Grayscale Initiates Efforts for Nasdaq Listed Avalanche ETF Amid AVAX Price Decline

By: Eliza Bennet

Grayscale Investments is advancing its initiative to introduce a spot Avalanche exchange-traded fund (ETF), despite the recent decline in AVAX’s market value. According to filings, Nasdaq has applied to list Grayscale Avalanche Trust shares as an ETF with the US Securities and Exchange Commission (SEC) on March 27. The move aims to enhance regulated cryptocurrency investment products, especially those related to advanced blockchain infrastructures like Avalanche.

The Avalanche ETF's goal is to reflect AVAX's market value—Avalanche's native token—via a benchmark index. Although this offering does not allow direct AVAX holding, it provides a cost-effective and technically streamlined investment option compared to self-custody or cryptocurrency exchanges. CSC Delaware Trust Company will be the fund's trustee, and Coinbase Custody Trust Company takes charge of custodial services. Meanwhile, BNY Mellon will handle administration and transfer agent duties, while Foreside Fund Services and CoinDesk Indices, Inc. are managing marketing and index tracking respectively.

This ambition for a spot ETF is coupled with the prospect of transforming Grayscale's existing Avalanche Trust into a publicly traded product, which currently manages $1.7 million in assets with a 2.5% annual fee. It forms part of a larger industry trend where institutional interest in Avalanche is growing, as evidenced by other firms like VanEck filing for similar products. Emin Gün Sirer, founder and CEO of Ava Labs, welcomes the focus on AVAX ETFs, highlighting that they offer investors an innovative way to interface with blockchain technology without requiring extensive technical knowledge.

Nasdaq's filing to the SEC is perceived as a strategic step in broadening regulated crypto investments. Grayscale’s website emphasizes that such SEC-reporting products provide a credible case for uplisting when the U.S. regulatory environment permits, as the ETF’s conversion from its close-ended fund would enhance asset value tracking due to inherent arbitrage mechanisms. The movement signals potential shifts in how cryptocurrency assets are integrated into more traditional financial systems, as Grayscale and other firms explore similar pathways for a variety of cryptocurrencies.