Avalanche (AVAX) Prices Jump 14% On New Trust Launch, Here's Why

Avalanche (AVAX), the 11th-largest cryptocurrency, rallied on Thursday after digital asset manager Valkyrie launched an investment trust dedicated to the token.

AVAX jumped 14% in a few hours to a one-week high of $68.36. The spike came just after Valkyrie’s announcement, which is expected to draw more institutional money into the Avalanche blockchain.

The asset manager cited growing interest among institutional investors in the token.

AVAX’s gains were also underpinned by a broader rise in the crypto market, as investors were relieved that the U.S. Federal Reserve raised rates as expected. Total crypto market capitalization rose about $100 billion in the past 24 hours.

Valkyrie launches Avalanche trust, prices to surge?

Valkyrie, a prominent digital asset manager, revealed the new trust in a press release on Wednesday. The trust will invest in AVAX on the behalf of institutional investors, allowing them to gain exposure to the token without directly buying it.

The planned investment trust will only be available to qualified investors, Valkyrie said. The asset manager lauded Avalanche for being the “fastest smart contracts platform” in the blockchain industry.

To this end, the Valkyrie will also begin staking AVAX through the trust. The move highlights a growing interest in proof-of-stake (PoS) networks among institutional investors, which is likely triggered by Ethereum’s planned shift to the medium this year.

Proof-of-stake networks in vogue

Ethereum’s planned transition to a PoS network has invited a slew of interest into other PoS tokens, such as AVAX, SOL and ADA. Avalanche in particular is seen as a major competitor to Ethereum.

Institutional investors in particular appear to be looking at PoS tokens as an alternative investment to Bitcoin. The medium’s relatively lower energy requirements, as compared to proof-of-work tokens, also make PoS more palatable for environmentally conscious regulators.

Digital fund managers such as CoinShares, Grayscale and 21Shares have all launched PoS-exposed products this year, citing growing demand from their institutional clients.

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Ambar Warrick

With more than five years of experience covering global financial markets, Ambar intends to leverage this knowledge towards the rapidly expanding world of crypto and DeFi. His interest lies chiefly in finding how geopolitical developments can impact crypto markets, and what that could mean for your bitcoin holdings. When he isn't trawling through the web for the latest breaking news, you can find him playing videogames or watching Seinfeld reruns. You can reach him at [email protected]

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