Nasdaq Preps to Trade Grayscale's Avalanche Crypto Shares Soon
Published Date: 4/16/2025
Notice
Summary
Nasdaq wants to start trading shares of the Grayscale Avalanche Trust (AVAX), a new kind of investment tied to the Avalanche cryptocurrency. This change means investors can buy and sell AVAX shares on Nasdaq soon, making it easier to invest in this digital asset. The proposal was filed in March 2025 and is now open for public comments before it goes live.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 3 costs, 0 mixed.
AVAX Shares Listed on Nasdaq
Nasdaq filed to list and trade shares of the Grayscale Avalanche Trust (AVAX) on March 27, 2025, and the SEC published the notice on April 16, 2025. If approved, investors will be able to buy and sell AVAX Shares on Nasdaq as a way to get exposure to the Avalanche token without directly holding the token.
Underlying AVAX per Share Declines Over Time
Each Share represents a pro rata interest in the Trust's AVAX, but the number of AVAX represented by a Share will gradually decrease over time because the Trust uses AVAX to pay the Sponsor's Fee and other Trust expenses (the Sponsor's Fee accrues daily at an annual rate to-be-determined).
Redemptions Require SEC and Sponsor Approval
The Trust may transfer AVAX in exchange for Baskets surrendered for redemption only subject to obtaining regulatory approval from the Commission and approval of the Sponsor. That means redemptions in AVAX are conditioned on SEC approval and Sponsor authorization.
Cold-Storage Custody and Key-Shard Security
The Trust's AVAX will be custodied by Coinbase Custody Trust Company with private keys generated offline (in Faraday cages using quantum random number generators), encrypted, split into shards, and stored geographically in secure vaults using cold storage. The filing says these procedures are intended to remove single points of failure.
Daily NAV and 4:00 p.m. Index Pricing
The Trust will calculate and publish its NAV each business day at 4:00 p.m., New York time, using the Index Price, which is the U.S. dollar value of AVAX derived from Constituent Digital Asset Trading Platforms reflected in the CoinDesk AVAX reference rate.
Index Methodology and Constituents Can Change
The Index Price is a real-time, volume-weighted composite calculated every 5 seconds from Constituent Trading Platforms (as of December 31, 2024 these included Bitstamp, Bullish, Bybit, Crypto.com, Gemini, Kraken, and OKX). The Index uses an outlier detection rule (prices deviating +/-5% are treated as outliers) and the Index Provider may change calculation methodology or constituent venues (with scheduled quarterly reviews) at its discretion.
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