VanEck Seeks Staking Mechanism in AVAX Spot ETF Proposal

VanEck updated its AVAX Spot ETF application on December 21 to include staking rewards, planning to stake 70% of holdings using Coinbase as the initial staking provider.

This update could attract investor interest by enhancing yield potential, despite limited primary source confirmation, potentially impacting AVAX’s market perception and overall cryptocurrency ETF innovation.

High Market Volatility Potential as AVAX Slumps

The addition of a staking mechanism to this ETF could reshape the market perceptions of investment funds tied to Avalanche’s native cryptocurrency, AVAX. This strategy, if implemented, could potentially increase demand for AVAX, affecting its market dynamics. However, no official confirmation of these plans has been released by VanEck or other key players involved.

While there have been no direct responses from industry leaders or regulatory bodies such as the SEC, speculation continues among crypto enthusiasts about the implications of introducing staking to an ETF structure. This proposal could potentially lead to increased institutional interest in cryptocurrency staking practices.

Market Data and Implications

Did you know? The introduction of staking mechanisms in ETFs could significantly alter the landscape of cryptocurrency investments.

According to CoinMarketCap, Avalanche (AVAX) is currently priced at $12.13, with a market cap of $5.21 billion, reflecting a 0.17% share in the market. The fully diluted market cap stands at $8.68 billion. The 24-hour trading volume is $155.42 million, showing a decrease of 54.58%. Notably, the AVAX price depreciated by 0.99% within the last 24 hours, marking an 8.22% drop in the past week and 11.37% over 30 days. The downturn extends to a 37.78% decline over 60 days, with a sharper fall of 60.71% across the last three months.

Potential outcomes following VanEck’s staking proposal, as explored by the Coincu research team, include increased market volatility, particularly if investor sentiment shifts toward staking-based ETFs across the crypto landscape. Technological implications may also arise from scaling the infrastructure to support efficient and secure staking operations for institutional-grade assets.