Grayscale Investments has submitted an updated S-1 registration statement to the U.S. Securities and Exchange Commission (SEC) for its proposed spot Avalanche (AVAX) exchange-traded fund (ETF). The filing aims to convert the existing Grayscale Avalanche Trust into an ETF, seeking approval to list on the Nasdaq under the ticker symbol GAVX.
The updated filing introduces a significant new feature: a strategy to stake up to 70% of the fund's AVAX holdings on the Avalanche Network. This move is designed to generate staking rewards, which would be passed on to investors, offering a potential source of passive income in addition to exposure to the asset's price appreciation. This reflects a growing trend among crypto ETF issuers to incorporate yield-generating mechanisms.
The trust currently holds approximately $7.1 million in assets. Grayscale serves as the sole sponsor, with Coinbase Custody Trust Company, LLC listed as the custodian. The filing details an in-kind creation and redemption model, which is a standard structure for spot crypto ETFs. The news has coincided with a positive price movement for AVAX, which saw an increase of over 9% in the week leading up to the announcement.
This filing follows similar amended proposals from other asset managers, including VanEck and Bitwise, who have also updated their Avalanche ETF filings to include staking rewards. Grayscale's action signals continued institutional interest in bringing Avalanche-based financial products to traditional markets, though it also underscores the ongoing regulatory challenges in gaining final SEC approval for such products.
