Avalanche to raise $1B to create crypto stacking vehicles: Report
News Summary
The Avalanche Foundation is reportedly in active discussions with investors to raise $1 billion. The funds are earmarked for launching digital asset treasury projects and converting a company into a “crypto-hoarding” vehicle, with plans to purchase AVAX tokens from the foundation at a discounted price. This fundraising effort involves two deals: a $500 million private placement led by Hivemind Capital and another deal via a special purpose acquisition vehicle involving Dragonfly Capital, also seeking up to $500 million. These transactions would acquire approximately 34.7 million AVAX tokens, representing about 8% of the current circulating supply. AVAX, the 21st largest cryptocurrency by market capitalization, is currently trading at $28.8, having seen a 16% surge in the past seven days. This news follows Grayscale Investments' recent filing with the U.S. Securities and Exchange Commission to launch a spot Avalanche exchange-traded fund (ETF), indicating growing industry attention.
Background
Avalanche is an open-source blockchain platform launched in September 2020 by Ava Labs, a startup founded by Cornell University's Emin Gün Sirer. It supports decentralized applications and smart contracts. Its native cryptocurrency, AVAX, reached an all-time high of around $135 in November 2021 but experienced a significant sell-off in early 2022 and has not surpassed $65 since. AVAX has a limited supply of 720 million tokens, similar to Bitcoin, which contributes to its perceived scarcity. Recently, institutional interest in Avalanche has grown, evidenced by Grayscale Investments' filing for a spot Avalanche exchange-traded fund (ETF), a move often seen as a significant step toward broader mainstream adoption and liquidity.
In-Depth AI Insights
What are the implications of this large-scale fundraising for AVAX's price dynamics and long-term supply? - On the surface, purchasing AVAX from the foundation at a discount and