Crypto asset manager Grayscale has applied for regulatory approval to convert its trust tied to the native token of Aave into an exchange-traded fund.
The firm submitted a Form S-1 registration statement to the U.S. Securities and Exchange Commission on Friday, outlining plans to restructure the vehicle and rebrand it as the Grayscale Aave Trust ETF.
Grayscale said it intends to list the ETF on NYSE Arca under the ticker symbol “GAVE.” The fund will carry a 2.5% management fee, with Coinbase acting as both custodian and prime broker.
Grayscale’s latest filing adds to a growing list of proposed ETFs aimed at tracking altcoins, signaling that institutional appetite for crypto exposure persists despite the broader market downturn.
Aave is currently the largest decentralized finance protocol, with more than $27 billion in total value locked, according to DeFiLlama. The platform enables users to lend and borrow digital assets across multiple blockchains, while the AAVE token can be staked to generate yield.
Grayscale joins Bitwise in Aave ETF race
With its application, Grayscale becomes the second firm seeking US regulatory approval for an Aave-linked ETF, joining Bitwise in the race to launch such a product.
Bitwise filed with the U.S. Securities and Exchange Commission in December to introduce the Bitwise AAVE Strategy ETF, part of a broader wave of proposals targeting altcoin-based funds, including products tied to Uniswap and Zcash.
Under its proposal, Bitwise’s ETF would allocate up to 60% of its assets directly to AAVE tokens and at least 40% to securities such as other ETFs with AAVE exposure. In contrast, Grayscale’s fund would hold AAVE tokens outright.
If approved, the two funds would mark the first US-listed ETFs to provide direct exposure to Aave, joining a limited number of similar products already available overseas.
In Europe, 21Shares launched an Aave exchange-traded product on Nasdaq Stockholm in November, years after Global X introduced a comparable Aave product in Germany in early 2023.
The AAVE token has slipped 1.6% over the past 24 hours to $126 and remains more than 80% below its all-time high of nearly $662, reached in May 2021 during a broader altcoin bull market, according to CoinGecko.
