Grayscale has filed for Avalanche (AVAX) ETF with Nasdaq

Nasdaq has submitted an application for an Avalanche (AVAX) ETF on behalf of Grayscale. Interest in AVAX is returning, and Grayscale is prepared to offer additional products based on the L1 token. 

Grayscale, one of the most active issuers of crypto-based products, has filed for a new ETF based on Avalanche (AVAX). Nasdaq submitted a 19b-4 form on behalf of Grayscale, outlining the fund’s conditions. The recent filing follows a wave of new applications for ETF. VanEck has also recently filed for a similar fund in the past two weeks. 

Grayscale already offers its Avalanche Trust for private placements and accredited investors. The new ETF would be available to retail buyers aiming to gain exposure to AVAX. The fund has just $1.7M in assets under management, while a full ETF may attract more significant buying. Grayscale offers multiple ETP products with exposure to a growing list of assets. However, some of those funds are limited to accredited investors and do not result in demand for the underlying assets.

The ETF will be based solely on the value of AVAX and will not contain a cash component to balance the risk. The Trust for the Avalanche ETF is not an investment company under the definition of the Investment Company Act and has no intentions of actively managing the fund. 

The AVAX ETF will create and redeem baskets of shares, with the possibility of creating or redeeming them in kind for Avalanche tokens. Previous ETFs were mostly cash-settled, though new applications are trying to achieve in-kind settlement. 

Avalanche chain pivots to DeFi

Following the news, AVAX traded in its usual range at $20.54. The asset continued to show weakness following the overall market drawdown. Avalanche is still considered a potential blue-chip project, though the network has lagged following the loss of gaming activity. AVAX is also showing signs of price weakness in the short term. The effect of the actual ETF may not be immediate, and it may take months until the product starts trading. 

$AVAX ETF announced, and this is what happened:

Gentlemen it was nice knowing y’all pic.twitter.com/vh0mb7rWSY

— contrarian snow ❄️ (@contrarian_snow) March 28, 2025

After filing the 19b-4 form, the US Securities and Exchange Commission has 90 days to approve or reject the filing. Even with procedures launched on many potential ETFs, the launch may still take time. Even now, launching a successful ETF beyond BTC and ETH takes months from filing to completion.

The Avalanche project aims to recover its influence as Web3 gaming and GameFi are returning. The chain also works as an all-purpose Layer1 for decentralized apps. 

Avalanche offers one of the most viable infrastructures for Web3 projects. Previously, the chain carried NFT games like Crabada. The network offered its C-Chain, an all-purpose EVM-compatible network. Additionally, crypto projects could launch subnets with their own tokens. 

After Web3 games slowed down, Avalanche pivoted to DeFi. The chain still carries $1.16B in value locked, as well as $1.93B from stablecoin inflows. Avalanche is relatively liquid, receiving $74.19M from Ethereum. 

Avalanche aimed to boost adoption through its top ecosystem app, the Core Wallet. The Core Wallet now covers gas fees for all Avalanche C-Chain users to widen adoption. The zero-fee feature was added after the wallet’s latest update in March.

The chain carries its own versions of Aave and other decentralized apps, including the GMX perpetual futures DEX. The chain carries close to 170K daily active users, with the most traffic coming from its DEX, Odos, as well as Aave and Uniswap versions. Games and NFT hubs have slowed down their activity significantly since the boom in 2021.

The chain still generates around $640K in fees from its main apps. Based on Token Terminal data, Avalanche achieved positive net returns for the first three months of 2024.

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