Institutional Powerhouse Backs $1B AVAX Treasury to Drive Ecosystem Expansion

Avalanche Treasury Co. has announced a $675 million business combination with Mountain Lake Acquisition Corp. (MLAC), a Nasdaq-listed special purpose acquisition company (SPAC), in a move designed to establish a $1 billion AVAX treasury and facilitate a public listing under the ticker "AVAT" by early 2026AVAX DAT News: AVAT SPAC Deal Aims for $1B Treasury^[1]. The deal, pending regulatory and shareholder approval, positions the entity to become one of the largest institutional investment vehicles for AVAX, Avalanche's native token. The merger is backed by a coalition of institutional investors, including Galaxy Digital, Pantera Capital, VanEck, and Kraken, as well as strategic advisors such as Emin Gün Sirer, founder of Ava Labs, and Stani Kulechov, co-founder of AaveAVAX rises as Avalanche Treasury, Mountain Lake SPAC seal …^[2].

The treasury's initial capital raise includes a $200 million discounted AVAX purchase through an exclusive agreement with the Avalanche Foundation, offering a 0.77 times net asset value (mNAV) discount-approximately 23% below market priceAVAX Surges as Avalanche Treasury Co. Plans $1B Token …^[3]. This structure aims to provide investors with a regulated pathway to AVAX exposure while actively supporting Avalanche's ecosystem growth. The company plans to scale its AVAX holdings to $1 billion by investing in protocols, validator infrastructure, and tokenization projects, including real-world asset (RWA) initiativesAVAT SPAC Deal Aims for $1B Treasury^[4]. CEO Bart Smith, a Wall Street veteran with experience at Susquehanna and AllianceBernstein, emphasized the treasury's role as an "engine for Avalanche's growth," distinguishing it from passive token accumulation modelsAvalanche Treasury Co. eyes $1B AVAX holdings^[5].

Avalanche's network activity has surged alongside the deal's announcement, with 50 million transactions processed in the past month and a 22% increase in active wallet addresses to 753,000Avalanche Network activity adds momentum^[6]. The blockchain's recent Octane upgrade, which reduced transaction fees by 98%, has further enhanced its appeal for enterprise applications. Institutional demand for AVAX is also evident, with Bitwise and other firms pursuing Avalanche-focused ETFs. The SPAC deal arrives as regulators inch closer to providing clarity for institutional crypto adoption, with Avalanche emerging as a preferred platform for scalable blockchain solutionsRegulatory Catalysts on Horizon^[7].

AVAX's price responded positively to the news, reaching an intraday high of $31.32 before consolidating at $30.72. Analysts note that the token must hold above $27.69 to sustain its bullish trajectory, with potential targets at $34.93 and $37.54 if it breaks through $32.77 resistanceAVAX price outlook^[8]. The treasury's strategy aligns with broader trends in crypto treasury vehicles, following examples like AgriFORCE Growing Systems' rebranding to AVAX One. However, the sector faces scrutiny as some firms shift to debt-funded buybacks amid declining stock prices, raising questions about long-term sustainabilityCrypto Treasury Craze Unravels as Firms Turn to Debt-Fueled Buybacks^[9].

The merger is expected to close in Q1 2026, with Avalanche Treasury Co. managing its AVAX holdings while actively participating in the network's governance and infrastructure. The advisory board includes figures such as Haseeb Qureshi of Dragonfly and Jason Yanowitz of Blockworks, reflecting a blend of crypto-native and traditional finance expertiseAvalanche Treasury Co. plans to be active onchain^[10]. As Avalanche's ecosystem expands, the treasury's dual focus on token accumulation and active on-chain engagement could solidify its role in driving institutional adoption and network utility.