One of the best performing cryptocurrencies in recent weeks, avalanche (CRYPTO: AVAX) It has exploded higher again today. At 9:45 am ET, Avalanche has soared an additional 13.6% in the last 24 hours. Over the past week, this token has gained more than 45% in an impressive rally that has pushed Avalanche into the top 10 in terms of market capitalization.
Generally speaking, the stock and crypto markets have rebounded today on the news that President Joe Biden’s Build Back Better plan may not be completely dead in the water. Senator Joe Manchin reportedly spoke with Biden last night, stoking bets that this stimulating deal may still be in place.
However, the specific token catalysts that have fueled Avalanche over the past week appear to be driving this token as well. Specifically, investors seem to focus on one key BofA analyst note from last week pointing to Avalanche as a credible alternative to Ethereum due to this platform’s “faster completion (settlement) time and lower costs than alternative blockchains.”
Importantly, today’s surge places Avalanche within 20% of its all-time high set about a month ago. Like many of the fastest growing tokens on the market, Avalanche has entered bear market territory as investors appear to be in risk reduction mode. However, today’s macroeconomic news appears to have investors in risk mode once again.
For tokens like Avalanche with incredible momentum built on some strong catalysts, today certainly looks like a perfect storm. Any token that is put in the same discussion as Ethereum is worth considering.
Much of the attention Avalanche has received lately is due to accelerated blockchain adoption by developers and users, particularly in the decentralized finance (DeFi) space, as well as non-fungible token (NFT) and gaming segments. . One of the key metrics investors are looking at regarding growth in the DeFi world is Total Locked Value (TVL) – Avalanche is reported to have outperformed other scale platforms such as Solarium Y Polygon in terms of TVL. Currently, the total value locked on the Avalanche network hovers around $ 12 billion, which is fast approaching 10% of the roughly $ 150 billion in TVL found on the Ethereum network.
Given Avalanche’s relatively low fees and fast transaction speeds, experts have singled out Avalanche as a network with great growth potential relative to the field. Looking at the numbers behind this analysis, this thesis certainly seems to have legs.
Of course, Ethereum is fighting other high-profile “Ethereum killers” for market share in the growing world of DeFi. Choosing a specific token that will ultimately be a DeFi market share leader is not as easy as you might think. Avalanche is certainly highly scalable and has impressive metrics right now. However, the slowdown in other high-speed, low-cost networks (such as Solana) could herald a not-so-linear growth path for Avalanche in the medium term.
With that said, it is clear that expectations are starting to build for Avalanche as a true competitor to Ethereum. Now that Avalanche is a top 10 token by market cap, Avalanche is also likely to get more attention in the future.
It will certainly be intriguing to see where this token goes from here. This is a token that I have on my watch list right now.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are variegated! Questioning an investment thesis, even one of our own, helps all of us think critically about investing and make decisions that help us be smarter, happier, and wealthier.