On January 28, 2026, Avalanche (AVAX) was trading at $12.05 on the Gate platform. However, in the traditional financial market, its ecosystem affiliate AVAX One faced a dramatically different fate. AVAX One, a digital asset reserve company advised by SkyBridge Capital founder Anthony Scaramucci, saw its stock price plunge over 32% after filing with the SEC to register approximately 74 million insider-held shares for potential sale.
01 Core Event: SEC Filing and Market Panic
Recently, AVAX One submitted a key filing to the U.S. Securities and Exchange Commission (SEC), registering around 74 million shares held by company insiders, making them eligible for public trading.
Although the filing did not explicitly state whether or when these shares would be sold, it immediately triggered a sharp market reaction. Following the submission, AVAX One’s stock price quickly tumbled, with a single-day drop exceeding 32%.
AVAX One is a Nasdaq-listed company focused on bridging the Avalanche ecosystem and traditional finance, building digital asset vaults and driving DeFi innovation. The company primarily holds AVAX tokens and related Avalanche ecosystem assets.
The market’s response to this plunge was intense, with core concerns centered on the potential dilution caused by the possible sale of 74 million shares. Such registrations are often interpreted as signals that insiders may be planning to reduce their holdings, especially during sensitive periods for the crypto market, which can easily trigger a chain reaction.
02 Dilution Mechanism: Why Is the Market So Sensitive?
To understand the market’s sharp response, it’s important to consider the basics of equity dilution. When a large number of new shares may enter the market, the ownership percentage and earnings per share for existing shareholders can be diluted.
AVAX One’s filing indicates that up to 74 million shares could enter market circulation—a figure substantial enough to exert significant downward pressure on the stock price. The market fears that if these shares are dumped in a short period, it would far exceed current absorption capacity, potentially causing a price collapse.
Crypto asset stocks differ from traditional tech stocks, typically displaying higher volatility. Stocks tied to digital assets often have elevated beta values, meaning they amplify overall market swings. In such cases, any negative news can trigger disproportionately large declines.
Historically, similar large-scale registrations in the tech and biotech sectors have often led to short-term price pressure. But for a growing digital asset company like AVAX One, the impact may be more lasting and pronounced.
03 Data Analysis: AVAX Market Performance and Correlation
While AVAX One’s stock was plummeting, the Avalanche native token AVAX showed a different market trend. According to Gate platform data on January 28, 2026, the AVAX price was $12.05, posting a 2.11% gain over 24 hours.
Currently, AVAX has a circulating supply of 431.3 million tokens, a total supply of 462.97 million, and a maximum supply of 720 million. Its current market capitalization stands at $5.2 billion.
However, AVAX’s price has still faced pressure over the past year, dropping 64.77% compared to a year ago. This performance likely reflects broader crypto market cycles and the development of the Avalanche ecosystem.
Notably, although AVAX One holds AVAX and related ecosystem assets, the price movements of the two are not fully synchronized. This suggests that investors may view the listed company’s stock and its underlying crypto assets as distinct investment products, each with independent price drivers.
04 Industry Context: Transformation Pressures for Digital Asset Management Firms
The AVAX One case highlights a broader industry phenomenon: digital asset management companies face unique challenges as they bridge traditional finance and the crypto world. As these firms seek legitimacy and capital in public markets, they must undergo rigorous scrutiny from regulators like the SEC.
It’s worth noting that AVAX One is not without a response strategy. Prior to this incident, the board had approved a one-year stock buyback plan, with a maximum amount of $40 million.
CEO Jolie Kahn stated that repurchasing shares at current price levels is an efficient use of capital and demonstrates the company’s confidence in its long-term strategy and market value.
This seemingly contradictory approach—preparing for share issuance while announcing buybacks—highlights the complex challenge digital asset companies face in balancing early investor liquidity needs with the stability of public market stock prices.
05 Company Response and Path to Market Recovery
How AVAX One and related parties respond to this sharp market reaction will determine the company’s future trajectory. Transparent communication is key to restoring market confidence, especially during such sensitive times.
The company needs to clearly explain the background and purpose of registering 74 million shares, and whether insiders have concrete plans to reduce their holdings. Any vague statements could further fuel market concerns.
Market analysts point out that companies successfully navigating large-scale insider share registrations typically take several key actions:
- Issue clear statements explaining the reasons and background for the registration
- Demonstrate ongoing business growth and increasing assets under management (AUM) to offset dilution concerns
- If sales do occur, establish and disclose a planned, structured sale arrangement
AVAX One’s association with Anthony Scaramucci and SkyBridge Capital adds credibility. The company now needs to leverage this relationship to reassure the market and prove its long-term value proposition remains intact.
06 Investor Perspective: From Panic to Rational Assessment
For investors, this event is a pivotal moment to evaluate digital asset companies. Rational analysis should move beyond initial market panic and focus on fundamentals and long-term prospects.
Investors must distinguish between "potential sales" and "actual sales." SEC registration only makes sales possible; it doesn’t guarantee they will happen. Insiders may register shares for various reasons, such as estate planning or portfolio diversification, not necessarily because they lack confidence in the company’s outlook.
Key monitoring indicators include the company’s official follow-up statements, actual insider transactions (disclosed via SEC Form 4 filings), and quarterly financial reports, particularly growth in assets under management.
From a broader investment perspective, the share price of digital asset companies often diverges from the net value of the crypto assets they hold. AVAX One’s previously announced buyback plan was specifically aimed at addressing the "discount between stock price and token asset net value."
Outlook
Data from crypto market analytics platforms show AVAX tokens have a circulating supply of 431.3 million and a market capitalization of $5.2 billion. Meanwhile, AVAX One, which holds a large amount of AVAX assets, has seen its stock weather a separate storm in the traditional financial market.
The company’s stock price dropped more than 32% following the registration news. This turbulence not only affects the company’s share price but also poses potential challenges for the Avalanche ecosystem’s reputation in traditional finance.
