- Grayscale files for a spot Avalanche ETF through Nasdaq and seeks SEC approval
- Institutional interest in AVAX grows as VanEck also submits an ETF filing
- Coinbase Custody will manage AVAX holdings with Nasdaq’s market safeguards
Nasdaq has filed a 19b-4 form with the U.S. Securities and Exchange Commission (SEC) to list and trade shares of the proposed spot Avalanche exchange-traded fund (ETF) from Grayscale Investments. The approved ETF will grant investors access to Avalanche native token AVAX through traditional brokerage accounts.
Grayscale seeks the SEC to authorize the conversion of its existing Avalanche Trust into a publicly traded Exchange-Traded Fund. The spot Avalanche Trust started under private placement in August 2024 and controls about $1.76 million in assets. Grayscale seeks to expand AVAX market access through a regulated investment fund listed on a major United States trading exchange.
Institutional Interest in Avalanche Grow
The new SEC filing from Grayscale comes right after VanEck submitted the S-1 registration statement for the AVAX ETF. The rising demand for institutional-quality exposure to cryptocurrency has boosted market interest in Avalanche-based investments.
Grayscale has filed applications for spot ETFs concentrating on Solana, Litecoin, Polkadot, and XRP. The SEC-reporting investment products create an approved basis for uplisting when regulatory conditions permit. The success of Bitcoin and Ethereum spot ETFs earlier last year provides the basis for Grayscale and other companies to pursue more cryptocurrency ETFs.
Market Structure and Regulatory Considerations
A recent filing showed that the proposed ETF contains AVAX as its direct holding asset, which would be under Coinbase Custody Trust Company custody management. BNY Mellon is expected to serve as the administrator and transfer agent. The daily net asset value (NAV) trust will be calculated using an index price derived from multiple regulated crypto exchanges, including Kraken, Bitstamp, and Crypto.com.
The Nasdaq implemented measures to prevent market manipulation by partnering with Coinbase Derivatives, which offers AVAX futures. According to the document, the connection between spot markets and futures is vital in detecting potential price manipulation. As part of the proposal, the trading system will employ circuit breakers to stop market fluctuations during high volatility, requiring real-time disclosure of holdings and net asset value (NAV).
The SEC approval of the ETF would make this spot AVAX product available to major U.S. exchange users as their first option. The waiting period for the expected decision from the SEC will span between 45 and 90 days. The regulatory approval would advance the evolution of investing vehicles with cryptocurrency regulation and ensure institutional entities gain entry to Avalanche’s blockchain network.
