Grayscale Joins Bitwise in Effort to Launch Aave ETF on NYSE Arca

TLDR

• Grayscale has filed with the SEC to convert its Aave trust into an ETF and list it on NYSE Arca.
• The Grayscale Aave Trust ETF will carry a 2.5% fee and offer direct exposure to AAVE tokens.
• Coinbase will serve as the custodian and prime broker for the new Aave ETF.
• Grayscale joins Bitwise in seeking approval for an Aave ETF to track the token.
• The AAVE token has dropped more than 80% from its all-time high, now trading at $126.
• Grayscale’s Aave ETF filing reflects the ongoing demand for crypto investment products despite market downturns.

Grayscale, a leading crypto asset manager, has filed with the SEC to convert its trust that tracks Aave’s token into an exchange-traded fund (ETF). The company aims to list the fund on NYSE Arca under the ticker “GAVE.” This move reflects the ongoing demand for crypto exposure despite a downturn in the market.

Grayscale’s Aave Trust ETF Filing

Grayscale submitted a Form S-1 registration statement to the U.S. Securities and Exchange Commission (SEC) on Friday. The company plans to convert its existing Aave trust into the Grayscale Aave Trust ETF. Grayscale has disclosed that the ETF will have a 2.5% fee and will be listed on NYSE Arca, a well-known exchange for trading ETFs.

According to Grayscale’s filing, Coinbase will act as both the custodian and prime broker for the new fund. The company emphasized its intentions to provide investors with a direct method to gain exposure to Aave (AAVE) tokens via an exchange-traded product. This step underscores the firm’s commitment to offering investors a broader range of crypto-related investment options.

Grayscale Joins Bitwise in Aave ETF Race

Grayscale’s filing places it in direct competition with Bitwise, another crypto asset manager that filed with the SEC in December. Bitwise is also seeking regulatory approval for a similar Aave ETF. The Bitwise AAVE Strategy ETF aims to hold up to 60% of its assets in AAVE tokens, with the remaining 40% allocated to securities related to AAVE exposure.

Both Grayscale and Bitwise are positioning their funds to be the first in the U.S. to offer direct exposure to Aave. While Bitwise’s ETF focuses on a mix of AAVE tokens and related securities, Grayscale’s plan includes holding AAVE tokens directly. These filings reflect the increasing interest in decentralized finance (DeFi) assets on Wall Street, despite a challenging market environment.

Global Aave ETF Products

The push for Aave-related ETFs is not limited to the U.S. European exchanges have also seen the launch of similar products. In November, 21Shares launched an Aave exchange-traded product on Nasdaq Stockholm. Earlier in 2023, Global X introduced its own Aave product in Germany, highlighting the growing international interest in the token.

Despite these international efforts, Aave’s token has struggled in recent months. The AAVE token has dropped by over 80% from its all-time high of nearly $662 in May 2021. As of the latest data, the token trades at $126, reflecting the volatility that continues to define the altcoin market.

Grayscale’s decision to pursue an Aave ETF highlights its commitment to expanding the range of crypto-focused products for investors. The competition between Grayscale and Bitwise is poised to shape the future of crypto ETFs, with both firms pushing for approval of their respective products.

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