Top Crypto Idea for March: Avalanche

Here’s why Avalanche (CRYPTO:AVAX) could be a top cryptocurrency to consider amid the market turmoil of late.

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Avalanche (CRYPTO:AVAX) is the planet’s fourth-largest DeFi chain with more than 171 protocols. It is a noteworthy asset in the cryptocurrency space. Avalanche’s network isn’t restricted to its functional capabilities, and has become a promising investment vehicle.

Last year, Avalanche soared more than 1,000% in one month. Considering how bearish the market sentiment has been in the crypto world, perhaps another rally like this may not come for a while. That said, those bullish on DeFi growth may want to look at this token right now.

Here’s more on why Avalanche is a top crypto idea of mine for March.

Avalanche has posted impressive price rallies of late

A recent report penned by an institutional cryptocurrency fund manager revealed that AVAX-based investment vehicles saw inflows of around $25 million in the week that ended February 21. When it comes to inflows, this is the second-biggest one recorded in the given period after Bitcoin‘s $89 million.

At the same time, the ongoing conflict between Ukraine and Russia resulted in headwinds across riskier assets, which instilled fear into the cryptocurrency and equity markets. The interesting part here is that this capital injection came in spite of these macro headwinds. Following these inflows, AVAX surged from $67 to $82.50 over a two-day period. This token’s recent returns, while negative, don’t negate the fact that investors remain highly bullish on this token over the longer term.

Launch of ‘Subnets’

One of the key drivers of these recent rallies is the way Avalanche is designed. Avalanche is a network with a high throughput rate. However, like other networks, Avalanche isn’t immune to rising fees and network congestion. Like its mega-cap “big brother” Ethereum, Avalanche could see network slowdowns over time, as witnessed by other proof-of-stake networks seeing surging interest.

Avalanche has looked to solve this problem using subnets. Essentially layer-2 scaling solutions, similar to what’s seen with Ethereum, Avalanche has found a way to increase the number of lanes on its highway, so to speak. This has resulted in lower fees and quicker transaction fees. In other words, improved scalability.

Recent testnet versions of Avalanche’s subnets will work for a range of decentralized exchanges and blockchain-based games. As the network’s DeFi ecosystem continues to grow, Avalanche is proving it’s a network that’s willing to do what it takes to improve usability and promote growth.

Bottom line

Overall, there’s a lot to like about Avalanche. As an Etheruem competitor, Avalanche provides immense growth potential. That is, should this network continue to take market share away from its peers.

I think Avalanche has a shot at doing this. Accordingly, should sentiment improve, this is a token with impressive upside. Right now, Avalanche is one of the top tokens on my watch list for March.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald owns Ethereum. The Motley Fool owns and recommends Ethereum.

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