stub Analysts Expect an Avalanche (AVAX) Price Surge Following the USDC Launch on its Chain - Securities.io
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Analysts Expect an Avalanche (AVAX) Price Surge Following the USDC Launch on its Chain

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Circle’s USD Coin (USDC) has been one of the largest stablecoins in the world — currently ranking as the 7th-largest cryptocurrency by market cap. The coin is still second to Tether, which has a market cap that is $35 billion larger than USD Coin’s own. However, the USDC has been making advances recently, launching on new chains, and attracting new users, which is why many expect it to continue its market cap growth.

The coin recently arrived on Avalanche’s blockchain, which is significant as it indicates that Avalanche might be preparing to make a push deeper into the DeFi ecosystem. In fact, the USDC arrival might make it lucrative for dApps to launch their projects in the Avalanche ecosystem.

And, with AVAX being the project’s native coin, it might see a significant price boost if the project’s DeFi ecosystem begins to thrive due to the USDC listing.

What does USDC's arrival mean for Avalanche?

According to analysts, the Total Value Locked (TVL), which is essentially a market cap for DeFi apps, has grown over thirty times for Avalanche’s dApps since August 2021 and December 2021.

The initial growth of the DeFi sector on Avalanche actually came as part of the project’s plan to improve this sector. Some may still remember that the project launched an Avalanche Rush initiative, where $180 million was used as part of the incentive program.

Now, Circle’s stablecoin is finally live on Avalanche’s blockchain, which brings greater diversity to the project. More than that, it provides investors with an alternative to blockchains that rely solely on Tether.

USDC’s growth led the stablecoin to account for about one-third of the entire stablecoin supply in the crypto sector, and the project is seeing a continuous adoption that progresses quite rapidly. Circle’s stablecoin is Tether’s biggest competitor and the second-largest stablecoin in the world of digital assets.

As mentioned, fiat-backed stablecoins do have the ability to trigger a sudden growth in the on-chain activity of networks on which they are introduced, and drive developers to start building their DeFi projects there. With Avalanche now being one of them, analysts expect a 10% rally of the AVAX coin, which might potentially bring it to the $91 target.

After that, analysts expect Avalanche price to target $142 as the next Fibonacci extension target.

Avalanche itself is compatible with Ethereum’s smart contracts, which should also assist in its growth since that means that USDC is available on C-Chain, which enables the creation of Ethereum-compatible smart contracts.

Other than Avalanche, USDC is also available on a number of other major networks, including TRON, Solana, Hedera, and Stellar. Avalanche is only the latest in its rush to expand, which brings new opportunities for both projects.

Ali is a freelance writer covering the cryptocurrency markets and the blockchain industry. He has 8 years of experience writing about cryptocurrencies, technology, and trading. His work can be found in various high-profile investment sites including CCN, Capital.com, Bitcoinist, and NewsBTC.