Avalanche (AVAX) is one of the growing altcoins for the past day, after the Avalanche Foundation announced plans to establish a $1B treasury firm. The Foundation will seek a listing through a merger with an existing company, and establish one additional entity.
The Avalanche Foundation announced plans to launch two treasury companies in the USA, establishing a new entity and merging with a listed company. The Foundation aims to build a $1B AVAX treasury, boosting the value of its token.
The first deal will raise $500M to invest in a NASDAQ-listed company. The funds will be raised in a private placement led by Hivemind Capital.
The second deal will build a special-purpose acquisition company, in a raise led by Dragonfly Capital, aiming to raise another $500M. This deal may not be concluded until October.
Following the news, AVAX rallied to $29.12, reaching a three-month high. AVAX has been recovering gradually, as the network rebuilt its traffic through DeFi and selected games.
The Avalanche chain underwent several transformations during the years-long bear market, shifting from a gaming hub to a DeFi network.
Avalanche aims to become the main platform for capital markets
Avalanche remains one of the more prominent L1 chains, with a proven track record for handling a significant transaction load. The network aims to become the go-to digital ledger for capital markets, competing with the current leaders Ethereum, Solana and BNB Chain.
Based on an FT report, the non-profit Avalanche Foundation is in talks with companies like BlackRock and Visa to create the two entities for the US market. The entities hope to raise up to $1B, one of the highest treasury funds, expecting at least one of the deals to conclude in September.
The AVAX deal will use some of the reserves of the Avalanche Foundation, offering the tokens at a discounted price, said persons familiar with the potential sale. The Avalanche Foundation has not yet issued an official statement.
The AVAX treasury plans arrive at the tail of a series of altcoin reserves, as Cryptopolitan reported earlier. Some of the treasuries do not buy tokens on the open market, but use the existing reserves of early investors, teams, or other big holders. Selling stocks tied to a crypto asset is a way to monetize those reserves, which could not be sold on the open market.
Recent research by Kaiko shows treasury activity is concentrated in a handful of the top digital assets. Smaller altcoin treasuries are currently negligible, making the plans of the Avalanche Foundation more ambitious.
Avalanche grows on-chain activity, asset value
Avalanche has recovered around $2B in asset value, still below its 2021 peak of over $9B. New DeFi protocols have deployed on the chain, most notably a native version of Aave and Euler.
Avalanche C-Chain also saw over $30M in net inflows for the past month, actively interacting with the wider crypto ecosystem. However, for now, AVAX lags behind SOL and other blue-chip tokens, as altcoin momentum is closely watched for signs of reversal and risks of loss.
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