Grayscale Investments has submitted a registration statement with the U.S. Securities and Exchange Commission (SEC) to convert its existing Grayscale Aave Trust into a spot exchange-traded fund (ETF) tracking the decentralized finance token AAVE, with Coinbase designated as custodian and prime broker in the filing.
The proposed ETF — expected to trade on NYSE Arca under the ticker GAVE — marks a pivotal effort to provide regulated, traditional market access to AAVE for institutional and retail investors. Grayscale’s move places the firm directly in competition with Bitwise Asset Management, which filed its own AAVE ETF proposal in late 2025.
ETF Filing Details and Structure
Grayscale filed a Form S-1 registration statement with the SEC on Feb. 13, 2026, seeking approval to transition the closed-ended AAVE Trust into an ETF structure that directly holds AAVE tokens as its underlying asset. The filing outlines key features of the proposed fund, including:
- Custodian & Prime Broker: Coinbase will serve as both custodian and prime broker for the AAVE ETF, responsible for secure custody and handling of the digital assets.
- Exchange Listing: The ETF is expected to list on NYSE Arca, one of the leading U.S. exchanges for ETFs.
- Sponsor Fee: The proposed fund would charge an annual sponsor fee around 2.5% of net asset value (NAV), a figure payable in AAVE tokens rather than cash.
By converting the trust into a regulated ETF, Grayscale aims to improve liquidity, transparency and pricing efficiencycompared with private trust structures, offering investors a more accessible vehicle for exposure to Aave’s native token without direct crypto custody or wallet management.
Competitive Landscape: AAVE ETF Race
Grayscale’s filing places it in a competitive landscape for crypto ETFs tied to decentralized finance (DeFi) tokens. In December 2025, Bitwise Asset Management submitted an AAVE Strategy ETF registration, potentially giving it a head start in the SEC’s review process. Bitwise’s proposal plans to hold a mix of AAVE tokens and other related securities.
Analysts say this rivalry highlights growing institutional interest in regulated DeFi exposure, expanding beyond Bitcoin and Ethereum to encompass a broader set of digital asset classes. While Bitcoin and ETH spot ETFs dominate the U.S. crypto ETF market, products focused on DeFi tokens like AAVE could broaden the suite of investable digital assets available to traditional investors.
Market Reaction and Token Performance
Following the announcement of the filing, AAVE’s price saw a modest increase, reflecting investor enthusiasm around the possibility of a regulated investment vehicle tied to the token’s performance, its governance role in the Aave protocol and the trend toward mainstream acceptance of DeFi assets.
Regulatory Context and Outlook
Grayscale’s AAVE ETF proposal underscores the evolving regulatory environment for crypto investment products in the United States. After converting its Bitcoin Trust into a spot Bitcoin ETF — a landmark regulatory development — the asset manager has continued to pursue ETF conversions for other digital assets. If approved, the AAVE ETF could further catalyze institutional participation in decentralized finance and encourage similar filings from other issuers.
Approval from the SEC is not guaranteed and will involve a thorough regulatory review process. However, the surge in filings for spot crypto ETFs in 2026 suggests the market may be entering a new phase of institutional mainstreaming, bringing more varied blockchain-native assets into traditional investment portfolios.
