How to Buy Avalanche (AVAX) – Beginners Guide in 2024

Why Trust Techopedia Crypto

Since its launch in 2020, Avalanche has become one of the leading blockchain projects, promising vastly higher throughput than Ethereum and processing transactions for a fraction of the cost. Best of all, apps built for Ethereum can easily run on Avalanche, creating opportunities for future growth. If you’re considering adding AVAX to your crypto portfolio, here’s how to buy Avalanche.

In this guide, we’ll discuss factors that could make Avalanche an outperforming investment, balancing those points against the project’s challenges. We’ll also review some of the best places to buy AVAX, the fuel token of the Avalanche project. Lastly, we’ll explore ways to earn a yield with AVAX that may play a role in your decision to invest in Avalanche.

Let’s dig in.

How to Buy Avalanche in 4 Simple Steps

The sections below show users how to start trading Avalanche with Kraken – a top cryptocurrency exchange:

  1. Open a Kraken trading account. Visit Kraken and create a new account by using your email and a unique password.
  2. Upload your photo ID. Verify your identity by uploading a Photo ID – such as a passport copy/driver’s license.
  3. Link a funding source. Connect your card or make a bank transfer to fund your account.
  4. Buy AVAX. Buy AVAX directly with a card or buy it with the funds you transfer via bank account.

Best Places to Buy Avalanche – Best AVAX Exchanges

Avalanche has a lot to offer as a competitor to Ethereum and other smart-contract blockchains, but it’s not available on every exchange in every country.

Availability in your market always plays a role in which exchange to choose for trading, but fees, trading tools, and even trustworthiness can weigh heavily on your decision. We will review 4 of the top exchanges that allow investors to trade AVAX.

Here are our top picks:

1. Kraken – Competitive Fees and Unparalleled Security Record 

Founded in 2011, Kraken is one of the oldest crypto exchanges in the world. The platform is well known for its impenetrable security and its user friendly interface.

Appealing to both beginners and expert traders, Kraken provides a secure and feature rich environment to explore over 246 different cryptocurrencies, including Avalanche.

Best Kraken Trading Bots

Kraken accepts a wide range of common payment methods. Users can buy crypto through debit or credit card, wire and bank transfer and third party providers like Apple and Google Pay.

Purchase fees are competitive with 3.75% for card purchases and 1.5% for bank transfers. Trading fees use the maker-taker model  with a structure which rewards higher volume traders with lower fees.

A screenshot of Kraken Pro

As you would expect from the 6th largest crypto exchange (by volume), Kraken provides a wealth of innovative features and products. Alongside spot trading, Kraken users can also trade with up to 5x leverage, earn passive income through staking and also access NFTs.

Kraken is rivalled across the world for its unparalleled security record. With no recorded security breaches since launch, the exchange holds 95% of funds offline in cold storage. By adhering closely with international standards, Kraken proudly hold ISO/IEC 27001:2013 and SOC2, Type 1 accreditation.

Kraken Overview

Trading fees to buy AVAX
  • From 0.25%
Cost to buy $100 worth of AVAX
  • $0.25c + $0.10c for bank transfer
Top Features
  • Unmatched security record
  • International accreditation
  • Wide variety of purchase methods
Supported payment methods Debit/Credit Card, Bank Transfer, Apple & Google Pay

Pros

  • Market leading security policies
  • Proof of Reserves audit
  • Trusted brand

Cons

  • Not all features available in some US states

2. MEXC – Leverages Mega Transaction Matching Technology for Fast Trades

Among the top crypto exchanges we have listed, MEXC stands out due to a combination of factors – ranging from the low trading fees, to low minimum deposits, and the number of trading tools and security protocols the platform offers. 

This crypto platform uses high-performance mega-transaction matching technology – which supports fast and efficient trades. MEXC has the capability to process more than 1.4 million transactions per second. 

MEXC home

The platform also adheres to AML (Anti-Money Laundering) policies – and requires new investors to complete KYC forms while signing up. Existing customers must complete a two-factor authentication before logging in – which adds an additional layer of security on the platform.

