Grayscale is moving ahead with its plans to turn its Avalanche Trust into a spot exchange-traded fund (ETF), filing an S-1 registration statement with the U.S. Securities and Exchange Commission on Friday. If approved, the fund would trade on Nasdaq, giving traditional investors easier access to the AVAX token through a regulated vehicle.
Grayscale Moves to Convert Avalanche Trust Into Spot ETF
Grayscale Investments filed a registration statement with the U.S. Securities and Exchange Commission that aims to convert its existing Avalanche Trust into a publicly traded spot ETF on Nasdaq, providing regulated exposure to AVAX, the native token of the Avalanche blockchain, according to the S-1 filed on Aug. 22.
Avalanche is a proof-of-stake Layer 1 blockchain focused on fast finality and known for its “subnets” architecture. Under the S-1, creations and redemptions would occur via authorized participants in cash, with Coinbase providing prime brokerage services around spot AVAX execution and custody. BNY Mellon is slated to be the administrator and transfer agent.
Grayscale said the Avalanche trust will remain a passive vehicle designed to mirror the price of AVAX, while also reflecting any AVAX earned via staking, if certain conditions are met and staking is implemented. The trust won’t use leverage, derivatives, or similar strategies and does not aim to generate returns beyond tracking AVAX and any eligible staking rewards.
If staking proceeds, the issuer expects to keep up to 85% of the trust’s AVAX staked at all times, subject to the staking condition. During staking, the provider cannot transfer unstaked AVAX or any staking consideration to another Avalanche address, according to the filing.
The product adds to Grayscale’s push to expand beyond bitcoin and ether vehicles. Currently, the firm manages two of the largest spot BTC ETFs with $25 billion in cumulative assets. It also issues the second-biggest ether fund on Wall Street, which boasts over $5 billion in assets, The Block’s data dashboard shows.
Earlier this month, NYSE Arca filed a rule change to list and trade shares of the Grayscale Dogecoin Trust as a spot ETF. Nasdaq submitted 19b-4 documents with the SEC to list and trade shares of Grayscale’s proposed Avalanche ETF back in March. The issuer is also bidding to launch funds for assets like SOL, ADA, and LTC, and has pressed the SEC for permission to debut its multi-crypto fund.
Several other firms are also vying to enlarge the digital asset ETF cohort in the U.S., especially as President Donald Trump’s pro-crypto administration installs friendly rules for the industry. Asset managers, including Grayscale, Bitwise, Canary, CoinShares, Franklin, 21Shares, and WisdomTree, filed amendments to their proposed spot XRP ETFs on Friday. Bloomberg Intelligence ETF analyst James Seyffart said the move was expected but a “good sign.”
Separately, Grayscale’s corporate roadmap has advanced this year with founder Barry Silbert returning as chairman and the company preparing for a potential initial public offering via confidential SEC filings.
Last month, Grayscale Investments confidentially submitted a draft S-1 registration statement to the SEC, indicating plans for an initial public offering (IPO). However, the crypto asset manager did not disclose details of the submission, which will proceed after the SEC’s review and market conditions.
AVAX was down over 4% on Monday at $24 per coin and a $10 billion market cap.
