Nasdaq asks for SEC approval to list Grayscales AVAX ETF

Nasdaq has submitted an official request to the Securities and Exchange Commission (SEC) to list the Grayscale AVAX Trust as a spot ETF.

The objective of the proposal is to transform the closed-end fund AVAX, active since August 2024, into an exchange-traded and fully regulated fund.

Grayscale thus strengthens its expansion strategy in the digital asset ETF sector, aiming to offer more transparent, competitive, and accessible products.

Below is a detailed analysis of the project and the implications for the market.

What is the Grayscale AVAX Trust and how the ETF would work

On March 27, 2025, Nasdaq filed a proposal with the SEC to initiate the process of converting the Grayscale Avalanche Trust into a spot ETF. Currently, the fund operates as a private vehicle, with shares traded only on the secondary market.

The transition to ETFs would allow for a price more aligned with the value of the underlying assets, thanks to the arbitrage model permitted by ETFs, thus reducing the premium or discount on the net asset value.

According to data reported by Grayscale, at the time of the request, the trust holds assets amounting to approximately 1.76 million dollars. Each share represents about 0.49 AVAX and the net asset value per share is 10.86 dollars, compared to a current market price of 10.11 dollars.

This equates to a premium of 7.4%, which the company considers excessive and likely to decrease with the conversion.

We remind you that Avalanche is a blockchain of the new generation focused on scalability, interoperability, and fast transactions.

Widely used in the DeFi and NFT sectors, AVAX is the native token of the network and represents a solid alternative to Ethereum in terms of utility, time-to-finality, and decentralization.

The ETF strategy of Grayscale: between diversification and cost competition

Grayscale currently offers 28 cryptocurrency-related investment products, including 25 single-asset trusts (such as Bitcoin, Ethereum, Litecoin, and now AVAX) and 3 diversified thematic funds.

The company is accelerating on the regulatory front, with active requests for spot ETFs also on XRP and Cardano, a sign of long-term planning aimed at covering a wide spectrum of the crypto universe.

In recent months, Grayscale has received approval to convert two closed-end funds into spot ETFs: the Grayscale Bitcoin Trust (GBTC) and the Ethereum Trust (ETHE).

Furthermore, it launched the “Mini” versions of both. That is, the Bitcoin Mini Trust (BTC) and the Ether Mini Trust (ETH), created with the aim of offering lower management costs and attracting cost-conscious investments.

Despite the regulatory success, the Grayscale Bitcoin Trust has experienced a significant erosion of capital.

Since its launch as an ETF on January 11, 2024, GBTC has recorded outflows of over 21 billion dollars. Thus representing the only Bitcoin ETF to close with a net negative flow in the United States during the same period.

The crucial point is the fees: GBTC applies an annual cost of 1.5%, much higher than the industry average.

For comparison, the Bitcoin Mini Trust by Grayscale offers an annual fee of 0.15%. All of this is in line with the benchmark of the cheapest ETFs (between 0.19% and 0.25%).

The same applies to Ethereum: the “Mini” version of the trust has already attracted more interest thanks to a much more competitive fee profile.

In any case, the request for conversion of the Grayscale Avalanche Trust fits into a broader context. That is, a context in which asset managers are exploring ways to make the world of criptovalute accessible through traditional but fully regulated instruments.

If approved, the ETF on AVAX would mark an important precedent for the development of products related to emerging tokens but with solid technological foundations and active communities.

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Why AVAX？

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Grayscale has chosen to focus attention on Avalanche as an active blockchain in strategic areas such as decentralized finance (DeFi), Web3 gaming, and NFTs.

The network is valued for its high throughput, fast finality, and modularity thanks to the subnet structure. An ETF on AVAX would thus expand the range of exposure for institutional investors beyond the usual Bitcoin and Ethereum.

However, the regulatory context remains the main obstacle, but also the greatest opportunity. With an SEC increasingly pressured by requests for ETFs on alternative cryptocurrencies, the approval of AVAX could pave the way for similar products on SOL, DOT, MATIC, or LINK.

Grayscale, already ahead with XRP, Litecoin, and Cardano, intends to leverage the logistical and regulatory experience accumulated to maintain a competitive advantage.

In other words, with this initiative, Nasdaq and Grayscale demonstrate the willingness to build a new generation of financial products driven by digital assets but fully integrated into regulated circuits.

The outcome of the request with the SEC will determine not only the future of the ETF on Avalanche, but will serve as a litmus test for the interest in alternative assets in a regulated format.

In a period in which competition is played out on costs, transparency, and compliance, Grayscale tries to move with strategic timing. Anticipating a potential regulatory expansion and consolidating its role in the bull and bear market of cryptocurrency ETFs.

The decision is now in the hands of the SEC. But for the sector, the mere act of submitting the request marks a key step towards a new operational maturity.