The exchange has also set in place anti-DDoS measures, and uses SSL encryption to protect user’s funds. More than half a billion dollars have been kept in cold storage – to protect the funds from any online hacks. 

Offering a vast variety of investment options – MEXC lets you trade over 1,000 cryptos along with Avalanche. Through its swap farming mechanism, investors can also trade 2,000+ crypto pairs by accessing liquidity pools. 

The stand-out feature for MEXC is its trading fees. The platform charges 0% spot trading fees, and futures trading fees starting from only 0.02% per transaction. 

MEXC staking

MEXC will also let investors stake-and-earn high annual yields through its flexible stakings option. The customer support team is accessible 24/7, and investors can visit the website through a desktop, or get the mobile app. 

MEXC supports multiple payment methods – such as credit/debit cards, SEPA transfers, and SWIFT. Investors can start trading with just $5. 

MEXC Overview

Trading fees to buy AVAX
  • 0% spot trading fees
  • 0.02% futures trading fees
Cost to buy $100 worth of AVAX
  • $0 (Spot trading)
  • $0.02 (Futures trading)
Top Features
  • 0% spot trading fees
  • 2FA and SSL encryption
  • Executes 1.4 million transactions per second
  • Swap farming
Supported payment methods Credit/Debit cards, SEPA transfers, SWIFT

Pros

  • 0% spot trading fees
  • Stores $500 million in cold storage
  • Trade over 2,000 crypto pairs
  • Executes more than 1.4 million transactions per second

Cons

  • 2% credit/debit card fee

76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

3. OKX – Trade 300+ Cryptos with this Popular Crypto Exchange 

The next cryptocurrency exchange to use while buying AVAX is OKX – a global platform used by more than 50 million. 

Along with Avalanche, investors can trade more than 300 cryptos on OKX. This platform offers competitive trading fees – starting from just 0.1% per transaction. However, those holding OKB – the native cryptocurrency, can earn even higher trading discounts. 

OKX Crypto Exchange

By holding more than 2,000 OKB tokens, the trading fees can drop to 0.08% per transaction. On OKX, investors can engage in spot trading, and take out futures contracts and options. Leverage trading is also supported on the exchange. 

OKX offers unique features such as Jumpstart – a tool through which investors can get access to brand-new cryptocurrency projects. Other tools include OKX Loan – a platform where one can take out crypto loans. The platform locks your existing crypto holdings as collateral, and offers loans in BTC, ETH, USDT, and other tokens. 

Through the OKX Learn section, investors can increase their crypto knowledge by reading articles and guides. OKX supports multiple payment methods – such as VISA, Mastercard, Apple Pay, and bank transfers. Third-party payment options including Simplex, Advcash, and MoonPay are also supported on OKX. 

OKX Overview

Trading fees to buy AVAX
  • 0.1% spot trading fees
  • 0.08% spot trading fees for OKB token holders
Cost to buy $100 worth of AVAX
  • $0.1 (spot trading fee)
  • $0.08 (spot trading fee for OKB token holders)
Top Features
  • Trading fee discounts
  • OKX Jumpstart
  • Crypto loans
  • Futures and option trading
Supported payment methods Credit/Debit Cards, Bank Transfer, Apple Pay, Simplex, Advcash, MoonPay

Pros

  • Trading discounts for OKB token holders
  • Multiple payment options
  • Offers crypto loans
  • Offers access to new crypto projects

Cons

  • 2.49% credit/debit card fees

4. Binance – Low-Cost Exchange With 350+ Cryptocurrencies and Advanced Trading Tools

Founded in 2017, Binance has grown to become the largest crypto exchange in the world by trading volume. Buy Avalanche or any of over 350 crypto assets available on Binance’s worldwide exchange.

binance dashboard

Since the platform launched, it has generated a user base of more than 160 million. Trading fees are low compared to other well-known exchanges, starting at just 0.1% per transaction. To get further trading discounts, investors can hold $BNB, the native token.

Depending on your BNB holdings, you can earn up top 25% trading discounts.  Novices and beginner traders can access the Binance online Academy – which gives you access to articles and tutorials on cryptos and NFTs.

