Avalanche's Treasury Play: Can AVAX Outpace Rivals with Institutional Buy-In?

Avalanche Foundation is preparing a $1 billion fundraising initiative through the establishment of two U.S.-based digital asset treasury entities, according to reports. The effort, which aims to boost institutional participation in the blockchain, is being led by Hivemind Capital and Dragonfly Capital. The funds raised will be used to purchase millions of AVAX tokens at a discount from the Foundation’s holdings, which currently include about 420 million of the 720 million tokens in circulation.

One of the entities, supported by Hivemind Capital, is in the process of securing up to $500 million through a Nasdaq-listed firm. Anthony Scaramucci, former White House press secretary and current crypto investor, has been named an advisor to this initiative. The second, backed by Dragonfly Capital, is expected to raise a similar amount via a special purpose acquisition vehicle (SPAC), though the timeline for its completion may extend into October.

The initiative reflects Avalanche’s broader strategy to align with the growing trend of blockchain-based treasury models, which have seen increased interest from institutional investors. The plan includes converting an existing firm into a treasury-focused entity and establishing a new one, with the goal of accumulating AVAX tokens for long-term value appreciation. Analysts suggest that this move is intended to accelerate institutional adoption and strengthen the network’s position in the competitive crypto market.

The announcement has already had a measurable impact on AVAX’s price performance. In the 24 hours following the news, AVAX surged by more than 8%, with network transaction volumes rising to nearly 12 million in a week. The price rally is attributed to increased DeFi activity, the popularity of memecoins on Avalanche’s C-Chain, and the broader institutional interest in tokenized investment products. Technically, the coin appears poised to test key resistance levels above $29.9, with potential price targets near $31 and $34 if a breakout occurs.

Despite this optimism, the broader institutional adoption of Avalanche tokens remains subject to regulatory delays. In July, the U.S. Securities and Exchange Commission (SEC) postponed approvals for both Grayscale’s Avalanche Trust and VanEck’s Avalanche ETF proposals, adding uncertainty to the immediate outlook for institutional capital inflows. However, the momentum behind Avalanche’s treasury strategy signals a long-term approach to building demand and institutional credibility.

The initiative also aligns with recent partnerships between Avalanche and major financial institutions, including BlackRock, Apollo, and Wellington Asset Management, all of which have tested tokenized investment funds on the platform. While AVAX lags behind top rivals like Ethereum and Solana in terms of price gains this year, the fundraising effort is seen as a pivotal step toward strengthening its competitive position in the digital asset space.