenized funds on the network. While Avalanche has made strides in attracting institutional interest, AVAX has underperformed relative to tokens from competing blockchains like Ethereum and Solana during the current market rally.

Market data indicates that AVAX has recently experienced a notable upward trend. Over the past 24 hours, the token rose by 10.7%, continuing a weekly gain of 16.4%. The price has climbed from the mid-$25 range to just above $29, breaking out of a consolidation phase seen in early September. This surge appears to be fueled by the news of the foundation’s treasury company plans, which has generated renewed investor confidence. However, the token faces resistance at the $30 level, with selling pressure emerging in that range. On the downside, support is expected near $27.50 to $28, a key breakout zone for the recent rally. If AVAX holds above this level, it could reinforce a bullish trend; a drop below $27 might trigger a retest of $26.

The broader implications of Avalanche’s move extend beyond its immediate financial goals. By establishing treasury vehicles in the U.S., the foundation is positioning itself to compete with other blockchain platforms for institutional adoption and investment capital. The strategy mirrors that of firms like Strategy, which gained attention for its Bitcoin accumulation model. However, the market’s recent reaction to similar ventures suggests that Avalanche will need to demonstrate strong token performance and network growth to sustain investor interest. As the crypto landscape evolves, the success of these treasury initiatives could serve as a benchmark for future institutional onboarding in the blockchain sector.