Avalanche Dreams Big: Can AVAX Climb Back To Its All-Time High Peak?
Understanding the dynamics of supply inflation is paramount in navigating the realm of cryptocurrency investments, providing a crucial edge in the market. A deep dive into Avalanche’s (AVAX) supply inflation by Finbold unveils intriguing perspectives.
Our analysis delves into the hypothetical scenario of AVAX reaching its all-time high market cap, shedding light on its potential trading price. By utilizing leading indexes and emphasizing demand as the benchmark, derived from capitalization, we explore the intricate interplay of supply and demand in influencing a cryptocurrency’s price movement.
AVAX, with a peak price of $146.22 per token on November 21, 2021, achieved its highest market cap of $33.81 billion the next day, boasting an estimated circulating supply of 231.226 million AVAX.
Let’s dissect Avalanche’s native token supply inflation and its economic repercussions. According to the latest data, Avalanche’s circulating supply is at 365.772 million AVAX. This translates to a supply inflation of 134.546 million AVAX (58%) in two years, equating to an annual inflation rate of approximately 29% — surpassing Solana’s yearly inflation.
The price projection underscores the substantial economic impact of this inflation surge. Should AVAX match its past speculative demands, it would trade at a proportionally lower price than its previous all-time high, revealing the potential ramifications of its staggering inflation.
Considering the circulating supply on December 21, AVAX would hypothetically be priced at $77.94 per token at its peak capitalization, marking a noteworthy decline of $68.28 (46.7%) from its 2021 zenith. Nevertheless, this still signifies a prospective 90% increase from the current price of $46.00.
It’s crucial to note that this forecast hinges on maintaining the same demand for Avalanche as observed in 2021, with no guarantees of a recurrence. Conversely, unforeseen surges in demand in the upcoming years may counterbalance its ongoing supply inflation, adding an element of uncertainty to AVAX’s future trajectory.
