#GrayscaleEyesAVESpotETFConversion

Grayscale Files to Convert AAVE Trust into Spot ETF – Major Step for DeFi in Regulated Markets
Grayscale Investments has submitted a Form S-1 registration statement to the U.S. Securities and Exchange Commission (SEC) to convert its existing Grayscale AAVE Trust into a spot exchange-traded fund (ETF). Filed on February 13, 2026, this follows similar efforts by competitors like Bitwise and continues Grayscale's strategy of turning private crypto trusts into regulated, publicly listed products.
Key Details and Sub-Points:
Filing Overview & Structure
Grayscale filed Form S-1 with the SEC to restructure the closed-ended Grayscale AAVE Trust (launched earlier, with modest AUM around $896,230 as of February 13, 2026) into a spot AAVE ETF.
The ETF would directly hold AAVE tokens, tracking the spot price closely (minus fees).
Planned listing: NYSE Arca (a major exchange for ETFs).
Custodian and prime broker: Coinbase (providing institutional-grade security and operational support).
Sponsor fee: 2.5% of net asset value (NAV), paid in AAVE tokens — higher than typical BTC/ETH ETFs (0.2–0.25%) but common for newer/altcoin products.
Strategic Motivation
Grayscale aims to expand regulated crypto offerings beyond Bitcoin and Ethereum into DeFi-native tokens like AAVE.
This builds on successful conversions (e.g., GBTC to spot BTC ETF) and responds to growing institutional demand for diversified crypto exposure.
Competition driver: Bitwise filed for an AAVE-related product earlier (December 2025), pushing Grayscale to accelerate.
Broader goal: Bring DeFi assets into mainstream finance, making AAVE accessible via 401(k)s, IRAs, and traditional brokerage accounts.
Timeline & Regulatory Path
S-1 filing is the initial registration step; SEC review typically takes months to over a year for altcoin products.
Potential hurdles: Classification of AAVE (security vs. commodity), compliance scrutiny for DeFi protocols, and broader regulatory environment under current SEC leadership.
No immediate approval expected — this is speculative and filing-driven news for now.
If approved, it would be one of the first spot ETFs for a major DeFi token.
Market Reaction & Impact (Including Liquidity, Volume, Price, and Percentage Changes)
Announcement triggered positive sentiment: AAVE price surged significantly in the days following the February 13 filing.
As of mid-February 2026 (around February 14–15), AAVE traded in the $128–$130 range, with notable 24-hour gains of around 7–8% (e.g., +7.65% to ~$128.27 on Feb 14, and continued upward momentum to ~$128–$130 by Feb 15).
Recent price action: From pre-filing levels around $115–$119 on Feb 13, it rose to highs near $130, representing a ~7–13% increase in 24 hours and over the past week in some reports (e.g., +13.56% over 7 days in one snapshot).
24-hour trading volume: Spiked notably, with figures around $330–$376 million (e.g., ~$371–$376M on Feb 15, and up to ~$375M+ in recent data), indicating heightened liquidity and trader interest.
This reflects speculative buying and volume spikes as traders front-run potential approval hype.
Long-term potential: Institutional inflows could provide sustained demand, higher liquidity, and reduced volatility for AAVE if the ETF launches successfully.
DeFi sector boost: Validates lending protocols like AAVE for TradFi; may encourage similar filings for UNI, MKR, COMP, etc.
Risks & Considerations
High sponsor fee (2.5%) could limit retail/institutional appeal compared to lower-fee BTC/ETH ETFs.
Regulatory delays/rejections possible due to altcoin status and DeFi complexities.
Competition from Bitwise and others may split attention and capital.
Broader market dependence: Success tied to favorable SEC stance and overall crypto sentiment.
Summary
Grayscale's February 13, 2026, S-1 filing to convert the AAVE Trust into a spot ETF is a significant push to bring DeFi exposure into regulated structures. While not yet approved, it acts as a bullish catalyst for AAVE — driving price gains of 7–13%+, volume surges to hundreds of millions daily, and improved liquidity — and signals growing institutional interest in decentralized finance. Traders should watch SEC updates, AAVE price action around key levels (~$118–$130 support/resistance), and any competing filings for momentum. This could reshape access to DeFi tokens if it clears regulatory hurdles.