The crypto rally is on, yet again. For tokens supporting proof-of-stake Layer-1 blockchain networks, today's rally has been rather incredible.
As of 2 p.m. ET, Solana (SOL -4.50%), Avalanche (AVAX -2.82%), and Cronos (CRO -5.49%) have each seen double-digit gains, surging 16.5%, 22.1%, and 21.4%, respectively, over the past 24 hours. A mix of broadly bullish macro conditions and risk-on appetite appear to be driving a majority of risk assets higher today, prompting moves in higher-risk, higher-upside digital assets as well in today's session.
That said, these cryptocurrencies each have their own unique catalysts worth diving into. In particular, some rather prominent bullish forecasts are building, given the growth these three crypto networks have seen in transaction volume and fundamental metrics.
What's driving these incredible moves?
Solana has perhaps made the biggest headlines in recent days, with a positive recommendation from Cathie Wood earlier this week. Wood noted that Solana's impressive adoption, tied to its relatively low-cost platform and high transaction speeds, is a reflection of the significant utility Solana continues to generate for end users. Additionally, previous issues tied to downtime appear to have been resolved, and a shift toward a user preference for speed and cost as a top priority will likely continue to drive this network's outperformance.
Avalanche has seen a similar endorsement from some rather reputable parties. As collaborators, financial institutions JPMorgan Chase and Apollo Global and crypto players LayerZero Labs and Avalanche have continued to make progress in "revolutionizing the asset and wealth management industry" by allowing for the streamlining of "subscriptions and redemptions for funds offered by WisdomTree Prime." Using Avalanche's subnets, which are individual blockchains tailored to specific needs, this collaboration (codenamed Project Guardian) highlights the value blockchain networks can provide in improving how the world of traditional finance functions.
Cronos has seen its incredible momentum from last week continue, with today's surge tied to previous catalysts related to a $100 million accelerator program launched in September. The hope is that Cronos will be able to create some similar partnerships seen in this space (such as that of Avalanche), creating more of a moat around its crypto payments network via Crypto.com.
Can this momentum continue?
I'm of the view that crypto networks such as Solana, Avalanche, and Cronos are providing the sort of end market utility that's required in order for investors to continue to hold a positive view of the altcoin space. In order for these utility-based crypto projects to create value for investors via rising token prices, adoption and utilization metrics will need to continue to improve. On that front, each of these networks have seen strong numbers of late, suggesting investors are taking a more fundamentals-first approach to valuing these ecosystems.
The rally that's materialized thus far in 2023 has been rather remarkable, considering just how bearish sentiment was last year, and the overall returns many of the tokens in the alt coin space provided in 2022. That said, as investors look forward to lower interest rates over the medium term, it's entirely possible that the sort of environment investors saw in 2020 and 2021 could come back into play at some point, sooner than many think.
