Decided you want in on the action? You can buy Avalanche (AVAX) on Coinbase.
Avalanche (AVAX) is a smart contract platform that deserves to be on everyone’s radar — not only because of its incredible performance over the last year but also because of its future potential within the decentralized finance industry.
Over the past year, the price of Avalanche and the platform have experienced incredible growth. Even though AVAX has seen incredible growth already, there may still be room for the cryptocurrency to grow in the coming months to years.
From a low of $2.80 in December, the price of Avalanche increased by more than 4,000%, hitting an all-time high of around $140 in November 2021. Ultimately, how high can AVAX go? Only time will tell.
What is Avalanche?
Avalanche was launched in 2020 by Ava labs and is a competitor to Ethereum and other smart contract platforms. Avalanche is a platform on which any developer can build custom blockchain networks and decentralized applications (dApps). Avalanche is compatible with the Ethereum Virtual Machine (EVM), making it easy to onboard crypto from Ethereum to Avalanche. This may prove critical to the blockchain's adoption –– users can even add the Avalanche network to their existing Metamask cryptocurrency wallet and get started within minutes.
Avalanche’s core is a subnetwork (subnet) called the primary network. The primary network contains 3 blockchains, an exchange chain (X- chain), a platform chain (P-chain), and a contract chain (C-chain). The exchange chain is for creating and trading crypto assets. The platform chain allows for the creation of new blockchains and new subnets. It also tracks active subnets and coordinates transaction validators.
Ultimately the Avalanche network will consist of thousands of subnets forming an interoperable network containing many blockchains. The subnets have the choice of having staking rewards paid in AVAX, a stablecoin, or they could have a token of their own.
Avalanche uses a proof-of-stake consensus algorithm that requires anyone interested in becoming a validator to stake 2,000 AVAX to participate in consensus. A consensus mechanism’s purpose is to achieve agreement, trust, and security across the network.
AVAX is the native token for the Avalanche network and acts as a reward and payment system for customers. The AVAX token has a current circulating supply of 220,286,577, and a maximum supply capped at 720 million.
Non-fungible tokens (NFTs) are also fully supported with plans to build a registry to make an entire universe of NFTs available on Avalanche.
Avalanche Market Capitalization
At the time of writing, Avalanche is ranked No. 10 on CoinMarketCap. Its price has increased dramatically in November 2021, and it's currently trading around $130 with a market capitalization of $30 billion. When looking at the market cap alone, it appears Avalanche may have a lot of room to grow from here. Compared to the market cap of Ethereum at around $500 billion, the market cap of Avalanche is less than 10% of the size.
Avalanche’s main competitors are Ethereum (ETH), Solana (SOL), Cardano (ADA) and Polkadot (DOT).
Although, when you compare speed, latency, and transaction costs, Avalanche has a considerable edge over the competition. Avalanche has a very high throughput of 4,500 transactions per second (TPS) per subnet and very low latency. Almost all transactions reach finality within 1 second of being submitted to the network. All of this with meager transaction costs make Avalanche a desirable platform.
When judging whether a coin or token has substantial upside potential, you need to consider more than just the price. If you see a coin trading at $0.10 and another trading at $10, don’t automatically assume the $0.10 coin is a better value. The lower-priced coin could have a substantially larger circulating supply.
$0.10 x 500 billion = $50 billion market cap
$10 x 100 million = $1 billion market cap
That would mean that the $0.10 coin has a market cap 50 times larger than the $10 coin. So in this example, you can see how you just can’t look at the price of a coin or token to determine a token's valuation.
Bull Case for Avalanche
Since 2017 Walletinvestor.com has been filling the demand for quality, free-of-charge technical forecasts for cryptocurrencies. Recognizing how time-consuming the task would be because of the size of the cryptocurrency market, it created an AI-based solution to generate predictions.
Walletinvestor rates AVAX as an outstanding long-term (1-year) investment. As a 5-year investment, it expects a return of 229.85%. According to Walletinvestor, a $100 buy now could be worth $329.85 in 2026.
Avalanche Forecast, Long-Term Price Predictions for Next Months and Year: 2021, 2022
Bear Case for Avalanche
Founded in 2000, FXStreet is a leading independent portal dedicated to the foreign exchange market. FXStreet has always been proud of providing neutral and unbiased forecasts that allow users to make more informed decisions.
© Image credit: FXStreet
After an extreme bullish period, AVAX has formed a rising wedge pattern, signaling a deep corrective move ahead. Just recently, AVAX has broken down below that significant bearish pattern. Bullish traders were hoping that the news of a Coinbase listing would push AVAX back up into the wedge and kill off any bearish momentum. But so far, the lower trendline is holding as resistance.
