Grayscale files to convert AAVE token trust into ETF to list on NYSE Arca

Quick Take

  • Crypto asset manager Grayscale is looking to convert its closed-ended AAVE trust into an exchange-traded fund.
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Grayscale has filed to convert its AAVE trust into an exchange-traded fund, according to a Securities and Exchange Commission filing on Friday. 

Bitwise appears to have beaten the prominent crypto asset manager to filing for AAVE ETF consideration, having submitted paperwork for 11 separate funds in December. 

AAVE is the native token for the Aave protocol, by far the dominant decentralized lending operation in DeFi. The token has a market cap of about $1.8 billion and its current price of $119, up about 9% on the day, according to The Block’s data

The token hit an all-time high of $661.69 in April 2021. 

Aave (AAVE) token price chart. Source: The Block/TradingView

Aave has been a popular asset for investment products, including DeFi-focused index products and standalone vehicles like the 21Shares Aave ETP and Global X Aave ETP, which trade in Europe. 

Grayscale has converted a number of its closed-ended trusts into ETFs, beginning with its spot Bitcoin ETF. In fact, Grayscale’s winning legal battle with the SEC regarding its Bitcoin Trust conversion opened the door for other spot bitcoin ETFs in the U.S.

The proposed Grayscale AAVE ETF would have a sponsor fee of 2.5% on NAV, payable in AAVE, and use Coinbase as a custodian and prime broker. It intends to list on the NYSE Arca market.


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