Avalanche Spot ETF: Expanding institutional access to AVAX

Launched in 2020, Avalanche (AVAX) is one of the cryptocurrency industry's major Ethereum virtual machine (EVM)–compatible blockchains. Its native coin, AVAX, ranks among the top assets in the market, in 16th position by market cap as of Mar 25, 2025.

After the US Securities and Exchanges Commission (SEC) approved Bitcoin (BTC) Spot exchange-traded funds (ETFs) in early 2024 and Ethereum (ETH) ETFs in mid-2024, several other prominent altcoins, including AVAX, are now vying for the same privilege.

In March 2025, VanEck, one of the major investment fund managers in the world, applied to the SEC to approve its newly registered Avalanche Spot ETF. With this application, AVAX joins XRP (XRP), Litecoin (LTC), Solana (SOL) and Polkadot (DOT) as one of the altcoins seeking spot ETF status. If approved, the AVAX ETF will mean a significant milestone for the project, likely strongly affecting the coin's market performance. The project’s team, backers and VanEck are all keeping their fingers crossed for approval. Current AVAX HODLers are another group that’s eager to see the application receive a nod from the SEC.

Many others in the crypto community are also keeping an eye on the application, although it’s unclear whether the approval process will be a swift affair or a long-winded marathon. The SEC has historically drawn out the Bitcoin ETF approval process over several years, sometimes delaying approvals with vague reasons yet also raising valid concerns at times. 

AVAX’s ETF approval might follow a similar trajectory. On the other hand, the new US administration of Donald Trump is widely viewed as crypto-friendly, particularly after the recent announcement of the planned US crypto strategic reserve. While AVAX isn’t among the coins included in the fund, the general crypto-friendly stance of the new administration raises hopes for a quick and painless approval process.

In this article, we’ll cover VanEck’s AVAX Spot ETF, the implications for its potential approval and what it means for the future of AVAX and the Avalanche blockchain in general.

Key Takeaways:

• The Avalanche Spot ETF is an ETF product based on the AVAX cryptocurrency, registered by the VanEck investment firm and submitted for approval to the US SEC in mid-March 2025.

• If approved, the ETF would create access to AVAX for institutional and retail investors through the regulated environment of stock exchanges.

What is the Avalanche Spot ETF?

The Avalanche (AVAX) Spot ETF is an ETF product registered in the US state of Delaware by the VanEck investment management firm. As of Mar 25, 2025, it's under review by the SEC, America’s primary financial regulator. If approved, the ETF will trade on regulated US stock exchanges. It will consist of AVAX crypto currency, and will track the MarketVector™ Index's Avalanche Benchmark Rate. VanEck submitted the application in mid-March 2025, and if cleared it will be the first Avalanche Spot ETF on the market.

How would the Avalanche Spot ETF work?

The Avalanche Spot ETF would allow investors to access AVAX through regulated markets. Like any other ETF, the AVAX ETF would be available for trading on stock exchanges during market hours, and over-the-counter (OTC). This would create opportunities for many investors, particularly institutional investors who couldn’t buy the crypto before due to regulatory barriers.

The Avalanche Spot ETF would offer investors direct exposure to AVAX, unlike derivative products such as crypto futures. Another advantage would be that ETFs are highly liquid, offering easy access through regulated exchanges. Investors would also avoid the complexities of buying, selling and holding AVAX through the blockchain system. For many investors who aren’t familiar with crypto, setting up wallets and dealing with blockchain can be a hassle. An AVAX ETF would allow them to simply buy and sell it for fiat, based on the value of the ETF at that time.

In theory, the SEC might approve the option for in-kind redemption (i.e., ETF shares are exchanged directly for AVAX tokens), or cash-based redemptions (whereby ETF shares are bought or sold for fiat currency). However, this is unlikely to occur, at least in the initial period after the approval. So far, even Bitcoin Spot ETFs — the first crypto ETF products approved by the SEC — have largely followed the cash redemption model. Thus, direct in-kind redemption for AVAX coins isn’t expected following the approval.

Current landscape of Avalanche Spot ETFs

There are currently no spot ETFs based on AVAX approved by the SEC. If VanEck’s application is successful, it will be the first Spot Avalanche ETF on the market.

