Avalanche and Bitcoin are at two opposite ends of the blockchain development timescale. Whereas Bitcoin was the original cryptocurrency, built on one of the world’s first truly viable blockchains, Avalanche arguable represents the cutting edge of the technology.
The cryptocurrency market has seen a protracted downturn in the opening weeks of 2023, with Bitcoin alone dropping from more than $68,000 in November 2021 to just over $37,000 at the time of writing. Avalanche has seen similar losses. Of course, most investors expect the market to bounce back, but the question now is which coins will lead the recovery?
Historically, Bitcoin has served as an indicator for the wider market, but there’s no denying that projects like Avalanche are far more advanced. Plus, as concerns continue to grow over Bitcoin’s scalability, resource consumption and environmental impact, it has been suggested that the original cryptocurrency will eventually be overshadowed by projects with newer, faster blockchains.
So is Avalanche a better investment than Bitcoin in 2023, or will the market leader hold on to the top spot and continue to lead from the front? In the following Avalanche vs Bitcoin comparison, we’ll consider the case for each project as well as hear from top analysts on what they are predicting for each one’s prospective price growth.
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Avalanche vs Bitcoin - The Fundamentals
It would be a mistake to think that technical superiority is the only driver of a cryptocurrency’s price. In fact, the market has consistently shown that this is often not much of a factor at all - hence BTC is still the most valuable token some 13 years after its launch. However, understanding the difference between two projects is important if we are to gauge its long term-potential with any accuracy.
With this in mind, let's take a brief look at the ley fundamentals of each project.
Avalanche
Background
Avalanche was founded in 2018 by Cornell computer scientist Emin Gun Sirer and built by Ava Labs, which is a US-based for-profit firm but its development is down to the Avalanche Foundation, which is not-for-profit. The platform launched proper in 2020 but there have been numerous upgrades since its launch - some of which are ongoing.
Avalanche is a smart contract and cryptocurrency platform that was hailed as part of a new generation of smart chains, which aimed to solve scalability issues that had been identified with the original smart chain - Ethereum.
Due to many leading projects being built on Etehreum, the meteoric rise of DeFi put a huge amount of strain on its infrastructure and highlighted its shortcomings when it came to high-volume transaction processing. Avalanche was developed to fix this issue and provide developers a reliable platform that could handle the ever-growing demands of DeFi.
Platform fundamentals
Avalanche is touted as the fastest blockchain on earth and developers claim it can achieve transaction speeds in excess of 4,500 TPS - which is fairly impressive when compared to Ethereum’s current standard of 15-20 TPS and certainly a massive improvement on Bitcoin’s 4 - 5 TPS.
The reason Avalanche is able to attain such an impressive performance is its unique, multi-chain architecture. First, there is the Exchange Chain (X-Chain). This is the base-layer that underpins the project and is where the AVAX token is issued and the home of the Avalanched Virtual Machine and consensus protocol.
Then there’s the Platform Chain (P-Chain) which is where subnets operate. In other words, this is where developers can build their own blockchains on top of the Avalanche platform and leverage its Snowman consensus protocol.
In addition, there’s also the Contract Chain (C-Chain). This layer is where smart contracts and dApps are deployed. The C-Chain is effectively an iteration of the Ethereum Virtual Machine compatible, making Avalanche compatible with most Ethereum-based projects.
The AVAX token
All fees for using the Avalanche protocol are payable in AVAX, the project’s native token. Importantly, AVAX used to pay fees is then burned, making it, in theory, a deflationary token. Avalanche uses a proof-of-stake consensus mechanism, which means those holding the token can stake it in exchange for a reward, which is currently estimated to be around 10% PA.
The maximum supply of 720,000,000, half of which was set aside for staking rewards. So far around 700,000 have been burned so far as part of the staking mechanism.
Check Out: How To Make (Or Lose) Money With Avalanche
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Bitcoin
Background
By this stage, most people are at least vaguely familiar with Bitcoin and its origins. The world’s first major cryptocurrency came into being in 2009, following the now legendary whitepaper authored by the enigmatic - and anonymous - Satoshi Nakamoto.
It is hard to overestimate the impact Bitcoin has had on the worlds of digital technology, finance and investment. Initially, there were many critics who dismissed the very notion of a secure digital currency, but after several major price hikes - of several thousand percent in some cases - forward-thinking investors soon started to take notice.
