How to Use This Price Tracker
Cryptocurrency pricing data can help investors find opportunities in the market and make more informed investment decisions. NextAdvisor’s price tracker shows historical price, trading volume, market capitalization, and other important metrics for investors, especially those who are just starting to dip their toes into crypto investing.
While everyday investors probably don’t need every last bell and whistle to make informed investment decisions, there are some generally applicable key crypto metrics and indicators worth considering:
Crypto Indicators and Metrics for Beginner Investors
Price: As with any investment, price is where it starts and ends for investors. Pricing is highly volatile in cryptocurrency, but viewed over time can give investors an idea of how a given coin’s value has gone up (or down) over time.
Market Capitalization: In general, the higher the value of the market cap the safer the investment. Market cap is the total value of a cryptocurrency, and is calculated by multiplying the price of the cryptocurrency with the number of coins in circulation. The amount of tokens or coins circulating can be viewed as an indicator of a coin’s demand.
Volume: Higher volume typically means a given cryptocurrency has more market liquidity, meaning more ability for investors to sell an investment when they want to realize a profit. It represents how much crypto is bought and sold over a period of time, typically 24 hours.
Ethereum may be king when it comes to smart contracts, but a handful of rivals have emerged in the last few years. One of them is avalanche.
Avalanche belongs to a class of cryptocurrencies sometimes referred to as “ethereum killers” because it does a lot of the same things that ethereum can do but faster, cheaper, and more efficiently.
Launched in 2020 by Emin Gun Sirer, Kevin Sekniqi, and Maofan “Ted” Yin, it has quickly become one of the largest blockchains in the crypto industry. Avalanche’s native token, AVAX, has a market cap ranging from nearly $5 billion to $10 billion, which places it in the top 20 for cryptocurrencies.
“It’s faster, cheaper, and better in some ways than ethereum,” says Georgiy Roykhman, a crypto expert and founder of the financial education channel Funancialism. “It also has the least amount of problems, although the platform tends to miss its development deadlines. While avalanche is at the top of its game, it’s impossible to know who will come out on top.”
How Does Avalanche Work?
The avalanche blockchain stands out from other blockchains because there are three chains built into its main network, each designed for a different purpose. By splitting its architecture across three separate blockchains, avalanche claims it can optimize for flexibility, speed, and security without any trade-offs. The three chains stand for exchange, platform, and contract:
- X-Chain: The exchange chain is used to send and receive funds and trade digital assets, such as NFTs. Any asset on the exchange can come with rules that govern the transaction.
- P-Chain: The platform chain is primarily used for staking AVAX and serving as a validator. Staking is refers to the process of “locking” up your digital tokens for a certain period of time to contribute to the network’s performance — and you can earn interest or rewards as a result. If you’re a validator, or someone who is responsible for verifying transactions on a blockchain, then you will receive AVAX rewards on this chain.
- C-Chain: If you want to use the avalanche network for DeFi, then the C-Chain is the one you want. The contract chain is used for smart contracts, and is essentially a replica of the ethereum smart contract function.
The platform is centered on its native utility token. Users on the blockchain need AVAX to pay network fees, similar to how ether (ETH) is used to pay for gas fees on ethereum, as well as staking. To verify transactions, avalanche uses a proof-of-stake (PoS) system, which allows owners of AVAX to stake coins and create their own validator nodes to help grow and maintain the network.
What Gives Avalanche Its Value?
While avalanche derives a lot of value from the hype surrounding it as an “ethereum killer,” it isn’t the only thing avalanche has going for it.
The blockchain bills itself as “blazingly fast, low-cost, and eco-friendly” — and aims to to be the solution to many of ethereum’s scalability problems. According to Ava Labs, the company that oversees the blockchain’s development, avalanche can process 4,500 transactions per second, whereas ethereum can only process 14 transactions per second. It also consumes less energy, the equivalent energy of just 46 U.S. households annually as compared with 1.6 million U.S. households for ethereum, according to research by the Crypto Carbon Ratings Institute.
Avalanche’s earliest adopters hailed from the world of decentralized finance and gaming, but Ava Labs says it wants to become a platform for institutions, enterprises, and governments as well. Last year, consulting firm Deloitte partnered with Ava Labs to create an avalanche-powered platform that helps “security, speed and accuracy” of Federal Emergency Management Agency (FEMA) funding.
“It’s basically a race to see which system is rolled out faster and with fewer bugs. Look at how many developers are using the platform,” says Omar Qureshi, managing partner at High Tower Wealth Advisors. “Are developers building out on avalanche? If they are, it will generate user activity and transactions and accompanying fees, leading to long-term viability.”
