Avalanche to establish AVAX treasury company with $1b

The Avalanche Foundation plans to raise $1 billion to buy million of AVAX at a discount price. The firm is in talks with investors to establish two treasury firms to hoard more of its tokens within the next few weeks.

According to a report from the Financial Times, insiders say that the Avalanche Foundation, the non-profit behind the AVAX (AVAX) token, is preparing to establish two crypto-focused companies in the United States. One would serve as its designated “digital asset treasury” company, while the other would be converted into a similar crypto-focused vehicle.

At the moment, the company is in talks with several investment firms as it hopes to raise about $1 billion to purchase millions of AVAX. The tokens would then be held by the foundation at a “discounted price.”

The first project will be led by web3 investment firm Hivemind Capital. The collaboration between the two firms is expected to raise up to $500 million from publicly listed companies on Nasdaq. Renowned crypto investor and former White House Press Secretary Anthony Scaramucci will be serving as an advisor on the deal.

According to the report, insiders say that the first deal is set to be finalized at the end of the month. Both Avalanche and Scaramucci did not respond to a request for comment from the Financial Times.

Meanwhile, the second deal will be executed through a special purpose acquisition vehicle sponsored by another firm, Dragonfly Capital. Similar to the first deal, the second deal also has a target to raise up to $500 million. However, the second deal will take longer to close; with people close to the matter telling FT that it will be concluded at least by October this year.

The plan to acquire $1 billion worth of AVAX by its parent-foundation comes amidst a recent sharp decline in share prices of many crypto treasury companies such as Metaplanet, Strategy and others. Though most of them are known for accumulating Bitcoin (BTC) and Ethereum (ETH), it does signal a shift in the market with traders losing confidence in crypto-hoarding firms.

On the other hand, tokens linked to Solana (SOL) and Ethereum have been performing well in the past few months. The boost can be attributed to a surge in fundraising by companies planning to stockpile crypto assets. According to data from Kaiko, companies have raised more than $16 billion this year to purchase crypto assets.

Avalanche price analysis: Is AVAX doing well?

According to data from TradingView, within the past hour the Avalanche token has surged from the mid-$25 range to just above $29. This rally marks a clear breakout from the relatively sideways price action seen in early September, where AVAX consolidated between $24 and $26.

The sharp upward momentum suggests renewed buying interest. The increase in investor confidence is possibly driven by the recent news of Avalanche Foundation’s plans to buyback tokens to establish crypto treasury companies in the U.S.

At press time, the token has been on the rise with a 10.7% increase in the past 24 hours. It continues the upward momentum it began earlier this week, as it’s been increasing by 16.4% in the past week. It grows nearer and nearer to the $30 threshold.

However, resistance is forming at the $30 psychological level, where selling pressure has already emerged. On the downside, support is likely to be found near the $27.50 to $28 range, an area that acted as a breakout zone during the rally. If AVAX holds above this support on a pullback, it would reinforce the bullish structure. On the other hand, if it falls below $27 it could backtrack to $26.

The RSI recently peaked above 70, signaling overbought conditions before pulling back to around 62.93. This indicates that while AVAX remains in bullish territory, the market may be entering a cooling-off phase after the sharp rally. Short-term traders could interpret this as a potential retracement or sideways consolidation before it could soar any higher.