Crypto : Avalanche reinvents itself, could the partnership with JP Morgan change everything ?

In a rapidly evolving crypto sector, blockchain projects face a significant challenge: maintaining user interest and finding concrete applications in a market often dominated by speculation. Avalanche, a cutting-edge network initially designed to compete with Ethereum thanks to its speed and low fees, is no exception to this reality. In 2024, the project faces a marked decline in its activity, particularly on its main chain, the C-Chain. Nevertheless, Avalanche refuses to follow the downward trend. The network is undergoing a bold strategic shift, betting on institutional adoption.

The decline in activity on Avalanche : a warning sign ?

In 2024, the Avalanche network experienced a notable decrease in activity on the C-Chain, its main chain dedicated to smart contracts. The number of active addresses fell to 31,000, a level not reached since October 2023. This stagnation reflects a general trend in the crypto industry, where many projects struggle to retain user interest, especially in a bearish market climate. Thus, this decrease in activity, visible through the drop in transactions and active addresses, highlights the challenges faced by Avalanche and other blockchains in maintaining sustainable engagement.

The reasons behind this situation are multiple. In addition to the overall economic climate, Avalanche faces increased competition from other blockchain solutions, such as Ethereum’s Layer 2s and other Layer 1s like Solana. These solutions also offer attractive alternatives in terms of cost and performance. The decline in speculative activities confirms the importance for Avalanche to diversify and find concrete use cases beyond traditional crypto trading.

Institutional Adoption : a winning bet for Avalanche ?

To address these challenges, Avalanche has decided to explore new horizons. The blockchain has chosen to focus on institutional adoption. In December 2023, a strategic partnership with JP Morgan and Apollo for the tokenization of real assets on the blockchain was concluded by the network. “This partnership demonstrates the potential of the Avalanche blockchain to offer reliable and scalable solutions for large companies,” said Avalanche officials in a statement. Thus, this demonstrates the platform’s ability to position itself as a key player for financial institutions looking to leverage blockchain technology for concrete use cases like decentralized finance and asset tokenization.

This strategic repositioning could well be one of Avalanche’s answers to its current difficulties. While retail investors hesitate more, the entry of institutions could give the platform a new impetus, particularly through applications such as crypto management, securities transfer, or financial process optimization. However, the success of this transition will largely depend on Avalanche’s ability to maintain the trust of institutions and prove that its technology meets the regulatory and operational requirements of these new players.

Through institutional adoption, Avalanche hopes to revitalize its ecosystem and prove the viability of its solutions in an ever-evolving market. If this bet pays off, it could not only revive activity on the network but also position Avalanche as a leader in the convergence between blockchain and traditional finance.