Grayscale Investments has submitted an S-1 application to the U.S. Securities and Exchange Commission (SEC) for the conversion of Grayscale Avalanche Trust into a spot ETF. This move is a logical continuation of the firm’s strategy, which has previously undertaken similar actions with its Bitcoin and Ethereum-based funds.
This is reported by Finway
Details of the Application and Structure of the Future ETF
The Avalanche (AVAX) Trust was launched by Grayscale Investments in August 2024 as a closed fund, with investments focused exclusively on a single asset. Over time, the company has significantly expanded its ETF lineup, adding products based on other altcoins, and does not plan to stop there, intending to introduce even more funds targeting various cryptocurrencies in the future.
In the S-1 application submitted on August 22, 2025, it is stated that the issuance and redemption of trust shares will be conducted exclusively in cash. Custodial services for the product will be provided by Coinbase, while the roles of manager and transfer agent will be performed by BNY Mellon.
Staking Opportunities and Market Competition
Among the features of the new ETF is the potential for generating additional income through staking — the company plans to utilize up to 85% of the assets under management for this purpose, pending regulatory approval of the corresponding product.
In addition to Grayscale Investments, another company, VanEck, has expressed interest in creating a similar AVAX-based fund and has also submitted a corresponding application to the SEC. VanEck’s documents also mention the possibility of using staking for additional income.
“According to the S-1 application submitted to the SEC on August 22, 2025, the issuance and redemption of trust shares will be conducted in cash. Coinbase will act as the custodian, while BNY Mellon will serve as the manager and transfer agent.”
Market analysts expect that the first spot ETFs based on altcoins may be approved in the fourth quarter of 2025; however, it is likely that funds based on XRP will be the first to hit the market.