Grayscale along with Nasdaq has filed for an approval of a spot Avalanche ETF from the U.S. Securities and Exchange Commission (SEC). With the filing of Form 19b-4, Grayscale wishes to convert the existing Avalanche Trust into a publicly traded exchange-traded Fund (ETF).
With this exchange-traded fund (ETF), investors will be able to have exposure to the token without having to hold custody of the token. The AVAX token is currently the 17th largest cryptocurrency by market capitalization which is valued approximately at $8.41 billion.
Why is there a need of ETF Filing?
Since the beginning of this year, many asset managers have been wanting to launch ETFs tied to various altcoins, specially after SEC approved Bitcoin and Ethereum ETFs.
Grayscale wants to offer more ways for investors to invest in cryptocurrencies through traditional stock exchange, making it more accessible and convenient for the investors. Also, ETFs are regulated and traded on major exchanges, which provides it a layer of security and legitimacy and hence the asset manager decided to file for this ETF.
The ETF also becomes a vehicle through which the institutional investors and individual investors can easily track the spot price of the AVAX token. This feature usually leads to an increased institutional interest in the token and enhances its visibility in the financial market.
The company already has a product for investing in Avalanche called the Grayscale Avalanche Trust which was launched back in August 2024, which if approved, will be turned into a spot AVAX ETF.
Price Impact
Despite this development, the price of the AVAX token has not reacted significantly since the announcement broke out. However, there has been a slight uptick in the price of the token as the token experienced a surge of 1.3% in the past hour. With this uptick, the price of the token currently stands at $20.55 as per CoinGecko.
Historically, whenever such announcements are made there is an significant uptick in the price of the token but here according to various analysts, the price uptick or immediate response also depends on broader market conditions and investor sentiments.
As per CoinGecko, there has been a significant dip in the market capitalization of cryptocurrencies which is somewhere around 4.6% in the last 24 hours. This drop can be attributed to the recent escalating trade tension and other macroeconomic concerns after Donald Trump’s trade tariffs were revised and soon to be implemented.
Additionally, there has been mass liquidations, where approximately $62 million in long positions have been liquidated for Bitcoin alone in the past 24 hours.
Grayscale’s filing is in line with the recent applications from other firms like VanEck, which is also seeking SEC approval for spot AVAX ETF. This increased amount of application indicates increased interest in diversified crypto investment options as traditional finance slowly accepts and embraces digital assets.
If this request is approved, Grayscale’s ETF could pave way for other cryptocurrencies into the mainstream financial products.
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