Avalanche came to the map of the most popular cryptocurrencies in the fourth quarter of 2021 and caused a huge hype due to its speed and scalability. How has the situation in the bear market changed now? Is Avalanche 2022 still a cryptocurrency you should keep an eye on?
In this article we describe the current situation around the crypto currency Avalanche in 2022 and tell you whether an investment in the AVAX token from Avalanche is still worthwhile at the moment.
What is Avalanche?
Avalanche is a cryptocurrency that has been on the market since 2020. It uses the modern proof-of-stake consensus mechanism and also offers smart contract functions. The native token of the Avalanche network is the AVAX token. He is responsible for the transactions and communication in the network.
The special thing about Avalanche is that it consists of 3 different chains:
- the X-Chain: the chain for creating and transacting digital assets
- C-Chain: the chain for smart contracts
- P-Chain: the chain for staking and validating the AVAX tokens
Due to the combination of 3 different chains, the Avalanche network offers a very high efficiency and scalability. This makes Avalanche very attractive for decentralized applications and areas such as NFTs and DeFi.
How has the AVAX price moved in recent months?
The price of the AVAX token experienced an extreme increase in the fourth quarter of 2021. Because the Avalanche project developed a strong hype due to the high scalability of the project. This was done in the slipstream of the Solana blockchain, which is also extremely fast and scalable.
The all-time high of over 134 US dollars was reached by the AVAX token late in November 2021. Furthermore, Avalanche saw another peak at the end of December. Thus, AVAX experienced a later peak than most other cryptocurrencies. But the bear market didn’t stop at Avalanche either.
In January, we saw massive losses, and the AVAX went below the $ 60 mark. After that, the course was able to recover a little. In April and especially in May we saw massive losses in the AVAX price. Ultimately, the price ended up at about $ 20.
What is so special about cryptocurrency?
We have already described the structure of the blockchain. Thanks to the 3 different chains, Avalanche can validate transactions and execute smart contracts extremely quickly and efficiently. This makes Avalanche’s scalability higher than many other blockchains, including Ethereum.
Avalanche was considered one of the so-called “Ethereum Killer”. These are cryptocurrencies that have the opportunity to become dangerous due to more efficient and faster transactions and smart contracts Ethereum is at the forefront of smart contract platforms. Other important representatives are Cardano and Solana.
Is Avalanche still on the right track?
Despite the massive losses of the AVAX, the Avalanche cryptocurrency is well on its way to establishing itself among the most popular cryptocurrencies on the market. True, the AVAX could not keep itself in the top 10 most popular cryptocurrencies by market capitalization. But the AVAX is still in 15th place on Coinmarketcap.
The network itself continues to grow. Most recently in June, Avalanche was able to report that the number of transactions on the network is the same as with Ethereum. As a sole fact, this is a very good sign that Avalanche is growing and can establish itself as an alternative to Ethereum.
Furthermore, Avalanche is in the slipstream of Solana. Solana continues to offer the fastest transactions and the highest scalability. Furthermore, the competition Cardano, the unofficially first “Ethereum killer”, is constantly evolving. Due to this competition, Avalanche has a difficult way to establish itself at the top.
Can Ethereum 2.0 be dangerous to development?
The great popularity of cryptocurrencies such as Cardano, Solana and Avalanche is due to the fact that the market leader Ethereum has been struggling with problems in the area of transaction costs, speeds and security for years. Over the years, the aforementioned more efficient networks have emerged.
In the third quarter of 2022, the Ethereum 2.0 update should go online. It involves switching Ethereum’s consensus mechanism from proof-of-work and proof-of-stake. This should effectively solve Ethereum’s problems, high transaction costs and low speeds.
Avalanche must therefore continue to develop effectively in order to remain relevant in the market. Nevertheless, the experience of Cardano and most recently Solana shows that these projects can also survive in a bear market if technical progress continues continuously. With its combination of 3 chains, the blockchain also offers a unique selling proposition, which makes the blockchain attractive.
Another advantage of Avalanche is its good safety standards. Thus, the blockchain is very resistant to DDOS attacks. This could be a weakness of Solana. The topic we have covered in this article.
Should I invest in Avalanche now?
If you believe in the long-term success of Avalanche, the current bear market offers you an excellent opportunity to invest in the cheap AVAX token. Because the chance that the value of the AVAX will rise massively again in the next bull market is very high if Avalanche continues to develop further.
However, you should not bet on quick profits. The bear market may continue for several more months. Therefore, you should think long-term about your investment and not overreact if we see falling prices again in the next few weeks. For long-term investors, however, the low prices are worthwhile.
You can join the cheap AVAX also purchase on the crypto exchanges Coinbase and Kraken.
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