Grayscale Pushes to Convert Avalanche Trust Into Spot ETF

Grayscale is moving forward with plans to transform its Avalanche Trust into a regulated spot exchange-traded fund (ETF), filing an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) on Friday. If approved, the ETF would trade on Nasdaq and give investors direct, regulated access to Avalanche’s native token, AVAX.

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A Second Step Toward Conversion

The S-1 filing marks the second regulatory milestone in the conversion process, following Grayscale’s 19b-4 filing in March. The proposed ETF would operate on a cash creation and redemption model, with Coinbase providing prime brokerage and custody services and BNY Mellon serving as administrator and transfer agent.

Grayscale first launched the Avalanche Trust in August 2024, managing exposure to one of the fastest-growing Layer 1 blockchains outside of Bitcoin and Ethereum. The fund currently holds just under $15 million in assets, with its net asset value per share down to 12.20%—a decline from December highs as AVAX’s price fell in line with broader market weakness.

Avalanche’s Growing Institutional Appeal

Avalanche is a proof-of-stake Layer 1 network known for its subnet architecture, which allows developers to build customizable, application-specific chains while maintaining interoperability with the core Avalanche ecosystem.

Institutional attention around Avalanche has increased in recent months. Visa integrated Avalanche into its stablecoin settlement system, while the launch of the Avalanche Visa Card enables users to spend AVAX and stablecoins like USDC directly. These integrations have positioned Avalanche as one of the few non-Ethereum chains gaining traction among traditional financial players.

Still, AVAX faces headwinds. The token currently trades around $24.25, down 9% over the past year and more than 55% below its December all-time high of $54.11.

A Competitive ETF Race

Grayscale isn’t alone in its bid. VanEck and other asset managers have also filed for AVAX ETFs, reflecting growing confidence that investors are ready to look beyond Bitcoin and Ethereum when it comes to regulated fund exposure.

If approved, Grayscale’s AVAX ETF would be among the first U.S.-listed products to track a smart contract blockchain outside the crypto majors. For traditional investors, it could represent a shift toward more diversified digital asset strategies—allocating not just to top-layer tokens like BTC and ETH, but also to networks powering next-generation applications and infrastructure.