Launched in 2020 by Ava Labs, Avalanche provides a scalable and interoperable ecosystem for the deployment of smart contracts, decentralized applications, and enterprise blockchains. As a Proof of Stake network built for decentralized finance, Avalanche can process thousands of transactions per second with low fees and a finality of under two seconds. It is also Solidity-compatible, meaning Ethereum dApps can easily be deployed to Avalanche.

AVAX is the native token of Avalanche and is used to secure the network, pay fees, and provide the basic unit of account between blockchains in the Avalanche ecosystem. Although it hasn’t been around for as long as many other coins, the price of AVAX has already seen significant change and if you want to know why then you’re in the right place. We’ve compiled everything you need in order to get a better understanding of AVAX price – as well as the factors which influence it.

Avalanche Price History

Following an initial coin offering in July 2020, AVAX hit the crypto market in September, trading at about $5. Prices dipped as low as $3.20 in early October, rebounding to more than $4.80 a week later. The rest of the year was characterized by alternating upswings and downswings, though the overall trajectory was downward. Prices dipped below $2.90 in November and rose to above $4.50 later that month. As the year came to its conclusion, AVAX was worth $3.19, having made a loss of over a third since September.

Prices immediately rallied in January, as the Avalanche market cap surpassed $1 billion for the first time and AVAX surged towards $15, before consolidating for the rest of the month. The first part of February proved to be even stronger as prices skyrocketed, culminating in a peak on Feb. 10 at AVAX’s all-time high of $63.31. At this point, AVAX had provided year-to-date gains of almost 1,900%.

Prices crashed sharply at that point and the rest of the month saw AVAX shed 65% of its value, dipping below $22 at the end of February. The next three months proved to be volatile, as prices rallied to highs above $40 in March and April, each time followed by a significant pullback.

A fresh surge at the end of April carried AVAX to a peak in early May of nearly $45, when the Avalanche market cap hit its all-time high of $5.5 billion. The rest of the month was fairly bearish, however, and AVAX hit a low of about $12 a few days after crashing by 55% during a single day. Prices were back above $18 as June started.

Analyzing Avalanche Price History

[guidelink avax] price history can be analyzed with many of the same techniques as the stock market. Technical analysis involves using various indicators while studying price charts in order to make sense of previous price movements. With AVAX, as with many other tradable assets, large price swings are often accompanied by spikes in trading volume, as a large number of traders buy or sell their coins on exchanges.

Fundamental analysis, on the other hand, looks at the finances and activities of a company, as well as the state of the wider market and economy. Avalanche raised $42 million through its ICO and the team behind the project comprises PhD computer scientists and Bitcoin veterans. Avalanche technology has a wide range of potential use cases and is already being leveraged by DeFi applications like Pangolin, enterprises like Ryval, and non-fungible token projects like Polyient Games. These could potentially be good signs for the fundamental Avalanche value.

Broader market trends have also played a role in the price history of AVAX. Its surge early in 2021 wasn’t unique – the entire crypto market pumped around this time. Bitcoin was in the midst of a major bull run then, and with such strong market dominance, any significant price movement for Bitcoin often impacts other cryptocurrencies.

The sudden crash in May 2021 was also market-wide, affecting every single major cryptocurrency. Various contributing factors have been suggested, including comments made by Elon Musk, a crackdown by Chinese authorities, liquidations, and a healthy market correction.

The overall price trend of AVAX tends to follow what’s known as a boom-and-bust cycle. This is a pattern in which a period of growing excitement leads to a surge in price before doubt and disillusionment set in and result in a crash.

Factors Influencing The Price of Avalanche (AVAX)

A variety of different things can affect the market price of AVAX, including project news and developments, the flow of assets on exchanges, public sentiment, and emerging trends in the wider crypto and global economies.

AVAX has a capped max supply of 720 million tokens, making it a scarce asset, like Bitcoin, and so potentially a good store of value in the long term. The community can vote on the rate at which the max supply is reached through Avalanche consensus. The scarcity of tokens is increased, as fees from transactions on Avalanche are burned, putting upward pressure on the Avalanche price.

Demand for AVAX is driven by its various utilities, one of which is governance. As well as the emission rate, AVAX holders can govern transaction fees and staking times and amounts. The right to vote on these parameters could encourage Avalanche network users to buy AVAX.

AVAX is also used to secure the network and validators earn staking rewards proportional to their total stake. As the amount of tokens staked increases, there is less AVAX available on the market, and the staking rewards could incentivize more people to buy AVAX to become validators.

Finally, AVAX is used to pay transaction fees on the network, meaning there is further demand from dApps built on Avalanche and their users. This demand should increase as the ecosystem expands and gains more users. More projects deploying on Avalanche could therefore boost the price of AVAX.

Live Avalanche Value and Market Cap

The market price of AVAX varies from moment to moment as it’s dictated by the balance of buyers and sellers on exchanges, which is in constant flux. 

Given AVAX’s volatility, its current price can change by a large amount in a very short space of time. The market cap of Avalanche is equal to the price of AVAX multiplied by the number of AVAX in the circulating supply.

Avalanche Price FAQ

How is the price of AVAX calculated?

AVAX’s price at any given time is decided by the balance of supply and demand on exchanges. When more people are buying AVAX than selling it, the price goes up, and when more are selling than buying, the price goes down.

Why is the price of AVAX different on each cryptocurrency exchange?

AVAX price is based purely on trading as there is no standard global Avalanche price, so no one knows what it is “supposed” to cost. The trading volume and liquidity are different for each exchange and those differences are what affect the price.

What will AVAX be worth in the future?

It’s impossible to make price predictions with any kind of absolute certainty, as a whole host of different factors could play a role in determining the future Avalanche value. However, if more projects choose to build on Avalanche in the future and/or existing projects like Pangolin gain more users, AVAX price could see an increase.

Conclusion

Although it hasn’t been trading for as long as some other cryptocurrencies, the price history of AVAX has nonetheless been eventful, with the token going from lows of under $3 to highs of over $60. The journey hasn’t been smooth, however, as AVAX’s volatility has led to surges and crashes along the way.

Many different factors have played a role in determining the Avalanche price, including demand from validators, the number of apps and users on the Avalanche network, and trends in the rest of the cryptocurrency market and wider economy. Its current valuation is derived from the balance of supply and demand in the markets and constantly changes.

If you want to get started with the most user-friendly trading experience on the market, register with Kriptomat today to begin your journey into the world of Avalanche and cryptocurrencies!