Through the Binance Earn option, investors can also stake tokens to generate high annual yields.

Binance offers a massive variety of trading tools, including leverage trading, futures, and automated trading bots. All that power adds complexity, however, which may make the exchange’s advanced platform more challenging for newer traders and casual traders.

Binance Overview

Trading fees to buy AVAX
  • Basic trades: 0.50% + spread
  • Advanced Trade: 0.1% maker (limit) orders, 0.1% taker (market) orders
Cost to buy $100 worth of AVAX
  • $0.50 (basic trade with bank transfer)
  • $0.1 (Advanced Trade limit order)
Top Features
  • Transfer AVAX to a custodial wallet
  • Copy trading
  • Trading bots
  • Futures and leverage trading
Supported payment methods Debit Cards, Bank Transfer

Pros

  • Powerful trading options
  • Copy trading
  • Low fees
  • 350+ crypto selection

Cons

  • Difficult to use advanced trading
  • Limited support for US market
  • Not available in Canada

5. Coinbase – Popular Crypto Exchange With Over 250 Cryptocurrencies

As the world’s largest publicly traded exchange, Coinbase may also be the most trusted exchange.

Coinbase offers trading in over 100 countries, including major markets like the UK and the US, and is registered with several regulatory agencies, such as the SEC and FinCEN in the US and the Financial Conduct Authority in the UK.

coinbase dashboard simple trade avax

The Coinbase exchange offers two distinct trading platforms that share balances from your main trading accounts. Coinbase’s new-trader-friendly Simple Trades provide an easy way to buy, sell, or convert cryptocurrencies with just a few clicks.

Advanced or intermediate traders can use Coinbase Advanced, the full-featured trading platform with TradingView charts featuring over 100 indicators and lower trading fees compared to Smple Trades.

In total, Coinbase boasts over 250 cryptocurrencies for trading, making the exchange a solid choice to invest in Avalanche alongside other cryptocurrencies to diversify your portfolio.

Coinbase is intuitive to use, and there are ways to tame trading fees on the platform, including Coinbase Advanced and the new Coinbase One subscription plan.

Coinbase Overview

Trading fees to buy AVAX
  • Simple trades: $0.99 up to $2.99 (trades up to $75), variable fees above $75 + spread
  • Coinbase Advanced: 0.6% maker (limit) orders, 0.8% taker (market) orders
Cost to buy $100 worth of AVAX
  • $2.99 (Simple Trade with bank transfer)
  • $0.60 (Coinbase Advanced limit order)
Top Features
  • Transfer AVAX to a custodial wallet
  • Merchant accounts (accept crypto payments)
  • TradingView charts with 100+ indicators
  • Coinbase One subscription for frequent traders
Supported payment methods PayPal, Debit Cards, Bank Transfer

Pros

  • Beginner-friendly platform
  • Phone support
  • 250+ cryptocurrencies for trading
  • Crypto staking
  • $2 minimum trade

Cons

  • Higher fees for simple trades
  • Default settings can lead to higher trading costs

Offer: Sign up and get up to $200 in crypto¹

Terms: ¹Valid for new users who make a cryptocurrency purchase on Coinbase. Limited while supplies last or Coinbase revokes this incentive at its sole discretion. Coinbase reserves the right to change the terms, eligibility criteria, and payouts for all incentives at any time, for any reason. Void where prohibited or if Coinbase determines that the customer is not eligible for the offer. Terms apply.

How We Selected the Best Places to Buy Avalanche

We considered a wide range of criteria when choosing the best crypto exchanges and platforms to buy AVAX. Cryptocurrencies like BTC and ETH are ubiquitous but some cryptos, like Avalanche, may not be available from all exchanges or in some markets.

Here are the factors we weighed.

Regulation

Exchanges and brokers registered with major regulators may offer a safer place to trade. However, licenses and registrations don’t guarantee safety for account holders. Just as regulated banks can fail, crypto platforms registered with regulators can become insolvent.

