Crypto Regulation & Enforcement

Grayscale Files to Convert Aave Trust Into NYSE Arca ETF

Marcel Fuhrmann
/ 4 min read
Official document with red seal, classical government building facade, and vault door overlaid with upward-trending chart.

Grayscale Files to Convert Aave Trust Into ETF – Altcoin Exposure Proposal Targets NYSE Arca Listing

Key Takeaways

  • Grayscale has filed a Form S-1 with the US Securities and Exchange Commission to convert its Aave trust into an exchange-traded fund.
  • The proposed product would be renamed Grayscale Aave Trust ETF and listed on NYSE Arca under the ticker GAVE.
  • The fund would hold AAVE tokens directly, charge a 2.5% fee, and use Coinbase as custodian and prime broker.
  • Bitwise has also filed to launch an Aave-related ETF, but with a different asset allocation structure.

Grayscale Seeks SEC Approval to Convert Aave Trust

Grayscale, a crypto asset manager, has submitted a Form S-1 registration statement to the US Securities and Exchange Commission seeking approval to convert its existing trust that tracks the Aave token into an exchange-traded fund. If approved, the vehicle would be renamed the Grayscale Aave Trust ETF.

The company stated that it intends to list the fund on NYSE Arca, one of the primary US exchanges for ETF trading. The proposed ticker symbol is GAVE. According to the filing, the ETF would charge a management fee of 2.5%. Coinbase is designated to serve as both custodian and prime broker for the product.

The planned structure differs from some hybrid crypto ETF proposals in that the Grayscale vehicle would hold AAVE tokens directly rather than combining token exposure with other securities.

Direct Exposure to Aave Token

The proposed ETF is designed to track the performance of Aave, the governance and utility token of the decentralized lending protocol Aave. The protocol allows users to lend and borrow crypto assets across multiple blockchains. The AAVE token can also be staked to earn yield within the ecosystem.

According to DefiLlama data cited in the source material, Aave is currently the largest decentralized finance protocol, with more than $27 billion in total value locked. The token is trading at approximately $126, down 1.6% over the past 24 hours. It 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 data referenced in the report.

If approved, the Grayscale Aave Trust ETF would provide investors with direct price exposure to AAVE through a regulated exchange-traded structure. For market participants who cannot or do not wish to hold tokens directly, an ETF structure offers an alternative access point via traditional brokerage accounts.

Bitwise Also Files for Aave-Related ETF

Grayscale is not alone in seeking regulatory approval for an Aave-focused product in the United States. Bitwise filed in December to launch the Bitwise AAVE Strategy ETF.

The Bitwise proposal outlines a different structure. According to the filing details cited, the Bitwise ETF would invest up to 60% of its assets directly in AAVE tokens. At least 40% would be allocated to securities, including other ETFs that provide exposure to AAVE. In contrast, Grayscale’s proposed ETF would hold AAVE tokens directly without the mixed allocation model described in the Bitwise filing.

Both filings represent attempts to introduce what would be the first US-listed ETFs offering direct exposure to Aave. Currently, similar products exist outside the United States. In November, 21Shares launched an Aave exchange-traded product on Nasdaq Stockholm. Earlier, in early 2023, Global X introduced a comparable Aave product in Germany.

Altcoin ETF Filings Continue Despite Market Weakness

The Grayscale and Bitwise filings form part of a broader wave of ETF proposals tied to altcoins. According to the source material, Bitwise has also filed for ETFs linked to other tokens, including Uniswap and Zcash.

The timing of these filings comes amid a period in which AAVE trades significantly below its historical peak. Despite the price decline from its 2021 high, asset managers continue to pursue regulated products linked to the token.

For international users who follow crypto markets or evaluate crypto-based services, ETF developments can influence liquidity, visibility, and institutional participation in specific tokens. A US-listed ETF tied directly to AAVE would represent a new access channel for market exposure, separate from direct onchain participation in the Aave protocol.

Our Assessment

Grayscale’s filing marks a formal step toward converting its existing Aave trust into a US-listed ETF on NYSE Arca under the ticker GAVE. The proposed structure would hold AAVE tokens directly, with Coinbase acting as custodian and prime broker and a stated 2.5% fee.

The application positions Grayscale alongside Bitwise, which has also filed for an Aave-related ETF but with a different allocation model. If approved, these products would become the first US ETFs to offer direct exposure to Aave, complementing exchange-traded products already launched in Sweden and Germany. For market participants, the decision now rests with the US Securities and Exchange Commission, which must review and determine whether the proposed structure meets regulatory requirements.