Grayscale Investments has taken another step toward expanding regulated access to Avalanche by filing a second amended S-1 registration statement for its proposed AVAX exchange-traded fund with the U.S. Securities and Exchange Commission.
The updated filing introduces a key change: the fund would be permitted to stake up to 70% of its Avalanche (AVAX) holdings, potentially allowing investors to benefit from on-chain staking rewards in addition to price exposure.
According to the filing, Grayscale plans to convert its existing Avalanche Trust into a spot ETF that would trade on Nasdaq under the ticker symbol GAVX, pending regulatory approval.
The move is designed to transition the product from its current over-the-counter structure, where shares trade under the ticker AVAXFUN, to a more transparent and liquid exchange-listed format.
Grayscale has repeatedly argued that ETF structures provide stronger investor protections and broader market access than OTC vehicles.
If approved, the Avalanche ETF would track the price of AVAX while incorporating staking income into its net asset value. The filing specifies that staking would be subject to operational, liquidity, and risk constraints, with a cap set at 70% of total AVAX holdings.
This approach mirrors a growing trend among crypto asset managers seeking to blend yield-generating blockchain activity with traditional investment wrappers.
Avalanche, a layer-1 blockchain known for its high throughput and subnet architecture, has attracted interest from developers and institutions alike.
Grayscale’s proposed ETF would give both retail and institutional investors a regulated way to gain exposure to the network without directly holding or managing tokens.
The amended filing comes amid a broader wave of crypto ETF applications in the United States, as asset managers push beyond Bitcoin and Ether products toward diversified digital asset exposure.
While the SEC has yet to approve a spot AVAX ETF, Grayscale’s incremental updates signal continued engagement with regulators and a willingness to adapt fund structures to meet compliance expectations.
Market participants view the staking provision as particularly significant, as it could enhance returns relative to price-only products. However, approval timelines remain uncertain, and the SEC has not commented publicly on the amended application.
If cleared, the GAVX ETF would mark another milestone in the integration of proof-of-stake crypto assets into mainstream financial markets.