Account Safety

We also considered account safety features. Coinbase was a standout in this area. The exchange requires SMS-based (text message) two-factor authentication (2FA) as a default but also sends an email to confirm logins from unknown devices. Users can also upgrade 2FA to use an authenticator app or Passkey, a biometric authentication method that uses a device in your possession.

Trading Tools

Some traders may want more advanced trading tools. We weighed the availability of advanced tools and charting but also considered whether the added functionality impaired the ability to make simple trades.

Ease of Use

Whether you’re just getting started or you trade frequently, ease of use plays a role in how well you can navigate each trade. We gave extra points for platforms that were well laid out and easy to use.

Transferability

The ability to transfer your crypto off the exchange is important to many investors. Platforms, like OKX, allow you to take your AXAX off the exchange for secure storage elsewhere, for use within the Avalanche ecosystem where AVAX is fuel for the network, or to deploy in staking to earn a yield.

Proof of Reserves (PoR)

Kraken offers proof of reserves (with liabilities) to demonstrate that the exchange holds the crypto it shows in your account and that the assets are sufficient to cover its liabilities. We weighed which exchanges offered proof of reserves as the thoroughness of PoR reports. Coinbase plans to offer PoR in the future but relies on public reporting in the interim.

Public Disclosures

Crypto exchanges are often a black box, meaning you have to trust that the exchange is on firm financial footing. Proof of reserves can offer valuable insight, but in most cases, investors don’t know the financial health of the exchange in detail. Coinbase is a standout in this regard, offering financial statements and required SEC disclosures that provide a more detailed understanding of the company’s financial strength.

Trading costs

We looked for exchanges and platforms that offered a cost-effective way to buy Avalanche with trading fees of 1% or lower, excluding spread fees. The stand out is MEXC – which offers 0% spot trading fees.

User Reviews

In addition to our own impressions using each platform, we weighed user reviews from consumer review sites like Trustpilot.

How to Buy Avalance: Trading Basics

The exchanges listed above all offer a simple way to buy Avalanche, but trading costs can be higher when using the simple trading interface. Advanced trading reduces trading costs, often considerably, but comes with a learning curve.

Fortunately, you don’t need to be a trading expert to learn the basics of trading AVAX.

Let’s discuss the largest factors that can affect your trading cost.

Exchange Trading Fees and Broker Commissions

You can buy Avalanche through an exchange like Kraken or through a broker, but you may encounter different names for trading fees.

Exchanges typically refer to trading fees as, well, trading fees, although you might also see them listed as maker fees or taker fees. Maker and taker fees refer to whether you use a limit order or a market order to trade. We’ll explore maker and taker orders in a bit.

Brokers might refer to trading fees as a commission or may just use the term trading fees.

Exchanges vs Brokers

You can buy AVAX through an exchange like Coinbase or a crypto broker. The process is similar: you deposit money on the platform and then buy the token. Under the hood, however, the mechanics are different.

Exchanges create a buying platform that lets traders interact with each other through an order book. When you make a market buy, you’re buying from existing limit orders placed by other traders. Advanced trading platforms let you see the live-action trading as orders in the order book execute.

Brokers don’t provide an order book, and you’re not trading directly with other traders. Instead, the broker is the intermediary. The broker supplies coins and tokens for buy orders and takes the inventory from sell orders.

Pricing between exchanges and brokers is often similar, and in both cases, you can buy or sell crypto assets in exchange for fiat currencies like the USD or GPB.

When using exchanges or brokers, trading fees add to your trading cost, typically deducting a percentage of your trade amount to pay the commission or trading fee. On advanced trading platforms the platform takes a fixed percentage of the trade.

However, on simple trading platforms, fees can get more complicated. Often, you’ll see a tiered fee schedule that depends on the trade amount. For example, using Coinbase’s simple trades, you’ll pay $0.99 for trades below $10.

coinbase simple trade buy avax

Bump the trade amount up to $100, however, and you’ll pay 3% ($2.99) for a bank transfer-funded purchase rather than the 10% you’ll pay for a $10 purchase.

coinbase simple trade avax lower fee

At both levels, trading fees are higher than you’ll pay on the Coinbase Advanced, which charges a maximum of 0.8% for market orders.

