In brief
- Bitwise has submitted paperwork for an ETF that would track AVAX, currently the 19th largest cryptocurrency based on market capitalization.
- The filing with the SEC coincides with expectations that Dogecoin and XRP ETFs will become available for trading this week.
- Various investment firms are seeking regulatory approval for a range of ETFs focused on alternative cryptocurrencies.
Investment management firm Bitwise is seeking to launch an exchange-traded fund (ETF) tied to Avalanche, just as the market anticipates the arrival of new investment options focused on altcoins.
A filing, an S-1 form, made public on Monday with the Securities and Exchange Commission, indicates that the proposed “Bitwise Avalanche ETF” plans to use Coinbase, a leading cryptocurrency exchange in the United States, for safeguarding its digital assets.
Avalanche is the blockchain platform associated with AVAX, which ranks as the 19th largest cryptocurrency by market valuation. Avalanche aims to compete with Ethereum by providing a faster and more cost-effective blockchain solution for developers to build applications.
Recent data from CoinGecko shows that AVAX has been trading above $30, experiencing a gain of over 6% in the last 24 hours. Other firms like VanEck and Grayscale have also filed applications with the SEC to create their own AVAX ETFs.
The Bitwise filing occurs as other altcoin ETFs are moving closer to their debut in the U.S. market. ETFs that will provide exposure to XRP and Dogecoin are anticipated to begin trading this week, offered by REX Shares and Osprey Funds.
In contrast to the Bitcoin and Ethereum ETFs, which were introduced last year in the U.S., and the Bitwise proposed fund, these altcoin ETFs will provide exposure to Dogecoin and XRP through a subsidiary based in the Cayman Islands, fully owned and controlled by the main fund.
The Rex-Osprey funds were registered under the Investment Company Act of 1940, a different framework than the Bitcoin and Ethereum ETFs, which were registered as commodity trusts under the Securities Act of 1933.
The Bitcoin and Ethereum ETFs give investors exposure to the two largest cryptocurrencies by market capitalization through fund managers directly holding the underlying cryptocurrencies.
The SEC approved Bitcoin ETFs last year after a decade of rejecting similar applications. These funds achieved the most successful launch in ETF history. Currently, the 12 funds collectively manage assets totaling nearly $152 billion, according to data from SoSoValue.
Later in 2024, the SEC also authorized fund managers to launch Ethereum ETFs.
The SEC now faces a substantial number of applications for altcoin ETFs from investment firms hoping to introduce smaller cryptocurrencies to the market.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.