An NYSE-Affiliated Exchange Will Settle Tokenized Stocks on Avalanche. What Does That Do to the AVAX Price?
Avalanche just landed a spot in the NYSE's tokenized stock plans, and AVAX jumped on the news. Yet the announcement leaves out one detail about the token itself, and past tokenization rallies have a habit of fading.
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Avalanche (CRYPTO:AVAX) will serve as the ledger for the clearing firm of a new NYSE-affiliated trading venue for tokenized stocks, Ava Labs said today. The venue is designed for continuous trading, clearing, and settlement, pending regulatory approval.
A tokenized stock is a share recorded as a token on a blockchain, so it can trade and settle outside traditional market hours. Ava Labs, the primary developer behind Avalanche, made the announcement but did not name the clearing firm or give a launch date.
AVAX trades at about $9, up 8.9% over the past 24 hours. In contrast, Ethereum (CRYPTO:ETH) fell 4.4%, and Solana (CRYPTO:SOL) fell 2.3%. On the same day, Charles Schwab (NYSE:SCHW | SCHW Price Prediction) added Avalanche and Solana to the cryptocurrencies Schwab Crypto accounts can trade. With two headlines behind the jump, does the NYSE deal give AVAX a reason to keep rising?
Avalanche Will Run the NYSE Venue’s Clearing Ledger, Pending Approval
Intercontinental Exchange (NYSE:ICE), which owns the NYSE, earns its revenue from trading and clearing fees, market data, and mortgage technology. The new venue will be an alternative trading system (ATS), an SEC-registered platform that a broker-dealer runs under lighter rules than a full stock exchange. Its clearing firm will handle the back office, confirming who owes what after each trade and moving the shares and cash.
Avalanche will provide the ledger for that back office. According to the announcement, the ATS “will use Avalanche as its blockchain, creating dedicated infrastructure” for clearing. Dennis Lee, head of digital issuance at NYSE, said the venue will trade stocks issued on various blockchains, with Avalanche running the ledger that settles them. Lee works for the NYSE, so his view naturally leans toward the platform.
Reports suggest the platform combines NYSE’s Pillar matching engine with on-chain clearing, settlement, and custody, funded with stablecoins. However, regulators still have to approve it before any trade clears. ICE spent about a year testing Avalanche for around-the-clock trading of tokenized stocks and ETFs, so a public launch date could be the next disclosure to watch.
Other players are also eyeing this market. Formation Securities has informed the SEC that it plans a Solana-based tokenized securities venue, targeting an early 2027 launch. Moreover, BlackRock’s tokenized fund, which added Avalanche as one of several chains, first launched on Ethereum, so Avalanche doesn’t control Wall Street’s tokenized assets on its own.
The NYSE Deal Highlights Avalanche Technology, Not the AVAX Token
Ava Labs says the clearing system “will be built on top of Avalanche technology,” while the Avalanche Foundation, which promotes the network, called it “an important milestone in bringing global financial markets onchain.” However, the announcements do not mention the AVAX token as an asset for settlement, fees, or staking. And since the platform plans to fund trades with stablecoins, the cash side of each trade looks likely to move in dollar-pegged tokens.
The phrase “dedicated infrastructure” suggests a custom Avalanche blockchain open only to approved participants. On such chains, the operator can pick the fee token, although validators on custom chains still pay network fees in AVAX, as our September coverage noted. So while some demand for AVAX could come from this venue, it might amount only to a thin fee stream.
AVAX Price Has Faded After Previous Tokenization News
Earlier this year, AVAX surged on tokenization announcements but later gave back those gains. It jumped 55% from September 17 to September 21 on ICE’s testing and the Helicon upgrade, then dropped 8% once Helicon went live. AVAX also slipped 3.5% in the October week when we compared BlackRock’s choice with Franklin Templeton’s.
After Dubai’s courts started recording orders on Avalanche, AVAX traded at $10 on October 15 but fell 7.4% by October 22. The November 9 jump has helped the short-term chart, as AVAX bounced from a 30-day low close of about $8 on November 8 and now trades above both its 20-day and 200-day moving averages.
However, the long-term chart remains weak. AVAX still trades below its 50-day average near $10, has lost 13.6% over the past 30 days, and remains 93.8% below its all-time high of about $145 from November 21, 2021.
What Does the NYSE Deal Mean for the AVAX Price?
The NYSE deal is a significant step for Ava Labs, but its effect on the AVAX price is small and unproven. Ava Labs gains the NYSE’s name on its ledger and a reference customer for banks weighing tokenization. Token holders get a possible fee stream with no published trading volume behind it. Previous AVAX rallies on tokenization news have fizzled within weeks, and this deal has given AVAX only one sharp day so far.
AVAX could gain a more substantial source of demand if the ATS receives regulatory approval and Ava Labs, ICE, or the clearing firm confirms the ledger requires AVAX for fees or validator staking, or publishes settlement volume. If AVAX instead closes back below its November 8 close of about $8, the NYSE jump will have fully reversed.
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Sam Daodu is a crypto analyst and the editor of 24/7 Wall St.'s Crypto Desk, where he covers Bitcoin, XRP, Ethereum, Solana and the altcoins investors search for most. His work focuses on price levels, spot ETF flows, on-chain data and the regulatory decisions that move crypto markets, written so a first-time buyer and a seasoned trader can both use it.
Sam has written about crypto professionally since 2019 and has published more than 2,000 articles. Before joining 24/7 Wall St., he wrote for crypto media outlets and Web3 companies and ghostwrote for crypto founders and token launches. His analysis is syndicated on Yahoo Finance, MSN and AOL and has been cited by other crypto news sites. He also founded MacLabs Marketing, a content and personal branding agency for crypto founders and executives.
When he isn't reading charts, Sam is usually at the gym or watching One Piece, a series he maintains has better tokenomics than most altcoins.