If you choose to trade on an advanced platform, you’ll usually see maker and taker fees as well as a schedule based on 30-day trading volume.

Maker Orders

A maker order is a limit order. You place your buy or sell order at a fixed price (the limit). The exchange then puts your order into the order book, where it waits for a match. You’re making a market by providing trading inventory, hence the name.

Taker Orders

A taker order is a market order. Instead of specifying a price, you specify an order quantity or purchase amount to buy or sell at market prices. The exchange then matches your order against the existing limit orders on the exchange. Because you’re taking liquidity off the exchange, market orders earn the “taker” moniker.

Typically, you’ll pay higher fees for taker orders. For example, Coinbase charges 0.6% for maker orders and 0.8% for takers orders. Binance, on the other hand, does not change the fee for maker or taker orders at its base VIP level (traders with less than $1 million in 30-day trading volume), charging a 0.1% trading fee either way.

Spreads

The spread refers to the difference in price between sellers and buyers. If the lowest price sell order for AVAX is $21 and the highest price buy order is $20, then the spread is $1. Typically, a spread is just a penny or two but spreads can be much wider in volatile markets or on exchanges with low trading volume for the trading pair.

Spreads can add to your trading cost by raising your purchase price or reducing your selling price.

Trading platforms also use a spread to lock in a price on basic trades. Coinbase simple trades, Binance instant buy, Gemini, and Kraken all use spreads for basic trades.

coinbase avalanche spread 1%

Spread costs are usually included in the quoted price and may use a fixed rate, like the 1% spread shown above, or a rate the exchange doesn’t specify.

To avoid spread fees, you can use limit orders on an advanced trading platform, a strategy that also offers the lowest trading fees as well.

Slippage

Earlier, we discussed exchange order books. In the screenshot below, you can see the live limit orders on Coinbase and a spread of $0.02 between the highest buy order ($22.25) and the lowest sell order ($22.27).

coinbase order book avax

A market buy order for 100 AVAX would cost $22.27 each and the fees for the trade would be 0.8% on Coinbase. However, if you need to buy 2,000 AVAX and choose a market order, you’d pay several prices.

This is called slippage. The order can’t be filled with the lowest price order which is only about 334 AVAX. The balance of the order slips into the next open limit orders until your order is filled.

  • 334.658 AXAX at $22.27
  • 467.425 AVAX at $22.28
  • 1064.186 AVAX at $22.29
  • The balance at $22.30

Slippage brings concerns with sell orders as well, with larger sell orders slipping further into the order book (and lower in price) to fill the order.

The combination of slippage and spreads can make it costlier to trade with market orders, especially when trading larger amounts.

Non-Trading Fees

Lastly, it’s important to be aware of non-trading fees that can affect your overall cost of trading.

  • Deposit fees: In many cases, you won’t pay a deposit fee for bank transfer-funded transactions. However, some regions, currencies, or funding methods may pay a deposit fee. Check the fine print before confirming your deposit.
  • Processing fees: Platforms that support PayPal or debit cards may add a processing fee. In the example below, Gemini adds a 2.5% processing fee. Debit cards and credit cards often bring similar fees, which can add as much as 4.0% to your trading costs.

gemini paypal processing fee

  • Withdrawal fees: Some platforms charge a withdrawal fee for fiat withdrawals, such as USD or GPB. However, a more common withdrawal fee occurs when you withdraw over a crypto network to a self-custody wallet. Typically, the exchange charges a fee that approximates the actual fee charged by the network.
  • Inactivity fees: While rare, you may encounter inactivity fees charged after a set period of inactivity—the standard is 12 months, but some are less some are more.
  • Conversion fees: trading platforms may use a base currency, converting other currencies to the base currency used on the platform. MEXC, for instance, uses the stablecoin USDT as its base currency, and when making a deposit users are simply buying this cryptocurrency and 3rd party deposit methods often charge currency conversion fees.

What is Avalanche, and How Does It Work?

Avalanche is a public ledger and network based on a directed acyclic graph (DAG). Let’s break that down.

