The nonprofit organization behind the cryptocurrency Avalanche, the Avalanche Foundation, is reportedly raising $1 billion to launch a digital asset treasury project and accumulate assets.
According to a report by the Financial Times on Thursday, citing informed sources, the Avalanche Foundation is actively discussing with investors plans to launch a digital asset treasury company and transform another company into a "cryptocurrency hoarding" tool.
Reportedly, the nonprofit organization expects to raise $1 billion, which will be used to purchase Avalanche (AVAX) from the foundation at a discounted price.
According to CoinGecko data, as of the time of writing, Avalanche is the 21st largest cryptocurrency by market capitalization, valued at $12.2 billion.
The report states that the Avalanche Foundation's $1 billion fundraising involves two transactions, including a $500 million private placement led by New York blockchain investment firm Hivemind Capital, investing in an existing company listed on Nasdaq.
It is reported that the first transaction could be completed by the end of the month, with well-known cryptocurrency investor and former White House communications director Anthony Scaramucci serving as an advisor.
The second transaction is conducted through a special purpose acquisition company and involves major industry investor Dragonfly Capital. This transaction is also seeking to raise up to $500 million but may not be completed until October, sources told the Financial Times.
Cointelegraph reached out to Ava Labs, Hivemind, and Dragonfly for comments on the potential fundraising, but did not receive a response by the time of writing.
The report adds that Hivemind and Dragonfly are expected to purchase AVAX tokens from the Avalanche Foundation at a discounted price.
At today's price, $1 billion would convert to approximately 34.7 million AVAX, accounting for about 8% of the 422.3 million Avalanche tokens in circulation.
Similar to cryptocurrencies like Bitcoin (BTC), which has a supply cap of 21 million BTC, Avalanche has a supply limit of 720 million AVAX.
Launched in September 2020, Avalanche is an open-source blockchain platform that supports decentralized applications and smart contracts. The protocol was developed by Ava Labs, a startup founded by Emin Gün Sirer from Cornell University.
According to CoinGecko data, the native cryptocurrency of the Avalanche blockchain, AVAX, reached a historical high of over $134 shortly after its launch, peaking at around $135 in November 2021. The cryptocurrency then experienced a sharp sell-off in early 2022 and has not climbed above $65 since.
As of the time of writing, AVAX is trading at $28.8, with a significant increase of 16% over the past week.
As a major altcoin, Avalanche has recently gained significant momentum in the industry. In August, major industry investor Grayscale Investments submitted an application to the U.S. Securities and Exchange Commission (SEC) to launch a spot Avalanche exchange-traded fund (ETF).
Related: BitMine significantly increased its holdings in Ethereum (ETH) this week, with a total holding amount of $9.2 billion.
Original article: “Report: Avalanche Foundation Plans to Raise $1 Billion to Build AVAX Treasury Company”
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