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Grayscale has filed with the US Securities and Exchange Commission to convert its existing Aave trust into an exchange-traded fund (ETF), a move that would expand access to altcoin exposure for US investors.
On Friday, Grayscale submitted a Form S-1 registration statement seeking approval to convert its Aave trust into the Grayscale Aave Trust ETF.
If approved, the fund would list on NYSE Arca under the ticker GAVE, charge a 2.5% management fee, and use Coinbase as both custodian and prime broker.
Unlike strategy-based products, the ETF would hold AAVE tokens directly, providing spot exposure to the decentralized finance protocol.
Aave is described as the largest decentralized finance platform by total value locked, with more than $27 billion locked across its markets, according to DefiLlama.
The protocol supports lending and borrowing of crypto across multiple blockchains. The AAVE token is used for governance and can be staked to earn yield, combining scale, revenue generation, and on-chain utility.
The filing did not produce an immediate, sharp move in the AAVE token. CoinGecko data cited in the article shows AAVE down 1.6% over the past day, trading near $126 at the time of reporting.
The subdued response reflects how ETF filings are often viewed as longer-term positioning rather than an immediate catalyst, particularly during periods of weaker broader market sentiment.
Grayscale is the second firm seeking US approval for an Aave-focused ETF, joining Bitwise.
Bitwise filed with the SEC in December to launch the Bitwise AAVE Strategy ETF. The proposal is described as part of a broader push that also targeted altcoins including Uniswap’s UNI and Zcash.
Under Bitwise’s plan, the fund would allocate up to 60% of assets directly to AAVE tokens, with the remainder held in related securities. Grayscale’s approach, by contrast, is aimed at direct spot exposure to AAVE rather than a blended strategy.
Outside the US, Aave-linked exchange-traded products already exist. The article notes that 21Shares launched an Aave ETP on Nasdaq Stockholm in November, and Global X introduced a similar product in Germany in early 2023.
These overseas offerings increase pressure on US regulators as American investors look for comparable access through domestic markets.
Approval is not guaranteed, but the filing reinforces a broader trend: asset managers are testing how far the ETF structure can be extended into decentralized finance.
If successful, Aave-focused ETFs could create a new channel for capital into DeFi and set precedents for other protocol-based funds.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your research before making any investment decisions.
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