VanEck Bets on Avalanche ETF Despite Market Slump
As crypto winter deepens, investment giant makes calculated move on struggling 'Ethereum Killer’
VanEck—one of Wall Street's most crypto-curious investment firms—has quietly registered a trust company in Delaware for an Avalanche (AVAX) ETF, mirroring its previous moves for Bitcoin, Ethereum, and Solana products.
Why Avalanche? And why now—when AVAX has crashed a staggering 55% since January?
The timing is puzzling.
Once hyped as an "Ethereum Killer," Avalanche now languishes at $17.85, miles from its glorious $145 peak in 2021. Bitcoin itself is down 17% this year, but AVAX's plunge has been particularly brutal.
Read: Time For AVAX ⏰
Yet VanEck seems unfazed.
The Altcoin ETF Race
This isn't happening in isolation. It's part of a veritable gold rush for altcoin ETFs:
Franklin Templeton has filed for an XRP ETF
Grayscale is eyeing Polkadot
Canary Capital wants Axelar and Sui ETFs
The Securities and Exchange Commission (SEC)—notably more crypto-friendly since last year—has approved Bitcoin ETFs (January 2024) and Ethereum ETFs (July 2024).
The SEC is putting the brakes on this altcoin parade, delaying decisions on Solana, XRP, and Dogecoin ETFs.
Bloomberg analysts are betting on varying approval odds: Litecoin (90%), Dogecoin (75%), Solana (70%), XRP (65%).
Where might Avalanche sit in this hierarchy?
The Strategy Play
"VanEck has adopted a 'throw everything at the wall' approach, they want to be first in any emerging ETF category." said Sumit Roy from etf.com.
It's not a new strategy for them.
VanEck pioneered crypto ETFs with a futures Bitcoin ETF filing back in 2017—well before most Wall Street suits would touch the sector.
Being first matters enormously in the ETF world. The initial product in a category often captures the lion's share of assets—a pattern we've seen repeatedly with commodity and sector funds.
What Happens Next?
Delaware registration doesn't guarantee an imminent SEC filing or approval. VanEck's Solana ETF, filed in June 2024, remains in regulatory limbo.
For Avalanche, an eventual ETF approval could spark renewed interest and potentially lift its price. The mere filing has historically provided short-term boosts to underlying assets.
But with the broader crypto market struggling and regulatory scrutiny intensifying, VanEck's Avalanche bet looks increasingly speculative.
Despite its troubles, Avalanche isn't exactly small fry.
With a $7 billion market cap (20th among digital assets) and roughly $1 billion in hosted digital assets, it maintains some relevance. Its technological pitch remains compelling: three interoperable blockchains offering speed and low fees compared to Ethereum's congestion.
But can technology overcome market sentiment? AVAX has dropped 5.5% in just 24 hours and 14% in the past week as we write this.
The bottom line?
VanEck's move represents both opportunity and timing risk. They're positioning for a potential market recovery whilst securing first-mover advantage in what could become a significant altcoin ETF category.