Growing institutional adoption has reversed Avalanche’s recent downtrend for the moment. However, the market looks weak, and there may be more downside coming.
According to data from CoinGecko, AVAX, Avalanche’s native token, surged over 10% to $26.46 after Grayscale and Franklin Templeton announced their expansion into the Avalanche network’s ecosystem.
The price increase marks a reversal from a 20% decline over the past month. Still, the cryptocurrency is down over 80% from its $145 peak established in November 2021. At the time of reporting, AVAX is trading at around $26.3, up 30% in a week, data shows.
AVAX Blasts Higher
On August 22, Grayscale Investments, the leading asset management firm, announced the launch of the Grayscale Avalanche Trust, a fund designed to give investors exposure to the AVAX token.
The new investment product joins Grayscale’s list of 20 cryptocurrency trust funds that invest in MarketDAO, Near Protocol, Sui blockchain, and Bittensor, among others. The launch of the Avalanche Trust follows Grayscale’s introduction of Sui and Bittensor Trusts earlier this month.
Commenting on the launch, Rayhaneh Sharif-Askary, Grayscale’s Head of Product & Research, said the move shows Grayscale’s ongoing commitment to diversifying its cryptocurrency offerings.
She added that Avalanche, known for its balance of scalability, security, and decentralization, “has been pivotal in advancing RWA tokenization.”
On the same day, Franklin Templeton also announced its expansion to Avalanche. The global asset manager overseeing $1.65 trillion as of July said its Franklin OnChain US Government Money Fund (FOBXX) is now available on the Avalanche blockchain, expanding its reach and accessibility.
The fund is the first U.S.-registered mutual fund to use a public blockchain for transactions and record ownership. It is accessible through Franklin Templeton’s proprietary blockchain-integrated recordkeeping system, Benji.
A Brighter Future
The expansion to Avalanche reflects the growing interest of institutions in blockchain technology for financial services. The move aims to make it easier for institutions to access and utilize blockchain technology for their financial needs, thus bridging the gap between traditional finance and blockchain.
“Bringing the Benji platform to the Avalanche network further expands access to our first-of-its-kind tokenized money market fund,” Roger Bayston, Head of Digital Assets at Franklin Templeton, noted. “We look forward to working with Avalanche’s vibrant developer community to bring new blockchain-enabled innovations into the market.”
According to data from Dune Analytics, Franklin’s FOBXX hit approximately $402 million in market value, ranking second among U.S. tokenized treasury funds. BlackRock’s tokenized asset fund, BUIDL, leads the pack with $502.6 million.
Avalanche has established several strategic partnerships that enhance its role in the tokenization of RWA. Avalanche’s blockchain infrastructure solutions are being widely used by major firms like JPMorgan or Citibank to test various applications in a controlled environment.
Earlier this year, Citi, in collaboration with Wellington Management and WisdomTree, successfully tested the tokenization of private assets utilizing Avalanche infrastructure to explore its viability in market scenarios.
In March, the Australia and New Zealand Banking Group (ANZ) partnered with Chainlink to enhance the settlement of tokenized assets using Avalanche. The ANZ used Avalanche’s customized Evergreen L1 for its operations as part of its commitment to utilizing blockchain technology for traditional finance.
Payment giant Stripe said in April it enhanced its payment network by integrating with Avalanche C-Chain. The move targets facilitating easier retail access to crypto through direct fiat-to-AVAX purchases.
Those are some of various cases that institutions are leveraging Avalanche’s capabilities to explore and implement on-chain finance solutions. The growing institutional adoption could create positive catalysts for AVAX’s price actions.
CoinGecko’s data shows that following the launch of the Grayscale Sui Trust, SUI doubled its price from around $0.5 to over $1. The cryptocurrency is currently trading at around $0.86, up 1.5% in the last 24 hours.
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