Bitwise has taken a significant step in the competition for a spot Avalanche ETF by enhancing its U.S. SEC filing to include staking features. This innovative proposal, submitted on November 27, 2025, represents the first of its kind in the American spot cryptocurrency ETF market. The ETF, designated with the ticker BAVA, comes with a strategic fee structure aimed at attracting institutional investors.
The standout feature of Bitwise”s filing is its plan to stake up to 70% of the ETF”s holdings in AVAX. This approach allows the fund to earn additional yield directly from the blockchain, simplifying the staking process for traditional investors. Participants will not need to deal with the complexities of private keys, validator setups, or wallet management, as the staking rewards will automatically accrue to the fund, thereby enhancing its return profile without requiring direct involvement from users.
To further entice early investors, Bitwise has set a competitive sponsor fee of 0.34%, positioning BAVA among the lower end of altcoin ETF products. Additionally, the company is waiving all fees for the first month or until the ETF achieves $500 million in assets under management (AUM), a tactic reminiscent of its previous successful altcoin launches. If granted approval, BAVA is expected to trade on NYSE Arca, marking a significant expansion for Bitwise after its European AVAX staking ETP launched on Deutsche Börse Xetra in October 2025.
In terms of asset security, Avalanche tokens within the ETF will be safeguarded by Coinbase Custody Trust Company, which will utilize segregated cold-storage accounts for asset protection. This aligns with the custody standards typically employed by U.S.-listed cryptocurrency ETFs, fulfilling regulatory requirements for institutional-grade asset security.
Bitwise”s updated filing significantly raises the competitive stakes for other issuers in the market. Grayscale, which has also proposed a spot AVAX ETF earlier this year, now faces increased pressure to consider integrating staking mechanisms to remain viable in the evolving landscape. The timing of this move is particularly notable, coinciding with the UK”s proposed “no gain, no loss” DeFi tax framework that could provide clearer tax treatment for staking returns, potentially reshaping global investor sentiment towards staking.
Market reactions have already begun to surface, with the price of AVAX experiencing a notable increase following the announcement. This surge reflects growing optimism that a staking-enabled ETF could draw substantial institutional interest into the Avalanche ecosystem. As the regulatory review process unfolds, industry stakeholders are keenly observing whether the SEC will permit staking to become a core component of the next generation of spot cryptocurrency ETFs.
