Avalanche surges 55% as Bitwise’s AVAX ETF draws early inflows

AVAX posted a 55% weekly gain as attention around the Bitwise Avalanche ETF fueled renewed interest in the Layer 1 network. The ETF, trading under the ticker BAVA on NYSE Arca, represents the first regulated vehicle offering direct exposure to Avalanche tokens, and it comes with a twist: most of the fund’s holdings are actively staked to generate yield.

The early inflows have been modest by ETF standards, with the fund pulling in around $231K in one recorded period and seeing single-day peaks closer to $5 million. Assets under management for BAVA sat in the range of $18 million to $22 million shortly after launch. For context, AVAX was trading around $9.50 with a market cap of roughly $4.1 billion at the time the fund went live.

How the staking model works

BAVA isn’t just a passive wrapper around AVAX tokens. Bitwise designed the fund to stake approximately 70% of its holdings through its Onchain Solutions division, targeting average staking rewards of about 5.4%.

The sponsor fee comes in at 0.34%, which Bitwise is waiving for the first month on the initial $500 million in assets.

What’s driving the AVAX rally

Avalanche has been building its case as an enterprise-grade blockchain for some time. The network claims throughput of up to 4,500 transactions per second, which puts it in the upper tier of Layer 1 networks. Its customizable architecture allows organizations to spin up dedicated subnets, essentially private blockchains that still connect to the broader Avalanche ecosystem.

That design has attracted partnerships with major organizations including Visa and FIFA, both of which have explored Avalanche for tokenized assets and payment infrastructure.

The bigger picture for crypto ETFs

If the staking model proves successful and AUM grows, it could set a template for future crypto ETFs. Fund managers launching products around staking-enabled tokens like Solana, Polkadot, or Cosmos might look at BAVA’s structure as a blueprint.

For AVAX holders, the ETF represents a new source of structural demand. Every dollar flowing into BAVA translates to AVAX purchases on the open market, and 70% of those tokens get locked into staking contracts, reducing circulating supply. At current AUM levels of $18 million to $22 million, that mechanism is too small to move the needle significantly.

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