Blockchains like Bitcoin and Ethereum made crypto a household term and introduced us to blockchains. In a blockchain, each block contains transactions and references the prior block, thereby forming a chain of blocks.

A DAG, like Avalanche, serves a similar purpose but approaches transaction storage in a different way. Instead of making a chain, a DAG groups transactions in blocks that aren’t directly linear but are still ordered according to time. Think of it as a wider blockchain rather than one that marches in a single file.

How DAGs Order Transactions

Blockchains are orderly by nature. Transactions go into blocks and the blocks are linked, one after the next. This orderly structure makes blockchains easier to understand, but often it also makes them slower.

A directed acyclic graph (DAG) also uses blocks, or vertices in the cases of Avalanche, but the ordering of these groups of transactions is more efficient. Rather than waiting to process the next block, DAGs can process groups of transactions simultaneously. The end result is a chain that doesn’t quite look like a chain. Blocks or vertices can occur next to each other instead of just in a line.

DAGs look like a holiday parade, filling the city street; blockchains look like a line at a bridge toll.

Avalanche uses both a DAG and blockchains, with the method of ordering transactions differing based on which of the three Avalanche chains are used. More on that in just a bit.

Emin Gün Sirer, a Turkish computer scientist and professor at Cornell, founded AVA Labs, the company that launched the Avalanche network in 2021. The project was funded in part by a seed sale of AVAX tokens in 2019. Emin is also known for discovering potential flaws in the Bitcoin consensus protocol related to selfish mining as well as highlighting risks to The DAO, an early decentralized autonomous organization on the Ethereum network, which was later hacked and drained of its funds.

Emin was also part of a trio that conceived Karma, a proof-of-work cryptocurrency that predated Bitcoin by several years.

Today, the Avalanche network uses the lessons learned from flaws in other networks to build what the project believes is a better solution for future growth.

How Does Avalanche Work?

Avalanche is really three chains rather than one: X-Chain, C-Chain, and P-Chain.

X-Chain

The X-Chain (exchange chain) uses a DAG structure and is responsible for the creation management and transactions of tokens. The throughput for the X-chain is 4,500 transactions per second (TPS).

C-Chain

Avalanche’s C-Chain (contract chain) is used for smart contracts, computer programs that live on the blockchain. The chain is a copy of the Ethereum virtual machine, meaning projects from Ethereum or compatible networks can move to Avalanche easily. The C-chain uses the Snowman protocol as its consensus mechanism to confirm transactions. Snowman requires each node to ask a small number of other nodes to vote on the validity of transactions. This micro-consensus (20 nodes with a 14-node quorum) makes Snowman capable of 1,500 TPS, much faster than competing networks like Ethereum, which currently averages less than 22 TPS.

Popular decentralized finance (DeFi) applications like Aave (lending) and Curve (decentralized exchange) are already live on Avalanche C-Chain.

P-Chain

A third chain, called the P-Chain (platform chain), also uses Snowman and allows subnets. A subnet on Avalanche is a hosted chain that can be private or public and customized to the needs of each project.

Imagine that a game company wanted to launch its games on web3. Each game could have its own subnet (dedicated blockchain), keeping transactions separate from other chains and isolating transaction costs on each chain. This solves problems like what occurred with CryptoKitties, a popular Ethereum-network game that brought the entire network to its knees as the CryptoKitty frenzy devoured Ethereum’s bandwidth.

Avalanche’s P-Chain also coordinates validators and is used for staking.

The Role of AVAX in the Avalanche Network

Much like Ether (ETH) is the fuel of the Ethereum network, AVAX is the fuel for Avalanche.

The Avalanche network uses proof of stake to validate transactions. Each validator node requires 2,000 AVAX for solo staking. Avalanche also supports delegated staking in which token holders with 25 AVAX can delegate their AVAX to a validator. In both cases, staking pays rewards for securing the network, but delegated staking puts these rewards within reach for smaller AVAX balances.

Subnets on the P-chain use AVAX to validate transactions and as a currency for transactions. With an untold number of subnets coming online in the future, demand for AVAX will continue to grow as the network and subnets attract more users.