As of now, the SEC has approved Spot Bitcoin ETFs, with the first approvals announced in January 2024, and Spot Ethereum ETFs, which were cleared in mid-2024. Several other altcoins, including SOL, XRP, LTC and DOT, are also seeking ETF approval. The AVAX ETF is the latest among these applications.

At the same time, there are also approved futures-based crypto ETFs, which predate their spot counterparts. The first one among Bitcoin futures ETFs, ProShares Bitcoin Strategy ETF (BITO), was approved in October 2021. Meanwhile, the first Ethereum futures ETFs were approved two years later, in October 2023. However, there have never been AVAX futures ETF applications to the SEC. Thus, if approved, VanEck’s Avalanche Spot ETF will be the first AVAX-based ETF on the market.

Current impact of Avalanche ETF applications on the crypto market

The news of VanEck’s application to the SEC first surfaced on Mar 14, 2025. Some observers might have anticipated that the news would positively influence AVAX's price. However, AVAX's price remained sideways for some time afterward. Its recent increase on Mar 24, 2025, was likely driven by positive market sentiment following the Federal Open Market Committee (FOMC) meeting in which officials unanimously voted to maintain interest rates at 4.5%. Over the past week, AVAX's price trajectory has closely mirrored Bitcoin’s and the broader crypto market. This suggests that investors haven’t significantly reacted to the news, possibly expecting the SEC to take its time reviewing the application.

Source: CoinGecko

The SEC is known for dragging out reviews of crypto ETF submissions. Approval could take months or even years if the regulator raises concerns over any aspects of the application. A fun fact in the crypto folklore is that it took the SEC a decade to approve Bitcoin Spot ETFs, from when the first of these products' applications were submitted in 2013 to the first approvals in January 2024. Naturally, this was during quite a different era, when crypto was still emerging as a financial asset.

The crypto landscape in 2025 is drastically different. Given that the SEC has already established a procedure for crypto spot ETF approvals, it’s unlikely that VanEck's AVAX ETF application will face multi-year delays. Now that the SEC has a history of clearing crypto spot ETFs, the process will likely be much shorter.

What will it mean if an Avalanche ETF application is approved?

If the application is approved, it's likely to spark increased interest in AVAX from institutional investors. Due to regulatory constraints, many of these investors have so far stayed away from crypto, including AVAX. The Avalanche Spot ETF would provide them access to the coin through the regulated environment of stock exchanges. This influx of institutional investment may well lead to price appreciation for AVAX. 

While this price effect isn't guaranteed, historically, such ETF approvals have had a significant impact on the prices of cryptocurrencies. For example, when the SEC approved Bitcoin Spot ETFs on Jan 10, 2024, BTC was trading at around $46,600. Following the approval, Bitcoin's price surged, crossing the $70,000 barrier two months later.

The approval of the AVAX Spot ETF could also attract more institutional interest in the Avalanche blockchain as a technology platform. Avalanche has already partnered with notable financial players, including JPMorgan and Mastercard, to provide blockchain-based services. Approval of the ETF could lead to further partnerships and integrations between the Avalanche chain and financial institutions and companies in other industries.

The bottom line

The potential approval of the Avalanche Spot ETF could significantly change the crypto ETF landscape. If VanEck's application is cleared, it may also create an easier route for subsequent crypto ETF applications for smaller coins. Thus, the implications could be far-reaching. The AVAX coin will also likely experience price growth, as it will no longer be restricted to trade on crypto exchanges only, and will enter the lucrative domain of institutional investing through stock exchange platforms.

The potential Avalanche Spot ETF is also in the company of several other altcoin-based ETFs awaiting approval by the SEC. Thus, the collective nature of these applications puts further pressure on the US financial regulator. 

If the SEC is reluctant to quickly clear all of these ETFs, it will need a highly plausible reason to justify its position. In the atmosphere of the maturing crypto market and past approvals for Bitcoin and Ethereum Spot ETFs, finding such a reason might prove to be tricky. Therefore, most of the signals point to a positive future outcome for the AVAX ETF. The key question is — when will the potential big YES arrive?

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