What happened
Token for the avalanche (CRYPTO: AVAX) The blockchain network soars Thursday afternoon, posting a 24-hour gain of 25.4% at 3:30 p.m. ET. The jump started when financial technology company Circle said the USD coin (CRYPTO: USDC) now is available on the Avalanche network and provides blockchain smart contracts with access to an unprecedented amount of liquidity.
so what
Avalanche is the 10th largest cryptocurrency by market value and is now valued at $ 25.2 billion. USD Coin is even bigger with a market capitalization of $ 41.7 billion, making it the seventh largest digital currency (and the second largest stablecoin). The integration of a respected stablecoin will reduce transaction fees in the Avalanche network that was previously relied on ether (CRYPTO: ETH) Transactions to pay fees. Ethereum’s transactions are notoriously expensive and slow, so the USD coin alternative is a big upgrade.
Image source: Getty Images.
What now
This announcement marks a turning point for Avalanche, but just another feather in the cap for the USD Coin project. Avalanche is the seventh blockchain to integrate this coin as an alternative billing mechanism, and the partner list reads like a who’s who of the smart contract blockchain market. USD Coin didn’t move on the news as it should be for a stablecoin whose value is tied directly to the US dollar. However, the deal added to the market value of the company behind the USD coin system.
USD Coin’s robust partner list is preparing the blockchain manager Circle for a high-stakes IPO in the near future. The company has signed a contract with a special purpose vehicle (SPAC). Concord acquisition (NYSE: CND) in July with the aim of entering the American stock market shortly under the new ticker symbol CRCL. Growth investor Cathie Wood’s ARK Investment Management advised on this transaction, which had an initial enterprise value of approximately $ 4.5 billion. We don’t have a set date for Circle’s SPAC transaction to close.
USD Coin is Circle’s primary business asset. So what is good for the stablecoin should also be good for its manager. Concord Acquisition shares turned a 1.7% decline into a 2.3% gain on the news of the Avalanche partnership.
This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all reflect critically about investing and make decisions that will help us get smarter, happier, and richer.
Comments are closed.