Staking rewards and network fees are paid in AVAX. Additionally, AVAX serves as the governance token for Avalanche, allowing token holders to vote on changes or initiatives for the project.

Uses for Avalanche

The Avalanche network is already home to several well-known projects with more in development.

  • Citibank: Citi launched a forex platform on Avalanche.
  • Xbox and PS5: A planned Avalanche subnet will host GUNZ, a blockchain-based shooter game.
  • GMX: A leading decentralized perpetual futures exchange lets you bet on the future price of top crypto assets and earn staggering yields powered by Avalanche.
  • Castle Crush: Wildlife Studios’ popular game lets you trade non-fungible tokens (NFTs) with 1.4 million other active monthly players.:
  • Pocket Worlds: Experience a metaverse built by its users, and they’re building it on an Avalanche subnet.
  • Staking: Stake your AVAX and secure the network for staking rewards yields of nearly 9% (paid in AVAX).

Avalanche’s ecosystem continues to grow, with subnets and scalability at the core of the project’s growth. The ability to move and tokenize assets across subnets suggests room for exponential growth. Avalanche also provides an innovative way to bridge Bitcoin to Avalanche without an intermediary, as is required with wrapped Bitcoin (WBTC). You can also bridge Ethereum to Avalanche without using an exchange.

Avalanche (AVAX) Potential Price Risks

The Avalanche network improves upon many aspects of existing blockchains, but there are still risks to consider before you invest in Avalanche, which is why some investors have turned to AVAX price predictions for market insights.

AVAX has a maximum supply of 720 million. Half of this amount is set aside for staking rewards. 20% of the supply was given to the team and the Avalanche Foundation. 127 million tokens were presold to investors to bootstrap development. All those tokens in the wild — many of which have no real cost associated with them — could create a headwind for AVAX’s price.

Avalanche’s Burn Mechanism

Although Avalanche has a maximum supply of 720 million and over half of its supply is yet to be distributed, this is only part of the story.

AVAX is the fuel of the Avalanche network and its subnets. The AVAX token pays for transactions (network processing power) and also serves as a way to secure the network through proof of stake consensus, much like vouching for someone.

But Avalanche currently burns 100% of the fees from the network, meaning the tokens are sent to an unrecoverable address. This mechanism makes Avalanche (AVAX) deflationary in the long term, even if the short-term supply is inflationary.

Additionally but related, The Avalanche Foundation, a non-profit organization tasked with growing the Avalanche network, is spearheading two initiatives:

  • $290 million incentive program to promote the growth of subnets, which Avalanche calls an internet of subnets
  • $180 million incentive program to promote DeFi on Avalanche

AVAX token sales are expected to fund the programs, creating selling pressure for AVAX.

Also, consider regulatory risks before making an investment in Avalanche. Some exchanges don’t offer token in certain area, such as the US, due to regulatory concerns. An exchange that offers a given cryptocurrency might stop supporting that asset, creating a rush for the exits.

Is Avalanche a Good Investment?

Avalanche’s current circulating supply of about 355 million AVAX leaves about half the supply yet to be distributed. At a current market capitalization of nearly $7.5 billion, the project is valued below Cardano and Solana.

A fully diluted market capitalization would put the value of Avalanche at close to $15 billion at current prices, about 85% below its all-time high in 2021.

Arguably, Avalanche has more to offer now than it did during the 2021 bull market, but that’s no guarantee we’ll see those prices again. Layer 2 networks like Polygon and Arbitrum continue to grow, providing a lower-cost way to transact on Ethereum or Ethereum-compatible networks.

And Avalanche doesn’t exist in a vacuum; other projects are working on similar tech. Polygon SuperNets mimic the functionality of Avalanche subnets, possibly taking market share from Avalanche as companies and projects look for turnkey blockchains.

Total value locked (TVL) measures the smart contract activity on each blockchain. Avalanche and Polygon share similar levels of activity, as seen below.

tvl comparison avalanche polygon

As a caveat, AVAX staking pays you to wait and see what happens if you choose to stake and support the network. Current yields are close to 9%, although closer to 3% if you adjust for token inflation while the AVAX supply is distributed.