Whilst the project was truly revolutionary in its time, by 2023 blockchain technology has moved on and Bitcoin’s underlying blockchain, with its cumbersome SHA256 proof-of-work consensus mechanism, is looking pretty dated. However, make no mistake, it is still the world’s most valuable cryptocurrency token by a considerable margin.
Transactions and Speed
We’ve already noted Bitcoin’s transaction speeds - at around five per second. Let’s face facts here, this is a pretty paltry figure by today’s standards and realistically it means that Bitcoin will never be a viable payment method on any kind of commercial scale.
Bitcoin’s proof-of-work mechanism requires miners with extremely powerful computing resources to compete in solving equations to very new blocks, for which they are paid a block reward. Unfortunately, this process is now largely outdated and most modern platforms have or are switching to the faster proof-of-stake mechanism.
Realistically, Bitcoin is no match for Avalanche in this area. However, it’s worth noting that blockchains significantly faster than Bitcoin had emerged by 2013 and as of yet, none have managed to come close to rivalling its market capitalisation. As such, it seems it is too early to count Bitcoin out just yet.
Supply and Demand
Bitcoin has a hard cap of 21 million coins, meaning that there will never be more BTC tokens than this. It is important to be aware of this detail as it’s crucial for understanding Bitcoin’s tokenomics.
As we’ve mentioned above, miners are rewarded for their work with BTC. This is how new BTC is released into the system. There are currently some 18,942,668 BTC in circulation, which looks pretty close to the hard cap. However, the block reward is paid out to miners halves at regular intervals.
For example, in 2012, miners received 25 BTC for each block added to the chain. In 2016, this number was halved to 12.5 BTC. Then in 2020 it was halved again to its current 6.25. Basically, the reward halves roughly every four years. This means fewer and fewer tokens are being released.
In addition to this, investors tend to buy and hold Bitcoin - taking it out of circulation and therefore increasing the scarcity of the token. This, combined with the halving block reward, means that in theory at least, the supply of Bitcoin will not meet demand, which in turn would drive prices higher.
Read Also: Six Reasons Why Bitcoin Has Intrinsic Value
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Avalanche vs Bitcoin: Which Is The Better Investment?
There’s no denying the fact that Avalanche is a far more advanced project than Bitcoin - and so it should be, having launched some ten years later. However, so far AVAX’s token price is nowhere near Bitcoins and there are several other projects that can boast a superior performance to the original cryptocurrency.
In other words, figuring out the better investment out of Avalanche and Bitcoin isn’t as simple as looking at the technical particulars. We also need to look at data relating to each project’s token price
Bitcoin vs Avalanche: Price History
First thing’s first, before we can start looking at forecasts we should consider the price history of both BTC and AVAX - after all, it is from this data that cryptocurrency price predictions are generated.
AVAX
First up, the Avalanche. Having launched in 2020, the AVAX token does not have an extensive price history for us to analyse. However, despite its comparatively short existence, AVAX is no stranger to substantial price rallies.
When it was first listed, AVAX was fetching a price of around $5 - which is higher than many new projects manage in their first few days. The token actually held this value or thereabouts for several weeks. However, as 2020 drew to a close the token saw a brief downturn, which sent it down to $2.95.
Once 2021 was underway however, AVAX’s downturn soon ground to a halt and in the first half of January, the token had grown by almost 350%, reaching a trading price of $13.13. This led to a flurry of interest in the token and February saw Avalanche’s price-driven to $51.50, before another downturn saw its price drop back to around $26 per token.
Whereas some tokens saw huge upswings and record prices reached in April and May, AVAX’s price surge was slightly more subdued, hitting $39.07 by the time the summer started and a market-wide downturn followed. September 2021 was a more successful month for AVAX, wherein its token price achieved $76.35 before things slowed down through October. In November, AVAX was on the up again, reaching its record high of $144.96.
A market-wide downturn then struck in January 2023 and most tokens have seen significant losses. At the time of writing, AVAX was trading at $71.72.
BTC
Bitcoin’s huge price leaps are well documented by this point. Having hit started out being more or less worthless, then trading for a few pennies a year or so after its launch, by 2013 BTC had surged to an incredible $1,242 - yielding huge returns for investors who had the foresight to buy in early.
Bitcoin has also become equally notorious for significant downswings - most notably the infamous cryptocurrency bubble that was to burst in 2018. At the start of that year. Bitcoin had reached an unprecedented $19,783 per token before a market-wide crash sent it spiralling to $3,430 before the year was out.
