Avalanche’s Soaring Success Amidst Market Turbulence
Avalanche (AVAX) has emerged as a standout performer in the cryptocurrency market, posting an exceptional 79% weekly gain while other major tokens experienced a decline. This unexpected surge has prompted analysts to delve into the factors fueling AVAX’s impressive rally.
Partnerships with Financial Giants: JPMorgan and Citi
At the forefront of AVAX’s success are its strategic partnerships with financial heavyweights JPMorgan and Citi. These collaborations involve the Avalanche Foundation in real-world asset tokenization initiatives, a move that has garnered significant attention and contributed to AVAX’s outperformance.
Shift in Altcoin Valuation Metrics
Some analysts posit that AVAX’s surge may indicate a shift in how altcoins are valued. Traditionally, market dynamics have been heavily influenced by Bitcoin and Ethereum. Still, AVAX’s recent performance challenges this norm, suggesting a broader reconsideration of valuation metrics for alternative cryptocurrencies.
Rising Trading Volumes and Total Value Locked
The recent success of AVAX is further substantiated by a surge in daily transactions, with volumes skyrocketing from $200,000 to $4.5 million in just a few days. Additionally, daily active addresses have experienced a notable uptrend. The Avalanche network’s Total Value Locked (TVL) has grown by an impressive 82%, reaching $894 million in the past three months since September 12.
Comparative Analysis: Avalanche vs. Other Altcoins
Andersson, a market analyst, draws attention to the undervaluation of AVAX compared to its peers. Despite having a higher TVL than Solana a few weeks ago, AVAX’s market cap is now half that of Solana. This comparison highlights the unique position AVAX holds in the market.
2024 Market Outlook: Altcoins vs. Bitcoin
Analysts, including Ryan Mcmillin, the Chief Investment Officer at Merkle Tree Capital, express optimism about the future of altcoins. Mcmillin believes that certain altcoins, including AVAX, will likely outperform Bitcoin in 2024. This sentiment is supported by the performance of tokens like Immutable (IMX) and Synthetix, which have already demonstrated outperformance since 2022.
Inflows Amidst Major Crypto Declines
Despite a general decline in major cryptocurrencies like Bitcoin and Ethereum, a December 11 crypto fund flows report by CoinShares reveals that AVAX and Solana experienced inflows of $2 million and $3 million, respectively. James Butterfill, CoinShares’ Head of Research, notes that these altcoins remain “firm favorites” in the market.