AVAXAvalanche (AVAX), a cryptocurrency that has been turning heads recently, stands out as one of the few digital assets that managed to thrive in a bearish market. While major cryptocurrencies like Bitcoin and Ethereum faced a 6% decline in December, AVAX surged, posting an impressive 13.6% gain in just 24 hours, according to CoinGecko data. This remarkable performance has left analysts and investors alike wondering about the driving forces behind AVAX’s resilience.
Partnerships with JPMorgan and Citi fuel excitement
One key factor contributing to AVAX’s recent success is its strategic partnership with financial giants JPMorgan and Citigroup (Citi). These partnerships center around real-world asset (RWA) tokenization initiatives led by the Avalanche Foundation. Ryan Mcmillin, the Chief Investment Officer at Merkle Tree Capital, noted that the involvement of such established players in the traditional financial sector has generated significant enthusiasm for AVAX. Mcmillin pointed out that the Avalanche network has witnessed a substantial increase in daily transactions, skyrocketing from approximately $200,000 to an impressive $4.5 million over the last couple of days. Additionally, daily active addresses have shown a consistent upward trend, adding to the positive sentiment surrounding AVAX.
Rapid growth in total value locked and trading volume
Another compelling reason behind AVAX’s ascent can be attributed to its network’s growth metrics. The total value locked (TVL) within the Avalanche network has surged by a staggering 82%, escalating from $490 million to $894 million over the past three months since September 12th. Simultaneously, the trading volume of AVAX tokens has experienced an astronomical surge of 2436% during the same period, as reported by DefiLlama data. These remarkable figures underscore the growing interest and activity within the AVAX ecosystem, attracting both traders and long-term investors.
Undervaluation in the crypto market
Henrik Andersson, Chief Investment Officer of Apollo Crypto, believes that AVAX was previously undervalued within the broader cryptocurrency market. He compared AVAX to other prominent altcoins, stating that a few weeks ago, Avalanche boasted more TVL than Solana, despite having only a quarter of the market capitalization. Although AVAX’s TVL still surpasses that of Solana, its market cap now stands at only half of Solana’s. Andersson expressed confidence in the potential of select altcoins to outperform Bitcoin in the coming years, citing Immutable (IMX) and Synthetix (SNX) as examples of tokens that have already outperformed Bitcoin since 2022.
Inflows of capital to AVAX and Solana
Despite the recent price declines observed in major cryptocurrencies like Bitcoin and Ethereum, Avalanche and Solana have managed to attract significant inflows of capital. In a crypto fund flows report published in December, James Butterfill, Head of Research at CoinShares, noted that these two altcoins received substantial investments, with Solana receiving $3 million and Avalanche following closely with $2 million. Butterfill referred to them as “firm favorites” in the ever-evolving landscape of alternative cryptocurrencies.
Avalanche (AVAX) has demonstrated exceptional resilience and growth amidst a challenging crypto market environment. Its strategic partnerships with financial giants JPMorgan and Citi, coupled with impressive network metrics such as total value locked and trading volume, have propelled AVAX into the spotlight. Moreover, the perception of being undervalued in the crypto market has garnered significant attention from both institutional and retail investors. As AVAX continues to chart its course, it remains one of the few digital assets capable of defying market trends, making it an intriguing prospect for the future.
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