NASDAQ Seeks SEC Approval for Grayscale Avalanche ETF

NASDAQ has formally submitted a request to the U.S. Securities and Exchange Commission (SEC) to list shares of the Grayscale Avalanche Trust (AVAX) as an exchange-traded fund (ETF). This move aims to provide investors with a more accessible and cost-effective way to gain exposure to the Avalanche ecosystem's native token, AVAX. The filing, submitted on behalf of Grayscale, seeks a rule change that would allow for the listing and trading of an Avalanche spot ETF on the NASDAQ exchange.

Grayscale, a prominent asset manager, already offers clients exposure to AVAX through its Grayscale Avalanche Trust, which was launched in August. This trust provides a closed-end exposure to the cryptocurrency with an expense rate of 2.50% and has accumulated $1.7 million so far. However, converting the trust to a spot ETF would offer a more flexible investment option for traditional investors, allowing them to own the cryptocurrency indirectly in a more cost-effective manner.

The filing details that Coinbase, a US-based crypto exchange, will serve as the crypto custodian, while BNY Mellon, the world's largest custodian bank, will act as the administrator and transfer agent. Additionally, CoinDesk Indices will provide an index for the ETF. This collaboration between established financial institutions and cryptocurrency platforms underscores the growing integration of traditional finance with the digital asset space.

Grayscale's application for an Avalanche ETF comes on the heels of VanEck's recent submission of an S-1 filing with the SEC for the VanEck Avalanche ETF. This move by Grayscale adds to its expanding list of altcoin investment product applications with the SEC, which includes filings for XRP, Solana, Dogecoin, and Polkadot ETFs. However, the SEC has yet to approve any altcoin ETFs other than those tracking Ethereum, with only Bitcoin and Ether spot ETFs currently sanctioned by the agency.

The approval process for the Grayscale Avalanche ETF is now underway, and if approved, it would mark a significant milestone for the cryptocurrency industry. This development could pave the way for increased institutional investment in AVAX and other altcoins, further legitimizing the digital asset space within traditional financial markets.