Digital asset manager Grayscale has made a bold move to convert its AAVE trust product into a spot ETF in a bid to strengthen its dominance in the decentralized finance (DeFi) market.
According to cryptocurrency media outlet Cointelegraph on February 16 (local time), Grayscale filed an S-1 registration statement with the Securities and Exchange Commission to convert its trust product tracking the decentralized lending protocol Aave into a spot ETF. The firm plans to name the product the Grayscale Aave Trust ETF and list it on the New York Stock Exchange Arca under the ticker symbol GAVE.
Aave is the world’s largest DeFi protocol and holds a dominant position in the crypto lending and borrowing sector. According to DefiLlama data, Aave’s total value locked has surpassed $27 billion, providing infrastructure that enables users to deposit or borrow digital assets across multiple blockchains. Through this ETF conversion, Grayscale aims to offer institutional investors transparent exposure to the Aave ecosystem without requiring direct ownership of the token.
Grayscale’s latest move is interpreted as the opening salvo in intense competition with Bitwise to capture the Aave spot ETF market. Bitwise previously filed documents in December last year to launch an Aave strategy ETF and has been accelerating the expansion of its ETF lineup based on promising altcoins such as Uniswap (UNI) and Zcash (ZEC). Grayscale’s product will directly hold AAVE tokens, with Coinbase serving as custodian and prime broker.
Market experts expect that following Bitcoin (BTC) and Ethereum (ETH), spot ETFs based on altcoins will enhance the structural maturity of the digital asset market. In Europe, 21Shares has already launched an Aave exchange-traded product on Nasdaq Stockholm, signaling an acceleration of institutional capital inflows. If a spot Aave ETF is approved in the U.S. market, it is expected to mark a historic turning point, opening the door for Wall Street’s massive capital to enter the DeFi ecosystem in earnest.
Although the AAVE token is currently trading significantly below its peak, the news of the ETF conversion is seen as a strong catalyst for restoring confidence in its long-term value proposition. Grayscale has set a 2.5% fee, signaling an aggressive market entry. Despite ongoing volatility in the digital asset market, sustained institutional demand for altcoin exposure remains a key driver of this fund conversion, with global investors closely watching whether regulators will grant approval.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses arising from it. The content should be interpreted for informational purposes only.*  <저작권자 ⓒ 코인리더스 무단전재 및 재배포 금지>
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