The DeFi project based on Bitcoin, Avalon Labs, is exploring the possibility of submitting an application to the SEC to create the industry’s first ETF backed by Bitcoin-based debt.

Avalon Labs: Opening the Door for Massive Adoption of Bitcoin-Backed Products

Avalon is on a mission to bring Bitcoin-backed financial products to both crypto and non-crypto users alike. Bitcoin, the only true digital gold, has already proven its value. With more financial… pic.twitter.com/JA4dh7EMMx
— Avalon Labs 🎩🔮 (@avalonfinance_) February 12, 2025

The organization aims to increase the availability of financial products based on the first cryptocurrency in line with regulatory requirements.

Registering the exchange-traded fund (ETF) will allow the expansion of Bitcoin lending to traditional finance (TradFi) through regulated structures.

To implement this initiative, Avalon Labs will involve leading law firms to help assess the regulatory framework for the proposed instrument and prepare the necessary materials for the application.

The ETF is expected to be structured to meet the exclusion criteria under Regulation A+ of the Securities Act of 1933.

With registration, retail investors will gain access to Bitcoin-backed financial products within a familiar structure.

“Although successful precedents in the crypto industry are limited, our analysis of previous cases approved by the SEC shows a viable path forward. The role of the agency is to protect retail investors and ensure fairness, not to obstruct technological progress,” commented Avalon Labs co-founder Venus Lee.

XRP-ETF

On February 13, the SEC may review Grayscale’s application for a spot XRP ETF, according to FOX Business journalist Eleanor Terrett.

As per this very helpful table from @JSeyff and @EricBalchunas, we could see the @SECGov acknowledge @Grayscale’s $XRP spot ETF filing as early as Thursday (2/13), if indeed it chooses to acknowledge it. The SEC usually has around 15 days to acknowledge a 19b-4 filing and… https://t.co/cN9skLUSHq
— Eleanor Terrett (@EleanorTerrett) February 11, 2025

Terrett responded to Bloomberg analysts’ opinions on the potential approval of ETFs based on Litecoin, Solana, Dogecoin, and XRP.

Analysts suggested that the 19b-4 filings for the last two assets may be considered this week (for the first two, decisions have already been made).

“Usually, the SEC has about 15 days to confirm, and Grayscale submitted its proposal for conversion on January 30. In any case, this should give us a good sense of how the current composition of the Commission views XRP,” commented Terrett.

Bloomberg analysts estimate the likelihood of ETF approval for all the mentioned altcoins at 65-90%. The final deadline for document consideration is in October.

Earlier, NYSE Arca submitted a 19b-4 filing to convert Grayscale Cardano Trust into an ETF.

As a reminder, in January, Avalon Labs introduced its governance token AVL. 20% of the total token supply is designated for user rewards.

Forbes author Lior Shimron predicted “exponential growth” in Bitcoin-DeFi in 2025. Similar sentiments were shared by Michael Harvey of Galaxy Digital.