Grayscale Submits Files to Transform Avalanche Trust into an ETF

Crypto asset manager Grayscale has submitted a registration statement for its Avalanche Trust to the U.S. SEC on Friday, aiming for approval to “uplist” the investment vehicle into a full-fledged exchange-traded fund.

Originally introduced last year as a private placement for accredited investors, this product will provide exposure to Avalanche’s spot price on the Nasdaq, while the fund’s coins are secured by crypto exchange Coinbase, as outlined in an SEC filing.

Friday’s filing marks another advance in the approval process for Avalanche-focused funds, as asset managers seek to create similar products for other altcoins such as Solana and XRP.

In March, the Nasdaq filed a 19b-4 form for Grayscale to list shares of its Avalanche Trust. VanEck, a crypto asset manager, established a trust company for an Avalanche fund in Delaware recently and is pursuing a spot Avalanche ETF in the U.S.

In June, the SEC delayed VanEck’s application, extending the timeline for a decision. Other cryptocurrency applications have encountered similar delays.

In July, the Commission allowed Grayscale to list an ETF including Solana, XRP, and Cardano, but the rollout was suspended. The SEC later announced that it had approved an order that promotes a “merit-neutral approach” for certain crypto-focused ETF applications. Experts predict a wave of approvals in October, following the introduction of spot Bitcoin and Ethereum ETFs in the U.S. last year.

Bloomberg ETF Analyst James Seyffart estimated a 90% probability that Avalanche ETFs will gain approval in the U.S. this year. He assigned similar odds to applications for ETFs featuring Dogecoin, Cardano, Polkadot, and HBAR.

Avalanche currently ranks as the 22nd largest cryptocurrency by market cap, valued at $10 billion, per crypto data provider CoinGecko. On Monday, the token’s price dipped to $24, reflecting a 7.6% decline over the previous day.

In April, investment bank Standard Chartered forecasted that the token could reach $55 by year’s end and $250 by decade’s end, citing its innovative scaling methods through app networks, formerly termed subnets. AVAX previously peaked at nearly $155 back in 2021.

Avalanche is a prominent layer-1 network for decentralized finance (DeFi), with nearly $2 billion in assets utilized in DeFi applications on Monday, as reported by crypto data provider DefiLlama.