CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

AVAX price prediction: Is Avalanche one to watch?

By Peter Henn and Mensholong Lepcha

Edited by Martyn Cornell


Updated

The AVAX logo
What next for Avalanche? – Photo: WindAwake/Shutterstock.com

It aims to help the self-proclaimed "world's fastest blockchain network", but what is avalanche (AVAX)?  Let's see what we can find out, and also take a look at some of the avalanche price predictions that were being made as of 3 April 2023. 

Avalanche explained

In the blockchain world, the ability to keep up with higher traffic, known as scalibility, and overall speed are among the main technical hurdles for decentralised finance (DeFi) projects seeking to go mainstream. Platforms such as Avalanche and Solana (SOL), which use smart contracts, computer programs which automatically execute once certain conditions have been met, have offer users lower gas fees and faster transactions than some potential rivals.

Avalanche claims to be the fastest smart-contract platform in the blockchain industry “as measured by time-to-finality”. According to Avalanche, time-to-finality is the time a user has to wait to receive confirmation that a transaction made on the blockchain will not be changed or cancelled. 

Let’s look at Avalanche’s core features and how it differs from other smart-contract platforms.

Avalanche aims to achieve a high-transaction throughput and scalability via its native Snow protocol, which combines the properties of a classical consensus protocol and Nakamoto consensus.  

Avalanche’s whitepaper says the classical consensus protocol offers low delays and high throughput but has problems with scalability because of its reliance on “all-to-all communication” to reach consensus. The whitepaper claims that the consensus mechanism used by proof-of-work (PoW) networks such as Bitcoin (BTC) suffers from delays, low throughput and constant energy requirements.

Under the Avalanche Snow protocol, each computer, or node, on the network polls a small, constant-sized, randomly chosen set of neighbouring nodes to achieve consensus, instead of the “all-to-all communication” seen in classical consensus protocols.

Avalanche said: “To choose among the conflicting transactions and prevent the double-spend, every node randomly selects a small subset of nodes and queries which of the conflicting transactions the queried nodes think is the valid one. If the querying node receives a super-majority response in favour of one transaction, then the node changes its own response to that transaction. Every node in the network repeats this procedure until the entire network comes to consensus on one of the conflicting transactions.”

The use of subnetworks, or subnets, on Avalanche helps to reduce network traffic and facilitate customisability on its network. Avalanche says a subnet is a dynamic set of validators working together to achieve consensus on the state of a set of blockchains. 

Validators, also referred to as ‘stakers’ on proof-of-stake (PoS) networks such as Avalanche, can be members of multiple subnets. Each blockchain built on Avalanche is validated by one subnet, and each subnet can validate many blockchains.

Avalanche said that its subnet model reduces network traffic by allowing validators to choose which subnet to join in order to validate a blockchain. Subnets can also be designed to be private subnets by deciding which validators can enter them.

The Avalanche network has a “default subnet” which is validated by all validators. The default subnet, also known as the ‘primary network’, validates a set of three predefined blockchains on Avalanche: Exchange Chain (X-Chain), which is used to create and trade digital assets, Platform Chain (P-Chain), which helps with the creation of new subnets and keeps track of active ones, alongside coordinating validators, and Contract Chain (C-Chain), which is used to create smart contracts. 

Ashu Pareek, a research specialist at the blockchain analytics firm Messari, said in a report: “Today, the vast majority of Avalanche applications are deployed on the Contract Chain, Avalanche’s EVM-compatibility smart-contract platform. However, while Avalanche’s consensus brings speed and low fees, it doesn’t provide a long-term solution for scalability. To accomplish this, Avalanche enables projects to create custom blockchain networks (subnets) using the Platform Chain.” 

AVAX is the native coin on the Avalanche platform. It is used for staking and paying transaction fees on the network. People who hoold the coin also have the right to vote on proposed changes to the network.

AVAX is also required to create or join a subnet. Avalanche requires a validator to stake a minimum of 2,000 AVAX. Delegators who want to participate in staking can choose to stake with an existing validator by committing a minimum of 25 AVAX. 

ETH/USD

3,115.48 Price
+0.990% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

BTC/USD

67,060.25 Price
+0.220% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

DOGE/USD

0.15 Price
-0.450% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

XRP/USD

0.53 Price
-0.340% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

According to its whitepaper, the AVAX coin has a capped supply of 720 million coins. All processing fees on Avalanche are burned to increase the scarcity of AVAX. Avalanche has said that while AVAX is capped, the rate at which the coin reaches its maximum capacity is subject to governance.

It said: 

“The nominal reward rate (for staking) is subject to governance, within pre-established boundaries. This will allow token holders to choose on whether $AVAX is eventually capped, uncapped, or even deflationary.”

