Avalanche Foundation Plans $1 Billion Fundraise for Crypto Treasury Companies

TLDR

• Avalanche Foundation plans to raise $1 billion through two separate deals to create crypto treasury companies
• The funds will be used to purchase AVAX tokens from the foundation at a discounted price
• First deal involves $500 million private investment led by Hivemind Capital in a Nasdaq-listed company
• Second deal uses a SPAC structure with Dragonfly Capital involvement, also targeting $500 million
• Anthony Scaramucci is advising on the first deal, which could close by end of September

The Avalanche Foundation is pursuing a $1 billion fundraising effort to establish two crypto treasury companies. These companies will hold millions of AVAX tokens purchased from the foundation at discounted prices.

The nonprofit organization behind the Avalanche blockchain has structured this initiative through two separate deals. Both transactions aim to create vehicles that can accumulate and hold AVAX tokens for institutional investors.

The first deal involves a $500 million private placement led by Hivemind Capital, a New York-based blockchain investment firm. This investment targets an existing company listed on Nasdaq that would be converted into a crypto treasury vehicle.

Anthony Scaramucci, former White House communications director and crypto investor, serves as an advisor on this transaction. Sources familiar with the matter indicate this deal could be finalized by the end of September.

First Deal Structure and Timeline

The Hivemind Capital-led investment represents half of the total fundraising goal. The target company already trades on the Nasdaq exchange, providing immediate public market access for investors seeking AVAX exposure.

This approach mirrors the strategy used by other crypto treasury companies. These firms purchase digital assets and hold them on their balance sheets, allowing traditional investors to gain crypto exposure through stock purchases.

The foundation expects to complete negotiations for this first transaction within weeks. The rapid timeline suggests advanced discussions between all parties involved.

SPAC Deal with Dragonfly Capital

The second transaction uses a Special Purpose Acquisition Company structure. Dragonfly Capital, a major crypto investment firm, plays a key role in this arrangement.

This SPAC deal also targets $500 million in funding. However, the timeline for completion extends into October, according to sources close to the discussions.

The SPAC structure provides another path to public market listing. This vehicle would purchase AVAX tokens from the foundation and offer public investors exposure to Avalanche’s native cryptocurrency.

Both investment firms would acquire AVAX tokens at prices below current market rates. This discount structure provides immediate value to the treasury companies while generating capital for the Avalanche Foundation.

Market Context and Token Economics

At current prices around $29, the $1 billion would translate to approximately 34.7 million AVAX tokens. This represents about 8% of the 422.3 million tokens currently in circulation.

Avalanche maintains a capped supply of 720 million AVAX tokens. This limited supply structure resembles Bitcoin’s fixed issuance model, creating scarcity dynamics for the token.

The cryptocurrency reached all-time highs above $134 in November 2021. Since then, AVAX has traded within a lower range, not exceeding $65 in recent years.

AVAX has gained 16% over the past seven days following news of the fundraising plans. The token trades at $28.8 as institutional interest appears to be building.

The Avalanche blockchain launched in September 2020 as an open-source platform supporting smart contracts and decentralized applications. Cornell University’s Emin Gün Sirer founded the development company Ava Labs.

Recent developments include Grayscale Investments filing for a spot Avalanche ETF with the Securities and Exchange Commission in August. This filing represents another institutional pathway for AVAX exposure.

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