How to Buy Avalanche
Avalanche is a popular altcoin that’s available to purchase on several major cryptocurrency exchanges, such as Coinbase, Kraken, and Gemini. You’ll need to pick a crypto trading platform that sells avalanche and create an account to exchange your U.S. dollars (or other currency) for digital assets. When choosing a cryptocurrency exchange, it’s important to consider security, accessibility, and fees.
For example, while Coinbase has heftier fees compared to other exchanges, it also has theft and crime insurance to protect its users from hacks and security breaches. Don’t necessarily let a high fee structure turn you off an exchange if it means its easier to access and has stronger security.
Just keep in mind that altcoins like avalanche are often even riskier gambles on top of already highly speculative, more established cryptocurrencies. That’s why experts recommend limiting your exposure and only investing what you’d be comfortable losing. Many experts suggest investing no more than 5% of your portfolio in crypto. Before investing in crypto, prioritize having a well-stocked emergency fund, paying off any high-interest debt, and contributing to a tax-advantaged retirement account.
Avalanche Price History
Avalanche launched in September 2020 at a price of $4.11 and doubled in price within six months. By the start of 2021, the year that cryptocurrencies exploded in popularity, AVAX was worth around $12. As avalanche began gaining traction as an “ethereum killer,” the price steadily climbed throughout 2021.
Part of the reason that AVAX experienced a rapid price increase was the announcement of a special mining program in August 2021. In order to boost the development of decentralized finance (DeFi) apps on avalanche, Ava Labs announced that extra AVAX tokens would be given to those who used DeFi — on top of regular interest payments. As a result, two DeFi lenders — Aave and Curve — launched protocols on avalanche. This announcement resulted in AVAX going from $13 to $55 within a month, and it continued to see an increase in price through November when it reached an all-time high of nearly $145.
Like other cryptocurrencies, avalanche has not been immune to the impacts of a bearish market, dropping 84% since the start of 2022. The price of Avalanche has ranged from $15 to $25 in recent weeks.
Avalanche vs. Ethereum
Avalanche and ethereum compete against each other, which also means they’re similar in many ways. They’re both blockchain projects that enable smart contracts and allows developers to create immersive and unique decentralized apps, plus they’re both well-established in the market.
Still, they have their differences.
Ethereum operates using a proof-of-work (PoW) approach to verifying transactions. In this schema, computers race to solve complex puzzles for the right to validate transactions and receive a reward in return. In general, proof-of-work is a less efficient method of verifying transactions, which is part of the reason avalanche is so much faster. Additionally, having three separate blockchains with dedicated purposes so that everything isn’t running on one blockchain is another way that avalanche differentiates itself from ethereum.
Though avalanche is faster and more efficient, Qureshi points out ethereum still dwarfs avalanche in terms of developers, usage and interest. Ultimately, ethereum still has more DeFi applications built on it, making it arguably the most important blockchain in the market.
“That number of developers and usage is still one of the biggest indicators that ethereum remains one of the blue chips of the crypto space and avalanche is still just a promising alternative,” Qureshi says. “But there’s still the option. After all, many of the big guys we see today didn’t even exist during the early tech battles of the 1990s.”
One of the difficulties Roykhman says he sees with avalanche and other altcoins that market themselves as “ethereum killers” is the fact that ethereum is planning a massive upgrade that will improve its scalability and functionality. After several delays over the years, ethereum co-founder Vitalik Buterin recently announced at a conference that ethereum’s transition from proof-of-work to proof-of-stake could happen as soon as August. Once ethereum upgrades, it will likely see an influx of developers flocking back to it, experts say.
“One thing that makes me bearish on these altcoins is the fact that ethereum will be upgrading later, moving to proof-of-stake and allowing for the creation of shard chains that will function similarly to avalanche’s side chains,” Roykhman says.
Frequently Asked Questions
How much is the avalanche coin worth?
Crypto prices have wide swings and change drastically day-by-day. AVAX has ranged between $15 and $25 recently, but it’s been trending downward, along with many other cryptocurrencies, since the start of the year.
Is avalanche a good investment?
Take a hard look at your financial goals and portfolio strategy before investing in any crypto, including avalanche. AVAX could be a good investment if you think that it solves a problem and has the potential to take some market share in blockchains that provide DeFi apps and gaming protocols. However, it’s important to note that all cryptocurrencies are risky, speculative, and highly volatile. That’s why you should never invest more than you’re OK with losing.
Does avalanche have a future?
Because avalanche is faster and cheaper than ethereum, some experts believe that avalanche has a potential future if it can build out its Web3 infrastructure and solve some of its underlying problems. However, ethereum continues to lead the pack and experts suggest limiting your exposure to AVAX as it is overall a risky, highly speculative investment.
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