Avalanche (AVAX), a major cryptocurrency, has recently demonstrated a remarkable resilience in the market, registering an impressive 79% weekly gain while other cryptocurrencies have experienced declines. This surge in AVAX’s value contrasts sharply with the 6% drop in Bitcoin (BTC) and Ether (ETH) on December 11, as reported by CoinGecko.
Analysts attribute this surge in AVAX’s value to a combination of factors. One significant contributor is the recent partnerships formed by the Avalanche Foundation with major financial institutions like JPMorgan and Citi for their asset tokenization initiatives. These partnerships have likely fueled investor confidence and interest in AVAX.
Ryan Mcmillin, Chief Investment Officer at Merkle Tree Capital, pointed out that the excitement around AVAX could be linked to a dramatic increase in daily transactions, which jumped from around $200,000 to $4.5 million over a few days. Additionally, there has been a noticeable uptrend in daily active addresses on the network.
The Avalanche network’s Total Value Locked (TVL) has also seen substantial growth, increasing by 82% from $490 million to $894 million in the three months since September 12. Concurrently, the trading volume of the AVAX token surged by 2,436%, according to DefiLlama data.
Henrik Andersson, Chief Investment Officer at Apollo Crypto, suggested that the market had previously undervalued AVAX compared to other cryptocurrencies like Solana. He noted that although Avalanche had a higher TVL than Solana, its market cap was significantly lower, a discrepancy that is now correcting.
Looking ahead to 2024, Andersson anticipates that certain altcoins might outperform Bitcoin. He cited Immutable (IMX) and Synthetix (SNX) as examples of tokens that have already shown stronger performance than Bitcoin since 2022.
In a recent crypto fund flows report, James Butterfill, Head of Research at CoinShares, highlighted that while major cryptocurrencies like Bitcoin and Ether faced steep price declines, Solana (SOL) and Avalanche attracted inflows of $3 million and $2 million, respectively. This trend underscores their continued popularity in the altcoin sector.
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