By this stage, however, the cryptocurrency market had changed beyond all recognition and it wasn’t long before the market was once again seeing substantial growth. Even the COVID pandemic did little to hamper its progress. When January 2021 arrived, Bitcoin soared to $40,000. Just a month later BTC went as to $64,804.
Once again, there was a slight downturn over the late summer, but in November Bitcoin soared to its all-time high of $69,044, before going into decline. That decline has continued across January 2023 and, at the time of writing, BTC was trading at $37,603.
Bitcoin vs Avalanche: Future Predictions
By looking at previous price data, we can build an understanding of how a token moves in line with the wider cryptocurrency market, as well as how it may respond to certain market forces. However, investors are more interested in what is likely to happen.
Cryptocurrency price predictions are never guaranteed, but as it stands they are the best information we have for building an investment strategy.
Avalanche
Avalanche saw significant gains throughout 2021, even if it did occasionally diverge from the general movement of the cryptocurrency market as a whole. As 2023 gets underway, it would appear that AVAX has been pegged as a potential success story.
DigitalCoinPrice, for example, believes that AVAX can build and hold steady gains throughout the year. By the end of the first quarter, then platform expects Avalanche to be worth around $96.82 - up 35% on today’s trading price. Its biggest month is expected to come in December, when AVAX will once again cross the $100 threshold and hit $105.80 before the year is out. A similar pattern is also predicted for 2023, when we could see AVAX grow by up to 71%.
Meanwhile, WalletInvestor is even more optimistic. Its figures suggest that AVAX could regain the $100-mark as early as May 2023, potentially reaching an average trading price of over $150 across the summer. As the year draws to a close, the platform has predicted that Avalanche could reach a maximum trading price of $211.69.
TradingBeasts is normally noted for its reserved price predictions - and is certainly predicting a difficult year ahead for several tokens. However, it seems surprisingly optimistic when it comes to AVAX. Its forecast suggests that Avalanche will see subdued growth in the first quarter of 2023, creeping up by around 0.18%. However, this growth is expected to gather pace and AVAX will reach $73.47 by the end of the summer. By the end of the year, it is expected to have hit $77.75 - growth of around 16%.
Don't Miss: Avalanche Price Predictions
BTC
So it seems that Avalanche is looking at a positive year, but what about Bitcoin? Many analysts have had to race to adjust their forecasts following the market downturn that has dogged the cryptocurrency market throughout January, so can BTC lead the recovery in the coming months?
DigitalCoinPrice appears to believe so. After a turbulent first quarter, the analyst believes that BTC will have recovered to $51,260 by the start of summer - growth of some 37%. A slight downturn is expected across June - as is often the case - but in August BTC is predicted to be worth $55,959 - up by nearly 50% on today’s price. A downturn is expected to kick in at the end of the year, but December could see BTC at an average trading price of $51,806.
WalletInvestor sees Bitcoin having a slow start to the year, but nonetheless growing steadily month-by-month. By April, the token is expected to reach an average of $46,189, but the more significant growth is predicted to come post-summer, with BTC at a potential average of $53,941 by September. As 2023 draws to a close, we could then see Bitcoin reach a potential maximum of $68,366.
Finally, TradingBeasts appears to be one of the few platforms that believes Bitcoin will struggle to recover in 2023. According to its analysis, the token will continue on a downward trend throughout the year. By the time summer arrives, BTC is predicted to have lost around 2.8% of its current value and come to the end of the year, it could be down 5.4%. BTC is not expected to fair much better in 2023, but recovery will come in 2024, with BTC gaining a predicted 30% throughout the year.
Once again, we should emphasise that these are only predictions and they are predictions that are frequently adjusted at that. However, as it stands they are some of the best indicators we have for making our investment picks.
Check Out: Bitcoin Price Predictions
Avalanche vs Bitcoin: What The Experts Say
So now we have looked at the previous price movement for both AVAX and Bitcoin, as well as considering what analysts are predicting for each coins’ future, a final consideration is what business leaders and industry insiders have to say.
Galaxy Digital’s Mike Novogratz is a long-time supporter of Bitcoin, so it will be of little surprise that he has been highly vocal during the period of downturn in January 2023 - in fact, Novogratz has gone as far as to bet stockbroker and notorious cryptocurrency sceptic Peter Schiff $1 million that Bitcoin will be back above $35,000 a year from now.
