Summary Despite a rough 2022, Avalanche has shown good user growth. The company has also made many strategic partnerships. AVAX could reach a price of over $200 in the next bull run. Overview Avalanche (AVAX-USD), developed and launched by Ava Labs in 2018, is an EVM-compatible layer-1 blockchain that aims to digitize all the world's assets. Avalanche's native token AVAX has been a top 50 coin on CoinMarketCap and is on the watchlist of hundreds of thousands of people. Despite reaching an all-time high price of $146.22 in the 2021 crypto bull run, the price of AVAX declined due to the months-long bear market in 2022. Despite the bear market and the subsequent correction of prices of crypto tokens, the implosions, hacks, and overall turbulent moments experienced in the crypto space in 2022, Avalanche weathered the storm and had a surge in its network usage. Growth and Ecosystem Blockchain analytics platform Nansen released an Avalanche-focused report for the fourth quarter of 2022, shared with CoinDesk. According to CoinDesk, the Nansen report reveal that transactions on the avalanche blockchain grew by 1,500% in 2022. The transaction count includes non-fungible trading (NFT) trading volume on the Avalanche blockchain. However, Avalanche's DeFi protocols have experienced a decline in the total number of locked tokens. Avalanche is popular for its ability to create and execute EVM-compatible smart contracts, low transaction fees, and fast throughput - one-second transaction finality. The core elements blockchain users seek are speed, fast throughput, and low fees - for which Avalanche is popular. Despite crypto winter, a spike in the number of transactions shows that the Avalanche is a practical blockchain. Avalanche's ecosystem has grown organically since its creation. Several quality blockchain projects have deployed application-specific blockchains, known as subnets, on Avalanche. Blockchain projects can launch subnetworks (subnets) on Avalanche; these subnets have their own set of validator nodes, choose any token as their native token, set their gas prices, and set specific rules on the subnetwork. Subnets in the Avalanche ecosystem work together to validate the main Avalanche blockchain. In April 2022, prominent GameFi project Defi Kingdoms (DFK) introduced Crystalvale Realm, deployed as an Avalanche subnet. On November 13, 2022, the DFK subnet reached 200 million transactions. The surge in transactions on subnets, like Crystalvale, deployed on Avalanche has contributed significantly to the increase in transaction volume on the Avalanche blockchain. NFTs on Avalanche also gained traction in recent times. In October 2022, the world's leading NFT marketplace OpenSea launched support for Avalanche NFTs. The exposure and increased trading volume that NFTs minted on Avalanche gained by OpenSea's integration also contributed to the Avalanche's transaction upsurge. Home of Digital Securities Avalanche has stated that its goal is to tokenize the world's assets. One of the digital asset classes that have gained rising popularity is digital securities or securities tokens. These tokens are digitized investment contracts representing real-world assets such as stocks, bonds, real estate, or commodities. Digital securities run on blockchain technology, and Avalanche has become one of the go-to networks for issuing security tokens. Leading security tokens issuing platform Securitize was the first security token platform to integrate with Avalanche. Securitize announced its integration with Avalanche in December 2020. Securitize called the integration a time- and cost-saving upgrade for blockchain-based financial services offerings. The Avalanche integration has enabled issuers utilizing the Securitize platform to issue and manage private securities cost-efficiently using the Avalanche blockchain. Since integrating Avalanche, Securitize has tokenized KKR's Health Care Strategic Growth Fund II, a $4 billion healthcare-focused fund, on the Avalanche blockchain, among other real-world asset tokenization efforts. In December 2022, regulated digital securities and cryptocurrency trading platform INX announced that it would fully integrate its platform with Avalanche to expand its infrastructure for security token issuers. Another digital securities firm that plans to have an Avalanche integration is DEFYCA. The firm announced a soon-to-launch cross-chain liquidity aggregator utilizing Avalanche as its treasury chain. DEFYCA chose Avalanche because of the network's unique fusion of multichain technology. Recent Partnerships Ava Labs is one of the few blockchain companies that attract meaningful partnerships in the blockchain industry due to the quality of its blockchain network. Recently, Tencent Cloud, a Chinese cloud computing service and creators of WeChat, formed a strategic partnership with Ava Labs. The partnership will provide technical support to developers and projects building on the Avalanche blockchain. Developers and projects in the Avalanche ecosystem can deploy nodes rapidly on Tencent's cloud infrastructure. Developers on Tencent also have access to Avalanche blockchain development tools like rapid node deployment. Another note-worthy partnership secured by Avalanche in 2023 is its Amazon Web Services (AWS) partnership. According to Avalanche, the partnership aims to ease the processes of node deployment and subnet creation. Developers and enterprises would have access to one-click tools to deploy nodes and subnets. The Avalanche-AWS partnership has been scrutinized and criticized by a faction of crypto Twitter , calling it "a service agreement presented as a partnership." The official Twitter handle of Avalanche tweeted the announcement; however, AWS' tweet did not explicitly mention a partnership. Technical Analysis If we look at the long-term chart, my view is that AVAX could reach at least $274 in the next bull run. AVAX TA (Author's work) This target is reached by measuring the length of the wave 1 from the bottom of wave 2. This is done using the arithmetic chart, since the logarithmic chart yields too bullish a target for my liking. AVAX TA (Author's work) Looking at the recent rally off the lows, I think we should head a bit lower in wave 2, perhaps towards the $15 region. If this is done and we can rally impulsively over the recent high at $22, then I will assume a low is already in, which isn't completely certain yet. Takeaway The digital securities market is projected to reach $162 trillion in trading volume by 2030. Asset tokenization is gaining traction, traditional investors are exploring and adopting digital securities quickly, and firms are adopting the issuance of security tokens for crowdfunding. Blockchain projects like Avalanche that focus on the tokenization of assets are the pillars of the digital securities sector. As the digital securities sector grows, these blockchains will experience massive userbase and value growth.