Avalanche price history

Let's now take a quick look at the AVAX price history. While past performance should never be taken as an indicator of future results, knowing what the coin has done can give us some much needed context when it comes to either making or interpreting an avalanche price prediction. 

AVAX first came onto the open market in September 2020, when it was worth about $5. In early 2021, the coin's price rallied and it peaked above $50 in February of that year. It then settled to hover around the $30 mark, before dropping down over the summer of the year and then recovering over the course of the autumn to reach an all-time high of $146.22 on 21 November 2021. Following that, the price dipped and it closed the year at $109.27.

While 2021 was a really strong year for AVAX, 2022 was one that it, along with much of the rest of the crypto market, would probably rather forget. It performed inconsistently over the course of the first four months or so, with a high of $103.53 on 2 April a notable highlight, but then a series of market crashes saw it fall to a low of $13.79 on 19 June. Following that, there was a recovery and as late as 5 November it was trading above $20, before the collapse of the FTX (FTT) exchange led to it dropping to a low of $10.65 on 30 December before it closed the year at $10.90, an annual loss of more than 90%.

The New Year saw some recovery, with a resurgent market leading it a peak of $22.71, its highest price since November. After that, though, it slipped, with the collapse oif the Silvergate bank seeing it fall to a low of $13.94 on 10 March. The coin was then able to recover and on 3 April 2023, it was worth about $17.30. 

At that time, there were a little under 32.6 million AVAX in circulation out of a total supply of 422,018,587. This gave it a market cap of around $5.6bn, making it the 16th largest crypto by that metric. 

Avalanche price prediction round-up

With that all over and done with, let’s take a look at some of the avalanche price predictions that were being made as of 3 April 2023. It is important to remember at this stage that price forecasts, especially when it comes to something as potentially volatile as cryptocurrency, very often turn out to be wrong. Also, you should keep in mind that a lot of long-term crypto price predictions are made using an algorithm, which means that they can change at a moment's notice. 

CoinCodex had a rather mixed short-term avalanche price prediction for 2023, saying the coin could drop to $16.14 by 8 April before recovering to $17.62 by 4 May. The site's technical analysis was bearish, with 15 indicators sending downbeat signals and 13 making bullish ones. 

For the longer term, the algorithm-based website WalletInvestor’s AVAX price prediction suggested the coin was due for a tough 12 months, falling to just $6.14 in a year's time.

DigitalCoinPrice was more bullish in its long-term AVAX crypto price prediction. According to its AVAX price prediction for 2025, the site expected the coin to trade at an average price of $60.55. DigitalCoinPrice’s AVAX price prediction for 2030 saw the token rising further to an average price of $179.91.

When considering an AVAX coin price prediction, it’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin or token’s price will be in a few hours, and even harder to give long-term estimates. As such, analysts and algorithm-based forecasters can and do get their predictions wrong.

If you are considering investing in cryptocurrency coins and tokens, we recommend that you always do your own research. Look at the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. Keep in mind that past performance is no guarantee of future returns. And never trade with money that you cannot afford to lose.

FAQs

Is avalanche a good investment?

It is hard to say. A lot will depend on how the market performs. 

In volatile cryptocurrency markets, it is important to do your own research on a coin or token to determine if it is a good fit for your investment portfolio. Whether the AVAX token is a suitable investment for you depends on your risk tolerance and how much you intend to invest, among other factors. Keep in mind that past performance is no guarantee of future returns. Never invest money that you cannot afford to lose.

How many avalanche coins are there?

On 3 April 2023, there were a little under 32.6 million AVAX in circulation out of a total supply of 422,018,587.

Will avalanche go up or down?

No one can really tell right now. As of 3 April 2023, DigitalCoinPrice was bullish in its long-term AVAX crypto price prediction, however WalletInvestor said there was bearish sentiment around the cryptocurrency. Remember that price predictions are very often wrong and that prices can, and do, go down as well as up. 

In volatile cryptocurrency markets, it is important to do your own research on a coin or token to determine if it is a good fit for your investment portfolio. Whether AVAX is a suitable investment for you depends on your risk tolerance and how much you intend to invest, among other factors. Keep in mind that past performance is no guarantee of future returns. Do not put at risk any money you cannot afford not to get back

Should I invest in avalanche?

Before you invest in AVAX, you will need to do your own research, not only on avalnache but on other coins and tokens.

Ultimately, though, this is a question that you will have to answer for yourself. Before you do so, however, you will need to conduct your own research and never invest more money than you can afford to lose because prices can go down as well as up.

Markets in this article

AVAX/USD
Avalanche / USD
37.4425 USD
0.8911 +2.450%
SOL/USD
Solana / USD
174.7566 USD
5.7684 +3.420%
BTC/USD
Bitcoin / USD
67060.25 USD
146.3 +0.220%

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 610,000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading