Grayscale Files for Spot AVAX ETF Conversion on Nasdaq

Grayscale has formally applied to the U.S. Securities and Exchange Commission (SEC) to convert its Grayscale Avalanche Trust into a spot AVAX exchange-traded fund (ETF) listed on Nasdaq [1]. The trust, which was launched in August 2024, currently holds approximately $15 million in assets and seeks to mirror the performance of Avalanche’s native token, AVAX. The proposed ETF, to be named the Grayscale AVAX Trust ETF, will operate as a passive investment vehicle, allowing shares to trade on a regulated exchange [6].

The S-1 registration statement submitted by Grayscale outlines the transition from a private trust to a publicly traded fund and includes details about the fund’s structure, including cash-based creation and redemption mechanisms facilitated by authorized participants [9]. Coinbase has been designated as the prime broker, responsible for custodying AVAX and executing trades, while BNY Mellon will serve as the administrator and transfer agent [1]. Grayscale also indicated that the fund may incorporate staking rewards under specific conditions and if staking is enforced [7].

This application represents the second regulatory filing in the conversion process, following an initial 19b-4 notice in late March [1]. The firm has previously demonstrated its ability to navigate regulatory pathways, having successfully converted its Ethereum Trust into a spot ETF and managing two of the largest spot Bitcoin ETFs with combined assets exceeding $25 billion [5]. Grayscale is also pursuing approval for ETFs based on other cryptocurrencies, including Solana (SOL), Cardano (ADA), and Litecoin (LTC), and has submitted a proposal for a multi-asset crypto fund [5].

The move reflects a broader trend of crypto fund providers seeking to meet growing institutional and retail demand for structured exposure to digital assets. VanEck has also filed an application for an AVAX ETF, signaling increased competition in the space [1]. As the U.S. regulatory environment appears to be evolving under a pro-crypto administration, the approval of a spot AVAX ETF could set a precedent for the broader acceptance of crypto assets in traditional financial markets [6].

Currently, AVAX is trading at $23.67, down 7.96% on the day, according to CoinGecko [1]. The token remains significantly below its November 2021 peak of $144.96, having declined by 83.7%. A spot AVAX ETF could provide a more accessible avenue for investors to gain exposure to the token without the need to directly hold or manage it [9].

Grayscale’s application for a spot AVAX ETF underscores its continued expansion into crypto-based investment vehicles and highlights the firm’s strategic focus on regulatory compliance and institutional accessibility. The SEC’s decision will be a key indicator of how the regulator is approaching the broader crypto ETF landscape, which remains an area of active debate and scrutiny [6].

Source:

[1] Grayscale Seeks SEC Approval To Convert Its Avalanche Trust Into Spot AVAX ETF (https://zycrypto.com/grayscale-seeks-sec-approval-to-convert-its-avalanche-trust-into-spot-avax-etf/)

[5] Grayscale's Avalanche ETF Set to Reshape Crypto Investing (https://bravenewcoin.com/insights/grayscale-files-for-spot-avalanche-etf-as-crypto-fund-competition-heats-up)

[6] Grayscale Files S-1 to Convert AVAX Trust into Spot ETF (https://www.ainvest.com/news/grayscale-files-1-convert-avax-trust-spot-etf-2508-4/)

[7] Grayscale Seeks SEC Approval for Spot Avalanche ETF on (https://thedefiant.io/news/regulation/grayscale-seeks-sec-approval-spot-avalanche-etf-on-nasdaq-4dbe69dc)

[9] Grayscale Seeks SEC Approval to Convert Avalanche (https://cryptodnes.bg/en/grayscale-seeks-sec-approval-to-convert-avalanche-trust-into-spot-etf-on-nasdaq/)