Oct 19, 2022
VOT Research Desk
Market Analytics and Considerations
Although almost all cryptocurrencies have declined during the year, the 80% declines in Solana and Avalanche stand out.
Avalanche, which is well-known for its expertise in DeFi, is making efforts to increase its awareness with mainstream cryptocurrency investors in sectors like NFTs and Web3 games.
Solana is rapidly progressing in the NFT market and keeps announcing ground-breaking new initiatives, such as a novel “crypto phone” for next year
The cryptocurrency market is clearly indicating that Ethereum (ETH -2.00%) has prevailed over the Layer 1 blockchains at this time.Even though it is down 65% for the year, all of its primary Layer 1 blockchain competitors have suffered even greater losses.Solana (SOL -3.56%) is down 82%, Avalanche (AVAX -3.44%) is down 86%, Fantom (FTM -2.62%) is down 92%, and Cardano (ADA -3.13%) is down 73%. Algorand (ALGO -3.22%) is down 81%.
Solana and Avalanche are the two that have the greatest likelihood of succeeding. Both are former “Ethereum killers” who created a great deal of buzz prior to the start of this year. Both appear to be oversold in comparison to Ethereum based on recent market performance, and both may be ready to jump in 2023.
The argument in favor of Avalanche It is almost unbelievable how far Avalanche has fallen in the past year. In point of fact, it has been one of the year’s worst altcoins.It has struggled to gain traction in 2022, despite having some of the lowest transaction costs and fastest transaction processing speeds of any blockchain.
Non-fungible tokens (NFTs), Web3 gaming, and the metaverse have been challenging for Avalanche as it attempts to diversify away from its traditional strength in decentralized finance (DeFi). Avalanche has made tentative efforts to diversify away from DeFi.For instance, NFTs stand out as a particular crypto weakness.
However, there have recently been some signs that are positive. As a sign of support for the currency, online brokerage Robinhood (HOOD 2.25%) listed Avalanche for trading in August. Additionally, OpenSea, one of the world’s most well-known NFT marketplaces, began listing Avalanche NFTs in September and expanded its support for its NFT projects. This could really help the digital currency reach a larger number of mainstream investors and dispel any doubts about its NFT efforts.
However, the fact that investors appear to be unfairly punishing Avalanche for an alleged scandal that surfaced at the end of August may be the biggest reason why the team could fail.Ava Labs, a New York-based company that promotes and develops the Avalanche blockchain, received information about potential market manipulation from an anonymous whistleblower at that time. Crypto Leaks is similar to WikiLeaks for the cryptocurrency industry. The market is not giving Avalanche the benefit of the doubt, despite the fact that AVA Labs has vehemently denied any allegations.
This year, there have been so many scandals in the cryptocurrency industry that investors appear to be overly cautious with Avalanche. The token may have room to run in 2023 if this controversy can be resolved.
Another of the “Ethereum killers” that investors adored in 2021 is Solana. The growing concern regarding outages and glitches on Solana’s blockchain network appears to be the primary factor in the company’s decline this year. Solana experienced an 18-hour blackout at the beginning of the year, which was widely reported. Additionally, there have been periodic, shorter outages throughout the year. As a result, it would appear that some investors have given up on Solana.
But Solana is a good investment because it has a lot going for it. First and foremost, it commands close to 25% of the total market in terms of trading volume, clearly surpassing Ethereum in the NFT market. Solana NFTs trade more frequently than Ethereum NFTs on a daily basis. That was unimaginable at the beginning of the year.
Additionally, Solana’s brand-new product launches continue to awe. It was Solana Mobile during the summer and Solana Pay at the beginning of the year. Additionally, Solana is the blockchain network that produced the major breakout cryptocurrency hit of 2022:the game STEPN, which rewards exercise (GMT -2.41%).
Solana is poised to reclaim its position as the market leader in blockchain and cryptocurrency innovation in 2023.The token will expand the number of its in-real-life (IRL) cryptocurrency retail stores as a result of its renewed efforts to build its brand. In addition, the digital currency will launch the world’s first “crypto phone” in the first quarter of the year as a result of its pioneering efforts in mobile. The phone is made to make buying and selling crypto easier than on other mobile devices.Solana also launched a $100 million fund this summer to invest in future projects.
Two possibilities that are just about to emerge In the year 2022, all of the talk was about Ethereum and the first phase of its system upgrade, The Merge.Investors pushed down the prices of all Ethereum challengers as a result. As a result, Solana and Avalanche have significantly underperformed Ethereum and are currently down more than 80% for the year.
Even though each of these cryptocurrencies has had its fair share of issues this year, sentiment could shift quickly. Keep in mind that both were popular cryptos in the past and have frequently been touted as “the next Ethereum” recently.
Therefore, if Ethereum fails in any way with the implementation of The Merge, it is certainly not out of the question that they will rebound in the coming year.
