Bitwise has filed an S-1 form to create a spot Avalanche ETF, joining the growing competition in the alternative cryptocurrency exchange-traded fund market. The filing proposes a regulated investment vehicle that would offer institutional exposure to AVAX through a trust that would replicate its value, using Coinbase as the custodian and the CME CF Avalanche-Dollar index as the price reference. This represents an important step toward the institutionalization of AVAX in traditional financial markets.
Context and structure of the proposed ETF
The fund proposed by Bitwise would be structured as a Delaware statutory trust, which would hold exclusively AVAX in its treasury and replicate its value, minus operating expenses. According to the submitted documentation, the trust would use the CME CF Avalanche-Dollar Reference Rate, calculated daily at 4:00 PM ET, as the benchmark for valuation. Coinbase Custody Trust Company would be responsible for custody, providing an institutional layer of security for investors. This initiative promises to offer liquidity to investors seeking efficient exposure to AVAX.
This filing adds to an increasingly competitive landscape, with firms such as VanEck and Grayscale also submitting applications for AVAX ETFs. This move has market precedents: when Bitwise filed for a Chainlink ETF, the price of LINK saw a 5% rally. Cryptocurrency ETFs like these could increase institutional participation in digital assets.
Market implications and regulatory challenges
Bitwise’s filing carries significant implications for institutional participants, primarily the possibility of exposure to the Avalanche ecosystem through a regulated vehicle under the Investment Company Act of 1940. Centralized custody with Coinbase reduces certain risks but introduces operational dependencies, as detailed in the S-1. Additionally, this could increase institutional credibility for AVAX in the crypto ecosystem.
However, regulatory uncertainty remains a critical factor. The SEC currently has over 70 cryptocurrency ETF applications under review and has extended the decision deadlines for similar funds involving Solana, XRP, and Dogecoin. The case of Bitwise’s Dogecoin ETF is illustrative, with a prolonged review until November 2025.
The final outcome will largely depend on the SEC’s regulatory approach, though analysts anticipate that the approval of these instruments could generate upward pressure on AVAX prices by facilitating the entry of institutional capital into the Avalanche ecosystem. If approved, these funds could transform the cryptocurrency investment landscape, setting an important precedent for future cryptocurrency ETF applications.
