I Bought AVAX This Morning, Here's Why
With the crypto market (HOPEFULLY) finding a bottom over the last few weeks, I thought it would be good to take a look at some of the alternative coins (AKA shitcoins) to see if there is either a market disconnect or an opportunity to try to take advantage of. The first thing I wanted to do was see what the market participants in Coinbase have been doing. Coinbase doesn't provide a ton of insight into what it's user base is doing in the platform, but they do offer 24 hour buy/sell percentages and coin popularity metrics. I decided to look at the top 10 coins based on market cap rank via CoinMarketCap.com and compare market cap rank with coin popularity.
For full disclosure, I did not include the stable coins USDC (#5) or Tether (#3) in the Top 10. Now I want to be completely upfront about this, I don't know how valuable these metrics really are. I think it's interesting that Polkadot (DOT) is more popular on Coinbase than Dogecoin (DOGE). Everything else pretty much falls in line. Coinbase users are generally buyers, so I think finding the higher percentage of buying is the best way to view that information. In the top 10 list above, DOT is number 2 in that metric after Solana. Avalanche is near the low. I find that interesting and I'll explain why.
Back in November I covered Ethereum for Seeking Alpha. Though the overall point of the article was why gas fees were problematic, I compared ETH's Token Terminal metrics with some of the "ETH Killers" that had been crowned in the crypto sphere. Specifically Solana (SOL), Cardano (ADA), and Avalanche (AVAX). At the time, it was clear that pricing levels in SOL, AVAX, and ADA where way ahead of themselves based on the lack of activity. Two and a half months later, how do those same metrics compare?
Based off the action since late November, the 30 Day revenue trend in Avalanche is far superior to its "ETH Killer" competitors. ADA is up slightly. Solana has kind of collapsed. Now, these aren't adjusted for coin price. So that should be considered.
But all of three of these coins are down big time since late November. Avalanche has still seen a surge in 30 Day revenue while the other two have lagged. To expand on Avalanche specifically, here's the fully diluted market cap over-layed with the total revenue from transactions. As I said back in November, the market cap got way ahead of itself.
What's interesting now though is the revenue volume has held up really nicely. Given the big selloff from the peak in just a few weeks, I think Avalanche is worth a look as a long term play here if you like to dollar cost average into positions. I actually don't hate that only 60% of Coinbase users are buying Avalanche while 75% are buying Solana. I think that can be explained away by users with a much higher cost basis in Solana simply averaging down.
Disclosure: I’m not an investment advisor. I merely share what I do and why I do it. You shouldn’t take anything I say as investment advice and always do your own research when making investment decisions. Cryptocurrencies, tokens, STONKs, and digital trinkets could all go to zero. I have no job and I live in my wife’s basement. I’m the last person on the face of the earth who you should listen to for financial advice or life advice. I’m not featured on trustworthy financial news sources like CNBC or Bloomberg and I don’t wear a necktie when I make my trades. I purchased AVAX this morning.
