Reasons behind AVAX price record high: large fund support, liquidity migration and rising TVL

特邀专栏作者

2021-09-17 20:30 (UTC+8)

This article is about 1605 words, reading the full article takes about 3 minutes

AVAX prices surged to new all-time highs as massive amounts of money flowed into the protocol via its cross-chain bridge, and institutional investors pledged $230 million in funding for the rapidly expanding Avalanche ecosystem.

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Compiler: Zion Editor in charge: karen

Avalanche (AVAX) hit an all-time high of $68.89 on Sept. 16, and over the past few months, the project has begun challenging the Ethereum network’s dominance as a smart contract platform. According to the project's website, the layer-one protocol is capable of processing more than 4,500 transactions per second, with all transactions finally confirmed in less than two seconds.

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AVAX/USDT 4-hour chart Source: TradingView

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Avalanche is backed by a large fund

After Avalanche announced that several large funds including Polychain Capital, Three Arrows Capital, and Dragonfly Capital participated in the project’s $230 million financing, the price of AVAX rose sharply on September 16.

This is the largest investment in the Avalanche ecosystem to date, showing that large institutional players are starting to take a serious interest in this Ethereum competitor.

The Avalanche network is cross-chain compatible with Ethereum, which means that any token or project running on Ethereum can fully migrate to the Avalanche ecosystem and take advantage of its higher throughput and lower transaction costs.

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Liquidity migration and rising TVL

The second reason for AVAX's constructive strength is the continuous transfer of assets from networks like Ethereum to Avalanche to participate in its growing decentralized finance (DeFi) ecosystem.

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Total Value Locked on Avalanche Source: Defi Llama

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Partnerships and crypto-related integrations

A third factor that helped boost AVAX's value was a series of partnership and integration announcements that excited investors and put the project in the spotlight.

The Avalanche NFT ecosystem has attracted a lot of interest thanks to a partnership with player card and memorabilia company Topps, which launched its “Inception” collection of NFT digital collectibles on the network.

The Aave community, one of the top DeFi protocols in the cryptocurrency ecosystem, is also voting to determine whether investors want AAVE to launch on the Avalanche network. Voting to pass may further increase the TVL on Avalanche, as AAVE assets held on Ethereum are likely to be migrated to Avalanche.

Aave proposal is live!
If you are part of the AAVE community and would like to see Aave deployed on Avalanche, please cast your vote now
— Avalanche (@avalancheavax) September 15, 2021

According to data from Cointelegraph Markets Pro, the market situation for AVAX has been favorable for some time.

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Source: Cointelegraph Markets Pro

As shown in the chart above, AVAX's VORTECS™ score surged to a high of 86 on September 13, and about 24 hours later the AVAX price rallied 40% over the next two days.

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