Avalanche Foundation Eyes $1B Treasury Push

The Avalanche Foundation is in advanced talks to launch two crypto treasury companies in the US as part of a $1 billion fundraising push.

That’s according to a Financial Times report that said one deal, led by Hivemind Capital with SkyBridge’s Anthony Scaramucci as an adviser, aims to raise up to $500 million through a Nasdaq-listed company.

Another $500 million raise is being planned via a special purpose acquisition vehicle backed by Dragonfly Capital, the report said, citing two sources familiar with the matter. The story said the deals are expected to close in the coming weeks. 

Both of the companies will then purchase millions of AVAX, which is the native token of the Avalanche blockchain, at a discounted price, the report said. 

Analysts Warn Crypto Treasury Companies Are At Risk

The AVAX treasury plan comes as analysts warn that digital asset treasury companies (DATs) are facing risks from falling crypto and share prices that are compressing premiums and making fundraising harder, the report said.

New York Digital Investment Group (NYDIG) warned in a Sept. 5 report that “a bumpy ride may be ahead” for DATs as incoming mergers and financing deals risk a “substantial wave of selling” from shareholders.

It noted investor anxiety over upcoming token unlocks, and said increased share issuance, profit-taking, and limited differentiation strategies could all be behind the squeeze on premiums.

SharpLink Gaming, the second-largest corporate holder of Ethereum (ETH) globally, has seen its share price plummet over 27% in the last month, data from Google Finance shows. 

SharpLink Gaming share price (Source: Google Finance) 

BitMine Immersion Technologies (BMNR) has tumbled more than 22%, while Strategy (MSTR) has slumped over 18%.

Avalanche Community Still Bullish On AVAX Treasury Plans

Still, the Avalanche community seems to have responded positively to the reported AVAX treasury plans. 

In the last 24 hours, the price of AVAX has soared more than 7% to trade at 5:20 a.m. EST, according to CoinMarketCap data. This has added to the crypto’s positive weekly performance, boosting the altcoin’s 7-day gain to 16%.

AVAX/USD daily chart (Source: GeckoTerminal)

Looking at the daily chart for AVAX, the crypto has managed to break out of a medium-term consolidation channel between $22.92 and $26.05. 

That has opened up an opportunity for AVAX’s price to attempt a challenge at the $29.52 resistance level. Clearing this technical barrier might lead to a continued climb to as high as $32.74 in the short term. Adding to the bullish outlook is the potential buy pressure from the aforementioned AVAX DATs. 

Looking at the indicators on the daily chart, momentum seems to still be in favor of bulls. The Moving Average Convergence Divergence (MACD) line is breaking away above the MACD Signal line, which is a classic sign of strengthening bullish momentum.

In addition to that, the shorter 9 Exponential Moving Average (EMA) is positioned above the 20 EMA. Both EMAs are also rising and acting as dynamic support levels for AVAX’s price.

Lastly, the Relative Strength Index (RSI) has been on the rise in recent days, and shows there is still room for AVAX to rise before it enters overbought conditions.

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