Avalanche Seeks $1 Billion to Fund Crypto Treasury Companies and Buy Back AVAX
Avalanche, the blockchain network behind the AVAX token, is seeking to raise around $1 billion through two separate investment vehicles in the United States. The funds will be used to buy millions of AVAX tokens directly from the Avalanche Foundation, reportedly at a discount.
Deal Structure
The plan involves the creation of two “crypto treasury” companies:
-
A new digital asset treasury firm, which will be backed by private investment firm Hivemind Capital. This vehicle aims to raise up to $500 million, with Anthony Scaramucci serving as an adviser.
-
An existing Nasdaq-listed company, which will be converted into a treasury vehicle through a SPAC deal sponsored by Dragonfly Capital. This second entity also targets up to $500 million.
The first deal could close as early as the end of September, while the second may finalize in October.
Context and Supply
Avalanche has a maximum supply of about 720 million AVAX tokens, with roughly 420 million currently in circulation. By using treasury vehicles to accumulate tokens, the Foundation is betting on creating long-term holders and instilling confidence in the market.
Market Impact
The initiative mirrors a broader trend across the crypto sector, where similar “hoarding” entities have already raised more than $16 billion this year. While blockchains like Bitcoin and Ethereum have seen token prices soar during the current market cycle, AVAX has lagged behind.
Analysts suggest that large-scale purchases of AVAX at discounted prices could support the token’s market, signaling institutional interest and potentially stabilizing its value. However, the strategy also raises questions about transparency, regulatory oversight, and how the discount mechanism will affect other market participants.
Disclaimer and Risk Warning
coinweck does not endorse or is responsible for any content, accuracy, quality, advertising, products, or other materials on this page. The image used in this article is for informational purposes only and is provided to us by a third party. coinweck should not be held responsible for image copyright issues. Contact us if you have any issues or concerns. Readers should do their research before taking any actions related to the company.