VanEck's AVAX ETF: A New Opportunity for Avalanche Investments

VanEck proposes an ETF based on AVAX, the native token of Avalanche, which would function as a trust holding the digital asset directly. The fund’s structure eliminates risks associated with derivative products, ensuring exposure to AVAX’s price through a simplified mechanism.

The trust’s shares will be issued in units called "Baskets," and their price will be calculated daily based on the MarketVector Avalanche Benchmark Rate, an index derived from the liquidity of five verified exchanges.

Custody providers will store AVAX in geographically distributed cold wallets, protected by insurance policies against hacking risks. However, the prospectus warns that the insurance may not cover total losses.

In the context of current regulations, SEC approval remains uncertain, but this ETF could mark a turning point for institutional investments in AVAX.