Patrick is an accounting & economics graduate, a Cryptocurrency enthusiast, and a Blockchain technology fanatic. When not crafting informative pieces on any of the above subjects, he will be researching on how the Blockchain technology can transform the world, particularly the financial space.
One of the major reasons for the momentum growth of AVAX is the continual assets migration from other networks such as Ethereum to Avalanche.
On Thursday, September 16, Avalanche, AVAX, was trading at its all-time high (ATH) at a price of $68.89. This is largely as a result of $230M investment in the Blockchain. The project has grown to become one of the greatest challengers of Ethereum (ETH) which has historically been dominating the smart contract platforms. As per the project’s website, this layer-1 protocol has the capability of achieving over 4,500 transactions each second with a time finality of below 2 seconds.
Data gathered from TradingView and Cointelegraph Markets Pro indicate that since September 7, when AVAX was trading at a low of $32.10, there was a turnaround that saw the price of AVAX rallying by 111% and reaching an ATH high. The 24-hour trading volume by 200% to reach $2.8 billion.
Reasons for the Surge that Leads to New AVAX ATH
There are a couple of reasons attributed to the price Surge of AVAX. One reason is the recent funding round to a tune of $230 million facilitated by major capital funds. The second reason is the migration of liquidity to the Avalanche network, and finally, the new upgrades and integrations meant to enhance user experience in the protocol.
The momentum surge experienced on September 16 was propelled by an announcement suggesting that a couple of big funds were involved in the $230 million funding round. Some of the large funds included Dragonfly Capital, PolyChain, and Three Arrow Capital. This is the biggest investment into the Avalanche ecosystem to date. This indicates that major institutional investors have begun taking a keen interest in Avalanche, a major Ethereum network.
The network, Avalanche, has cross-chain compatibility with the ethereum network, which means that tokens or any projects that can be operated on Ethereum are compatible with the Avalanche ecosystem. Additionally, the Avalanche ecosystem has the extra advantage of a higher throughput capability in addition to the low transaction fees. With the uncertainties surrounding Eth2.0, particularly in regards to when it will be fully operational and its ultimate capabilities, competitor networks like Avalanche have an opportunity to showcase why they are perfect alternatives if not better choices. This could result in the growth of their market share.
Liquidity Migration and Growing TVL
Another major reason for the momentum growth of AVAX is the continual assets migration from other networks such as Ethereum to Avalanche. This allows it to grow into a decentralized financial ecosystem.
The asset migration evidence is shown by the total value locked (TVL) data courtesy of Defi Llama. The data indicate that Avalanche’s total value locked (TVL) has steadily grown since Aug. 19 to attain an ATH of $2.17 billion on Sept. 16.