Grayscale Investments has filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) to convert its existing Aave Trust into a spot exchange-traded fund. If approved, the product will trade as the Grayscale Aave ETF on NYSE Arca under the ticker GAVE — the first direct AAVE token ETF filing in U.S. markets.
Key Parameters of the Grayscale Aave ETF
The proposed ETF directly holds AAVE tokens, offering spot exposure rather than futures or derivatives strategies. Key details include an expense ratio of 2.5%, with Coinbase serving as both custodian and prime broker. The conversion would shift Grayscale's closed-end trust into a publicly traded ETF, enhancing liquidity, transparency, and accessibility for institutional and retail investors alike.
How It Differs from Bitwise's Aave Strategy ETF
Grayscale is not the only player targeting Aave. In December 2025, Bitwise Asset Management submitted its own Bitwise AAVE Strategy ETF. However, the two approaches diverge: Grayscale's ETF directly holds tokens, while Bitwise's strategy ETF allocates up to 60% to AAVE tokens and at least 40% to other related securities, such as AAVE-exposed funds. Both firms are racing to secure the first U.S.-approved Aave-focused ETF.
Aave Protocol Fundamentals and Token Price
Aave is the largest decentralized lending protocol by total value locked (TVL), which exceeds $10 billion according to DefiLlama. AAVE holders can participate in governance, stake for yield, secure the protocol, and engage in borrowing and lending. Despite these fundamentals, the token currently trades around $126 (CoinMarketCap). Approval could unlock institutional inflows by offering regulated DeFi exposure without self-custody.
Global Precedents Already Exist
While no spot Aave ETF has been approved in the U.S., Europe already offers such products. In November 2025, 21Shares listed an exchange-traded product on Nasdaq Stockholm. Earlier in 2023, Global X launched a similar product in Germany. If the SEC grants approval, Grayscale would become the first to place the U.S. on the global map for regulated AAVE exposure.
SEC's Evolving Stance on Altcoin ETFs
Grayscale's filing joins a surge of altcoin ETF applications, including those for Uniswap and Zcash. Though the SEC has not formally loosened its crypto policy, recent approvals suggest a gradual shift toward structured crypto-asset products. The Grayscale move could test whether the SEC is willing to extend ETF approvals beyond Bitcoin and Ethereum to DeFi-centric tokens.