What happened
For investors looking at some of the best-performing cryptocurrencies in the market right now, Avalanche (AVAX -1.75%) has to be up there.
This cryptocurrency has gained a tremendous amount of interest. Investors looking at this recent momentum play may notice that Avalanche remains more than 10% above Friday's market close at the time of writing.
Any sort of double-digit move over such a short period is worth considering. However, zooming out, we can see that AVAX is actually up approximately 50% since the beginning of the month.
Investors appear to be factoring a couple key pieces of news into the price of AVAX tokens. Earlier this month, Avalanche announced the launch of a $200 million Blizzard fund to grow its decentralized finance (defi) ecosystem. Secondly, fund manager Grayscale announced it is considering adding an Avalanche-related product to its portfolio.
Image source: Getty Images.
So what
Both of these catalysts are certainly big news for Avalanche.
The ability for developers to build out a robust ecosystem of defi applications is a big deal. Crypto investors are interested in networks that can support real-world utility. For Avalanche, this enhanced utility creation potential has certainly driven value-oriented crypto investors to consider the AVAX token.
Additionally, the capital flows that could potentially come to AVAX following the addition of a Grayscale trust focused on this token is big news. How much capital flows into a particular token, and the overall crypto segment for that matter, is a key driver of valuations in the cryptocurrency world. Regardless, the fact that a renowned name like Grayscale is diving into Avalanche suggests to investors there's something to this network.
Now what
Investors intrigued by the growth potential of the defi world and what thought leaders like Grayscale think about various tokens may want to take a look at Avalanche. Indeed, these reasons alone are enough to drive interest in this token. And as we've seen, interest and sentiment are key drivers of where capital moves in the crypto world.
Like all other cryptocurrencies, Avalanche carries risk. That said, this is a token with what appears to be some compelling upside. Accordingly, it's on my watch list right now.