Coinbase listings have almost always resulted in pump and dump behavior. With minimal price reaction, early investors will now be looking to take profits. Short sellers will target the $54 support zone near the Fibonacci 38.2% retracement level.
Where to Buy Avalanche
Suppose you feel the bull case is compelling enough to warrant investing in AVAX. In that case, you can buy it at the following exchanges: Crypto.com and Houbi Global both offer the ability to stake your crypto so that you can earn interest.
Coinbase is an excellent exchange for investors who are just starting their crypto journey. It has a more basic platform that is easier for 1st-time users to navigate. Coinbase offers a feature where you can earn crypto while you learn about cryptocurrencies. You can also buy AVAX on Coinbase Pro, which has a more advanced trading platform.
Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
Can AVAX Hit $1,000?
Price predictions from popular forecast platforms vary widely on when the price of AVAX will hit $200 or more, but $1,000 may be a lofty goal. Most seem to think that AVAX will still perform well through the end of 2021 and into 2022.
To be clear, trying to predict when an asset will hit a specific price is very speculative. Many factors can impact the price, from possible issues with Avalanche itself to overall market conditions and even black swan events.
Bitcoin has certainly done well over the past year, and many investors are calling for a 6-figure bitcoin in 2022. What Bitcoin does from here will dictate where the overall crypto market goes, which will significantly impact the price of AVAX.
Looking at the past price history of AVAX, you can see 2 times this year that the price surged significantly. From Jan. 1 to Feb. 12, the price surged from a low of $2.83 up to a high of $60.28. Then from July 12 to Sept. 23, the price increased from a low of $9.48 to a high of $79.51 — a new all-time high at the time. Again in October, Avalanche began a run up from about $56 to new all-time highs around $140. If history is any indication, AVAX certainly has the potential to make significant jumps in price rather quickly.
If AVAX were to reach $1,000, its market capitalization would be $225 billion. While this would make Avalanche the 3rd largest cryptocurrency by market cap today, other projects will likely grow alongside it. If Avalanche can outpace the general market for the rest of the bull run, there's certainly a possibility that AVAX could hit 4 figures in 2022 or beyond.
Where to Store Avalanche Safely
Quite a few factors can influence which type of wallet is best for you. If you are a long-term investor who doesn’t need to move your crypto assets very often, if at all, then a hardware wallet would be the best choice. If, instead, you are a trader or investor who does move crypto around more frequently, then a software wallet might be the best choice.
A software wallet is an application that you install on your computer or smartphone, or it can be web-based. Software wallets are safer than leaving your crypto on an exchange because exchanges are bigger targets for hackers. With a software wallet, your private keys reside on that particular device, presenting risks such as losing crypto from a hack.
A hardware wallet is a device that, by design, makes storing your crypto assets more secure. When needed, a cable connects the wallet to your computer’s USB port. When done, the hardware device can be unplugged and isolated from the internet, making it much more secure. Also, your private keys reside on the hardware device and not on your computer.
Best Hardware Wallet: Ledger
© Image credit: Avalanche
- ERC-20 tokens
When considering cost, ease of use, and security, the Ledger hardware wallet is the best on the market. Founded in 2014, Ledger is the leader in security solutions for digital assets. Ledger has a team of more than 150 developers working on various products and services for individuals and businesses.
When the private keys reside on the Ledger, the user must have physical access to the device to complete transactions. That adds a critical security feature. Even if a hacker successfully gained access to your digital properties, they would still physically need the device to complete a transaction.
Best Software Wallet: Avalanche Wallet
The best software wallet for AVAX is a wallet created by Ava Labs. It is a web-based software wallet with many valuable features. The layout is user-friendly, with all of your menu items listed down the left side.
You can stake your AVAX to earn interest on your holdings, and you can create NFTs with this wallet. The studio menu item lets you create and organize your NFTs.
Bonus Section
Barring a black swan event, keep an eye on Bitcoin. How Bitcoin performs moving forward will have the most significant impact on the price of AVAX.
Current Crypto Prices
Unlike the stock market, cryptocurrencies trade 24 hours a day, 7 days a week. It's a good idea to use a portfolio tracker if you're planning on trading crypto frequently for this reason. The cryptocurrency market as a whole sits around $2.5 trillion as of November 2021, up over 100% over the year. To see the most up to date cryptocurrency prices, check out our cryptocurrencies table below.
Is Avalanche a Good Investment?
With its speed, low latency, and scalability, Avalanche has the potential to be one of the top smart contract platforms. If you have patience and a longer investment horizon, Avalanche could make an excellent investment. Every investment carries a certain amount of risk, and it is up to you to do the necessary due diligence to determine whether this investment fits your risk profile.
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About Donald Hancock
Donald’s expertise lies in the technical analysis of both stocks and crypto.