Grayscale is pushing ahead with a spot Avalanche ETF in partnership with Nasdaq

Grayscale is pushing ahead with a spot Avalanche ETF in partnership with Nasdaq—but the network's native token, AVAX (AVAX-USD), isn't playing along.

Grayscale is applying for a spot Avalanche ETF in partnership with Nasdaq, aiming to provide investors with easier access to the cryptocurrency. However, despite the positive news, the network’s native token, AVAX, has declined by 8.6% to reach $20.50.

Nasdaq filed a 19b-4 form with the U.S. Securities and Exchange Commission on March 28 to list the fund, which, if approved, would allow retail investors to purchase AVAX via standard brokerage accounts. The ETF would hold Avalanche tokens and be a cheaper and more flexible option compared to Grayscale’s existing Avalanche Trust, which has a 2.5% management fee. Coinbase would serve as the fund’s custodian.

This initiative highlights the increasing interest in regulated altcoin products, although the SEC has yet to approve any spot crypto ETFs other than Ethereum.

AVAX is currently trading at approximately $20.12 following a 24-hour decrease of 8.6%. This decline contributes to the broader market downturn.

Earlier this month, VanEck also submitted an application for an Avalanche ETF, and Grayscale applied for a Cardano ETF last month.

When VanEck submitted its application for an AVAX ETF, the token experienced a substantial 55% drop.

However, it’s important to note that the token has since rebounded significantly.

Moreover, in a separate filing on March 23, Grayscale applied for a Stellar (XLM-USD) ETF with the SEC. This move continues Grayscale’s efforts to diversify its offerings beyond Bitcoin (BTC-USD) and Ethereum (ETH-USD).

Furthermore, the firm is applying for a new Bitcoin ETF with the aim of providing investors with a cost-effective and efficient way to gain exposure to the world’s largest cryptocurrency. This initiative follows the approval of several Bitcoin futures ETFs in 2021.

In an interview with Blockworks, Sebastien Neretti, the head of new products at Coins Group, expressed his belief that the approval of a spot Bitcoin ETF would be a pivotal moment for the cryptocurrency industry.

Neretti highlighted that while futures ETFs provide a valuable product, they come with certain limitations, such as higher costs for investors and a focus on short-term price movements.

A spot Bitcoin ETF, on the other hand, would offer investors a more direct and efficient way to invest in Bitcoin, allowing them to participate in the long-term growth of the cryptocurrency.

The approval of a spot Bitcoin ETF would also serve as a validation of cryptocurrency investments in the minds of mainstream investors, further integrating cryptocurrencies into the traditional financial system.

This integration would unlock new opportunities for both investors and the broader ecosystem.

Earlier this year, the SEC rejected applications from both Cathay and Bitwise for a spot Bitcoin ETF. However, both firms have submitted updated applications for the product.

The agency is currently reviewing applications for a spot Ethereum ETF from firms such as Charles Schwab, Coinbase, and Circle.

The SEC has also postponed its decision on an application from WisdomTree for a spot Bitcoin ETF until May 26. This follows an earlier postponement of the application until April 27.