AVAX, the native token of the Avalanche blockchain, climbed sharply on Wednesday following the announcement of a public listing and major token purchase by Avalanche Treasury Co., a new entity formed to back the ecosystem.
The company revealed it will merge with Mountain Lake Acquisition Corp., a special purpose acquisition company (SPAC), in a $675 million deal.
The merger sets the stage for Avalanche Treasury Co. to debut on the Nasdaq under the ticker “AVAT” in early 2026, pending regulatory and shareholder approval.
At the heart of the strategy is a $1 billion AVAX acquisition plan. The company says its initial capital raise will contribute roughly $460 million in treasury assets, with the rest expected to follow after listing.
The firm claims an exclusive partnership with the Avalanche Foundation, giving it early access to discounted token sales.
AVAX responded positively to the news, hitting $31.32 intraday before settling slightly lower. As of Thursday morning, the token remained up 2.3% over 24 hours, according to CoinGecko.
Avalanche Treasury Co. is the second dedicated treasury vehicle formed around the Avalanche ecosystem. Its leadership includes former Susquehanna Crypto head Bart Smith as CEO and Avalanche creator Emin Gün Sirer as a company adviser.
Backing the venture are major crypto investors including Pantera Capital, Galaxy Digital, VanEck, CoinFund, Dragonfly, FalconX, Kraken, and Monarq.
The company isn’t stopping at token accumulation. It plans to participate actively in the Avalanche ecosystem through protocol investments, validator infrastructure, and supporting tokenization projects.
“Many institutions struggle to access or benefit from digital assets,” Smith said. “We’re building something more dynamic than just holding AVAX.”
The structure reflects a growing trend of companies rebranding or pivoting to digital asset treasuries. Last month, AgriFORCE Growing Systems announced plans to rename itself AVAX One and purchase $700 million worth of AVAX tokens.
Avalanche Treasury Co. also announced it would receive an 18-month priority window for future AVAX token sales by the Avalanche Foundation, further reinforcing its strategic position.
The firm says it will purchase AVAX at a discount, claiming a 0.77 mNAV, roughly 23% below market value.
The crypto treasury strategy that gained traction among small-cap firms in 2024 is beginning to unravel, with several companies now launching debt-funded share buybacks to counter plunging stock prices.
At least seven firms, including those in gaming, biotech, and EV sectors, are now trading below the value of their crypto holdings, raising red flags among investors and analysts.
Critics say the tactic signals desperation and a departure from the original idea that crypto appreciation alone would drive shareholder value.
Notable cases include ETHZilla (formerly 180 Life Sciences), which saw its stock drop 76% despite accumulating ether and rebranding.
The company recently secured $80 million in debt to finance a $250 million buyback. Meanwhile, Empery Digital (formerly Volcon) holds $476 million in BTC but has a market cap of just $378 million, prompting it to expand its debt facility for similar repurchases.
A recent report from K33 Research reveals that 25% of public companies holding Bitcoin now trade at market values below the worth of their BTC holdings, highlighting a sharp drop in investor confidence.
