Nasdaq has formally submitted a request to the US Securities and Exchange Commission (SEC) to list and trade an exchange-traded fund (ETF) focused on Avalanche ($AVAX).
The proposed ETF, managed by Grayscale, seeks to transition the existing Grayscale Avalanche Trust into a regulated investment product, offering easier access to $AVAX for institutional and retail investors.
Grayscale already provides indirect exposure to Avalanche through its Digital Large Cap Fund (GDLC), which includes multiple cryptocurrencies such as Bitcoin ($BTC), Ethereum ($ETH), Solana ($SOL), and XRP ($XRP).
However, converting its Avalanche Trust into a dedicated ETF would allow investors to gain direct exposure to $AVAX without needing to buy and store the asset themselves.
Avalanche operates as a smart contract platform designed to prioritise scalability, security, and decentralisation.
It supports the tokenisation of real-world assets, a rapidly growing sector in blockchain technology. Grayscale has highlighted these characteristics as key factors behind its decision to structure an $AVAX-based ETF.
However, Grayscale is not the only firm pursuing an Avalanche ETF. VanEck has also filed a similar application with the SEC, indicating strong institutional interest in regulated cryptocurrency investment products.
As demand for alternative digital asset investment options rises, Grayscale aims to expand its offerings, which already include trusts for cryptocurrencies such as XRP, Solana, Litecoin, and Polkadot ($DOT).
Despite the ETF application, market conditions remain unfavourable for Avalanche. $AVAX has seen a decline of around 8% in the past 24 hours, with the token trading slightly above $20.
The final decision on Grayscale’s application rests with the SEC, which will assess the proposal’s compliance with regulatory requirements. Approval could influence institutional adoption and the broader market performance of $AVAX.
Nasdaq’s 19b-4 filing
Nasdaq’s request to list and trade Grayscale’s Avalanche ETF was submitted through a 19b-4 form, a necessary step in the SEC’s approval process for new ETFs.
Once acknowledged, the proposal will be published in the Federal Register, initiating a review period that determines whether the product can move forward.
Grayscale’s approach follows a similar path to its Bitcoin and Ethereum ETFs, which were previously approved by the SEC.
If the regulatory body grants approval, the Grayscale Avalanche Trust—originally launched in August 2024 as a private placement—would convert into a spot ETF, directly tracking the price of $AVAX.
The filing states that the trust’s assets consist exclusively of $AVAX, with its share value reflecting the market price of the token, minus expenses and liabilities.
Coinbase has been named as the custodian for the trust, while BNY Mellon Asset Servicing is expected to handle administration and transfers.
Nasdaq’s submission follows VanEck’s own bid for an Avalanche ETF, highlighting the race among asset managers to secure regulatory approval for crypto investment products.
As institutional interest grows, firms are actively seeking ways to introduce compliant and accessible crypto-based financial instruments.
Changing regulatory landscape
The increasing number of ETF applications reflects the shifting regulatory stance on cryptocurrency in the United States. Since Donald Trump’s reelection, there has been a surge in new spot crypto ETF filings beyond Bitcoin and Ethereum.
The SEC had previously approved spot Bitcoin ETFs in January 2024 and Ethereum ETFs in July 2024.
A number of asset management firms, including Grayscale, Fidelity, Franklin Templeton, Bitwise, 21Shares, and Canary Capital, have submitted ETF applications for various digital assets.
These filings include proposals for products tracking Solana, XRP, Cardano ($ADA), Dogecoin ($DOGE), and Litecoin ($LTC).
The SEC’s regulatory approach has also undergone changes. Under the leadership of former Chair, Gary Gensler, the agency was frequently criticised for its enforcement-driven stance on cryptocurrency.
Gensler stepped down in January following the presidential inauguration, and Trump has nominated Paul Atkins, a former regulator with a crypto-friendly reputation, to lead the SEC. Atkins’ appointment is pending Senate confirmation.
Meanwhile, the SEC has announced the formation of a specialised cryptocurrency task force, led by Commissioner Hester Peirce.
The group aims to establish a clearer regulatory framework for the cryptocurrency industry, potentially shaping the future of crypto ETFs and other digital asset investment products.
As the regulatory process unfolds, investors and market participants will closely monitor developments surrounding Grayscale’s Avalanche ETF application.
Approval could mark a significant step in the broader acceptance of Avalanche as an institutional asset while influencing $AVAX’s market trajectory.
However, the SEC’s decision remains uncertain, with multiple factors at play in the evolving landscape of crypto regulation.