What is the Cheapest Way to Buy Avalanche?

The cheapest way to buy AVAX among the exchanges we covered above is through Binance.com. You’ll pay 0.1% for limit or market orders, with an additional 25% discount if you pay your trading fees with BNB.

However, the cheapest way to buy Avalanche might not be the best way to buy Avalanche for all traders. For traders in many parts of the world, including the US, Coinbase or Kraken may make better choices.

Binance.com isn’t available to US traders and the Binance.US exchange doesn’t support USD deposits. In other areas, Binance’s Advanced Trade might be more exchange than many traders need. Yes, it’s powerful, but it’s also more complicated to use compared to Coinbase, Kraken, and Gemini.

What is the Best Avalanche Wallet?

Avalanche smart contracts are EVM-compatible, which means you can use the popular MetaMask crypto wallet. To use MetaMask with Avalanche, you can add support for the network with a few clicks from within your wallet. MetaMask is a good fit if you already use other EVM networks like Ethereum, Abitrum, or Optimism. Coinbase Wallet also supports Avalanche.

As an alternative, you can use the Avalanche Wallet, the official wallet for the Avalanche network.

avalanche wallet

If you’re considering staking your AVAX, Avalanche Wallet has good tutorial support, including staking with a Ledger hardware wallet paired to the Avalanche Wallet.

How to Buy Avalanche – Step by Step Tutorial

For this tutorial, we’ll use Kraken. The Kraken exchange, as discussed above, offers direct AVAX purchases with a card.

Here’s how you can purchase AVAX on Kraken, in four simple steps:

Step 1: Register an Account

Head over to the Kraken website and create a new account. Users need to enter their email address and use a unique password.

kraken landing page

Step 2. Verify Your ID

To comply with KYC (Know Your Customer) regulations in many jurisdictions, exchanges like Kraken are required to verify your identity. Upload a valid photo ID like a driver’s license, national ID card, or passport.

Step 3. Link a Funding Source

Kraken supports credit/debit cards, SWIFT, and SEPA transfers as payment options. Pick your preferred payment option, and enter the amount of funds you wish to deposit on the account.

After confirming the transaction, your funds will display on the account. Cards are used for direct crypto purchases.

Step 4. Buy AVAX

Once your Kraken account is funded, you can start trading AVAX and over 250 cryptos. Search for the crypto asset on the Kraken navigation bar.

If you want to buy AVAX fast, use a card. Visit the “Explore” tab and find AVAX. Select “Buy”.

kraken avax purchase

Select the order type: buy now, buy at a certain price, make recurring purchases. Review your order and confirm it.

Conclusion

Avalanche competes in a crowded field of blockchain platforms but benefits from its ability to improve upon older blockchain technology like Bitcoin and Ethereum. Support for subnets that allow an “internet of blockchains” and interoperability between subnets give Avalanche a unique value proposition that attracts enterprise users.

For investors, AVAX offers a way to earn a yield or earn through future price gains as demand grows for a limited supply token. When you’re ready to invest in AVAX, Kraken offers easy onboarding and robust security.

References

FAQs

How do I Buy Avalanche?

What is the best place to buy AVAX?

Can I buy Avalanche with PayPal?

Can I buy AVAX with a credit card?

How does Avalanche staking work?

Eric Huffman
Technology Specialist
Eric Huffman
Technology Specialist

Eric Huffman has a diverse background ranging from business management to insurance and personal finance. In recent years, Eric’s interest in financial topics and making personal finance accessible has led to a focus on cryptocurrency topics. Eric is a specialist in crypto, blockchain, and finance guides that make these important topics easier to understand. His publications include Milk Road, Benzinga, CryptoNews.com, Motor Trend, CoverWallet, and more. Always learning, Eric holds several crypto and finance-related certifications, including certifications from the Blockchain Council, Duke University, and SUNY. When he’s not writing, you can find Eric teaching karate or exploring the woods.

',a='';if(l){t=t.replace('data-lazy-','');t=t.replace('loading="lazy"','');t=t.replace(/