Bitwise has filed an amended spot Avalanche ETF proposal with the U.S. Securities and Exchange Commission, targeting staking inclusion and yield generation. The filing lists BAVA as the ticker and details a framework that allows up to 70% AVAX staking within the fund. According to the submission, it aims to expand the scope of regulated ETFs while testing current SEC limits on yield mechanisms.
Staking Proposal and U.S. ETF Structure
The updated filing outlines Bitwise’s intent to introduce staking within a spot Avalanche ETF, which is rare among U.S.-regulated funds. The fund would delegate up to 70% of AVAX holdings to Avalanche’s proof-of-stake network. This structure seeks yield generation while staying within SEC disclosure and custody requirements.
However, the issuer plans to deduct 12% of generated staking rewards as operational expenses. The remaining yield would flow to shareholders, according to the filing details.
Bitwise confirmed a sponsor fee of 0.34%, lower than VanEck’s 0.40% and Grayscale’s 0.50%. It also offers a full fee waiver for the first month on the initial $500 million assets. This step positions BAVA as a low-cost route for Avalanche exposure.
According to the amended S-1, the ETF would trade on NYSE Arca if approved. VanEck and Grayscale Avalanche ETFs target NASDAQ listings. All three issuers aim for regulatory decisions around the first quarter of 2026.
Global Context And Regulatory Testing
While the United States reviews staking within ETFs, other regions already permit similar structures in crypto exchange-traded products. Notably, Canada, Europe, and Hong Kong allow staking features in regulated funds. This comparison places the U.S. market as a regulatory outlier.
Bitwise selected Avalanche due to its staking yield and network framework, as described in the filing. The proposal also references IRS guidance that clarified yield treatment without triggering adverse tax consequences. Therefore, the issuer moved forward with staking plans under current tax clarity.
The filing also introduces tighter custody measures and enhanced risk disclosures. Coinbase Custody Trust Company will store all AVAX holdings for the fund. Meanwhile, BNY Mellon will manage all cash operations linked to the ETF.
Bitwise also added a liquidity reserve and revised the language to address potential technology risks. These include quantum computing threats and recent crypto exchange security incidents. This approach aligns with updated compliance expectations.
Market Details And Trading Framework
Bitwise confirmed that BAVA will track the CME CF Avalanche-Dollar Reference Rate for price exposure. This benchmark offers regulated reference pricing for AVAX movements. Consequently, the fund maintains direct price alignment with Avalanche performance.
To seed the ETF, Bitwise Investment Manager committed to purchasing 100,000 shares. These shares carry a value of $2.5 million at $25 each. This launch method matches structures used for Bitwise XRP and Dogecoin ETFs.
Earlier, in September, Bitwise joined VanEck and Grayscale in submitting Avalanche ETF applications. Last month, DTCC listed the Avalanche ETF on its website. This listing marked progress toward NYSE Arca trading readiness.
The trust structure also confirms ongoing disclosure updates and compliance reviews. Bitwise adjusted operational terms based on regulatory feedback. Therefore, each filing revision shows growing engagement with SEC standards.
The proposal confirms that Bitwise will maintain direct AVAX token ownership through the trust. It also confirms active yield participation through staking mechanisms. This maintains tight operational control while expanding ETF functionality.
Meanwhile, Bitwise submitted an updated Avalanche ETF filing introducing staking, revised fees, and clear operational structures. The proposal outlines 70% staking allocation, BAVA trading plans, and enhanced custody protections. These details consolidate fee strategy, regulatory testing, and market positioning within a single structured ETF framework.