Bitwise Files Staking-Based Avalanche ETF (BAVA) With 70% Allocation

Staking and ETF structure in the US

In the amended filing, Bitwise explicitly states its intention to include a staking mechanism within its spot Avalanche ETF — a rare move for the U.S. market. According to the document, the fund will be able to delegate up to 70% of its AVAX to the Avalanche proof-of-stake network. This model is designed to generate yield while remaining compliant with SEC requirements on disclosure and custody. At the same time, 12% of the staking rewards will be retained as operating expenses, while the remaining portion will be distributed to fund shareholders.

The sponsor fee is set at 0.34%, which is lower than competitors VanEck (0.40%) and Grayscale (0.50%). In addition, Bitwise is offering a full fee waiver for the first month on the initial $500 million in assets under management, positioning BAVA as one of the most cost-efficient ways to gain exposure to Avalanche.

If approved, the ETF will trade on NYSE Arca, while the Avalanche products from VanEck and Grayscale are targeting Nasdaq listings. All three issuers are expecting a regulatory decision around the first quarter of 2026.

Global context and regulatory boundary testing

While the United States remains cautious, other markets have already allowed staking mechanisms in exchange-traded crypto products. In Canada, Europe, and Hong Kong, similar structures are available within regulated ETF and ETP frameworks, making the U.S. an outlier in this regard.

Avalanche was selected primarily due to its attractive staking yield and network design. The filing also references guidance from the U.S. Internal Revenue Service (IRS), which clarified the tax treatment of staking rewards without triggering adverse consequences. This additional clarity encouraged Bitwise to move forward with its staking model.

The company has strengthened its custody measures and expanded its risk disclosures. All AVAX holdings will be stored with Coinbase Custody Trust Company, while BNY Mellon will handle all cash management for the ETF. The document also introduces a liquidity reserve and addresses risks related to quantum computing as well as recent cybersecurity incidents in the crypto industry.

Market parameters and trading model

The BAVA ETF will track the CME CF Avalanche–Dollar Reference Rate, a benchmark index that reflects AVAX’s price in U.S. dollars. This ensures a close alignment between the fund’s value and Avalanche’s market performance. To seed the fund, Bitwise Investment Manager will purchase 100,000 shares worth $2.5 million at $25 per share. A similar approach was previously used for the launch of Bitwise’s XRP and Dogecoin ETFs.

Back in September, Bitwise, along with VanEck and Grayscale, submitted the first Avalanche ETF applications. Last month, the product was also listed by the DTCC, marking an important milestone on the path toward trading on NYSE Arca.

In the updated version of the filing, Bitwise confirms direct ownership of AVAX tokens through the trust and active participation in staking. The company continues to update its disclosures and adjust operating parameters in line with regulatory feedback.

The revised proposal brings together several key elements: staking of up to 70% of assets, competitive fees, enhanced security measures, and a clearly defined operational structure. As a result, Bitwise is positioning BAVA as both a technologically advanced and strictly regulated investment vehicle for exposure to the Avalanche ecosystem.