Grayscale Investments has filed with the U.S. Securities and Exchange Commission (SEC) to convert its existing Aave trust into a spot exchange-traded fund (ETF). The filing, submitted on February 13, 2026, proposes the "Grayscale Aave Trust ETF," which would hold AAVE tokens directly and list on the NYSE Arca exchange.
Coinbase has been named as the custodian and prime broker for the proposed fund, responsible for storing the tokens and handling trade execution. This move makes Grayscale the second major asset manager, alongside Bitwise, to seek regulatory approval for an AAVE ETF in the United States. Bitwise filed its own proposal in December 2025.
The proposed ETF structure is designed to give investors direct price exposure to AAVE without relying on futures or synthetic products. Grayscale plans to charge a 2.5% sponsor fee, which will be paid in AAVE tokens. This fee is notably higher than many existing crypto ETFs, reflecting the perceived complexity and risks associated with altcoin investment products.
This filing signals a significant shift in institutional interest beyond Bitcoin and Ethereum, positioning major DeFi tokens like AAVE as the "next frontier" for regulated investment vehicles. Grayscale's strategy mirrors its successful earlier efforts in converting crypto trusts into ETFs, which previously funneled billions of dollars into the market.
AAVE is the native token of the Aave protocol, one of the largest decentralized lending platforms in the cryptocurrency ecosystem, which has facilitated billions of dollars in deposits and loans. A regulated ETF could open the door to substantial new institutional capital, as it removes barriers related to direct custody and compliance that many traditional investors face.
The approval process rests with the SEC and could take several months, with no guarantee of success. Regulators have historically been cautious about single-asset altcoin ETFs. However, the filing demonstrates growing institutional demand for DeFi exposure and, if approved, could pave the way for similar products targeting other major tokens in the decentralized finance sector.
