- Grayscale filed to convert its Aave trust into an ETF that will trade under the ticker GAVE.
- The proposed Aave ETF will hold AAVE tokens directly and list on NYSE Arca.
- Grayscale joins Bitwise in seeking SEC approval for a US based Aave ETF.
Grayscale has filed to convert its Aave trust into an exchange-traded fund. The company submitted a Form S-1 to the Securities and Exchange Commission on Friday. The filing outlines plans to rename the product the Grayscale Aave Trust ETF. This step places Aave at the center of the latest altcoin ETF push.
The proposed ETF will seek to track the AAVE token directly. Grayscale plans to list the fund on NYSE Arca under the ticker GAVE. In addition, the firm set a management fee of 2.5%. Coinbase will act as both custodian and prime broker for the fund.
The filing arrives during a softer crypto market. However, asset managers continue to test investor demand for altcoin exposure. Grayscale’s move signals that institutional interest in decentralized finance remains active. Moreover, it expands the firm’s broader digital asset product lineup.
Aave’s Market Position Draws ETF Interest
Aave stands as the largest decentralized finance protocol by total value locked. Data from DefiLlama shows more than $27 billion locked on the platform. The protocol allows users to lend and borrow digital assets across several blockchains. It also enables AAVE token holders to stake tokens for yield.
These features have kept Aave relevant despite price volatility. The AAVE token recently traded near $126. It declined about 1.6% over the past day. Furthermore, the token remains more than 80% below its May 2021 peak near $662, according to CoinGecko.
Even so, asset managers continue to build products around established DeFi tokens. Aave’s scale and liquidity likely support that strategy. As a result, ETF sponsors see an opportunity to package direct token exposure in a regulated format.
Grayscale Joins Bitwise in Aave ETF Race
Grayscale is not alone in seeking approval for an Aave-based ETF. Bitwise filed in December for its own AAVE-focused fund. The Bitwise AAVE Strategy ETF would allocate up to 60% of assets directly to AAVE tokens. It would invest at least 40% in securities tied to AAVE exposure.
By contrast, Grayscale’s proposed ETF would hold AAVE tokens directly. That structure may appeal to investors seeking straightforward token tracking. Both filings mark the first attempts in the United States to launch ETFs tied directly to Aave.
Overseas markets have already listed similar products. In November, 21Shares launched an Aave exchange-traded product on Nasdaq Stockholm. Earlier, Global X introduced a comparable Aave product in Germany in early 2023.