According to Novogratz, whilst the current downturn may continue for much of the year, ultimately there is a “tremendous amount of institutional demand on the sidelines,” which will eventually see Bitcoin back in black.
When it comes to Avalanche, there aren’t quite as many high-profile comments available. However, pseudonymous trader Smart Contracter has predicted that Avalanche is due a strong upswing and could be “about to go into all-time high” territory.
Avalanche’s biggest vote of confidence, however, came when the Bank of America cited Avalanche as a credible alternative to Ethereum and noted its superior scalability. Attention was also drawn attention to Deloitte’s implementation of the Avalanche platform for its Close as You Go (CAYG) disaster-relief platform, which the Bank of America said demonstrated how corporations can “leverage blockchain technology to increase efficiencies and reduce costs.”
Avalanche vs Bitcoin: Conclusion
From a technical standpoint, Avalanche vs Bitcoin is a pretty one-sided competition, which is to be expected given that the former is a much newer project. However, we have already pointed out that Bitcoin’s blockchain performance was actually surpassed many years ago, yet it remains the most popular, most talked about and most valuable cryptocurrency out there.
Judging by the price predictions we looked at for both Avalanche and Bitcoin, it seems that both tokens could do well in 2023, however, there are some analysts that believe Bitcoin could take longer to recover. As such, potential investors will need to think about timeframes when choosing between these tokens.
There’s no denying that Avalanche has a huge amount of potential, but it’s also worth bearing in mind that, even though its performance puts Bitcoin’s to shame, there are other platforms it has to compete with, not least Cardano, Solana and, pending upgrades, Ethereum. As such, nothing is certain about Avalanche’s future.
As always, we encourage readers to consider whether there is a need to choose between Bitcoin and Avalanche. Realistically, these tokens could end up on uncorrelated trajectories which means they could offer opportunities for diversification.
Whether you choose to invest in Avalanche or Bitcoin - or both - 2023 looks set to be a great year for the market and the current downturn makes now a good time to buy.
How To Invest In AVAX & BTC In 2023
A market downturn is usually seen as an opportune time to buy any cryptocurrency - or any other asset for that matter - in expectation of a turnaround. It should be noted that nothing is guaranteed and no one can accurately predict when a downward trend may reach its nadir, however, if you are looking to buy cryptocurrency, you’ll need a couple of things.
Firstly, you’ll need to get yourself a cryptocurrency wallet. These come in a variety of formats, including hardware and software options. Often, you’ll need to weigh up convenience against security, but it's worth noting that many exchanges and brokers offer wallets as part of their service.
Then of course you’ll need access to an exchange or broker that can offer you access to the cryptocurrency market. We usually recommend eToro, as it is a popular platform with good liquidity. You’ll also find the platform is easy to use and suitable for both experienced and novice traders.
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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
FAQs
Is Avalanche better than Bitcoin?
On paper, Avalanche is a far more advanced project than Bitcoin. Its three-chain architecture offers transaction speeds and scalability that a blockchain from 2009 cannot hope to match. That being said, Bitcoin is still far more valuable in terms of token price and continues to be the yardstick against which all other tokens are measured.
Will Avalanche overtake Bitcoin in 2023?
Every year it seems the discussion over which token will unseat Bitcoin appears renewed. Is Avalanche the project to do it? Perhaps. But there are also plenty of other projects that could be in with a shot at the topspot - including Cardano and Ethereum. Of course, up until this point, no other project has come close to rivalling Bitcoin when it comes to market capitalisation.
Where can I buy Bitcoin?
Bitcoin is widely predicted to see renewed growth across 2023 and market expert Mike Novogratz has even gone as far as to bet on its returning to a trading price of over $35,000 next year. If you’re looking to invest in Bitcoin, then we’d suggest heading over to eToro, as there you’ll find an innovative trading platform that will allow you to buy BTC at the touch of a button.
Which crypto should I buy in 2023?
After 2023 started with a widespread market downturn, the race has began to identify which projects will lead the recovery. Choosing the best cryptocurrency to invest in in 2023 will require careful research. To get you started, we’d suggest checking out our guide to what top ten cryptocurrencies will explode in 2023?
Will Bitcoin become obsolete?
Ever since the emergence of smart contract platforms like Ethereum and Avalanche, people have been suggesting that Bitcoin will simply fade into obscurity. As of 2023, there are few signs of this happening. In fact, just last year Tesla acquired $1bn of BTC for its investment strategy. As such, it appears Bitcoin shouldn’t be counted out just yet.