In 2023, not a single top cryptocurrency is in the red. In fact, quite the contrary. Many top cryptocurrencies are up triple-digit percentages for the year. For example, Bitcoin (BTC 0.95%) is up more than 107%, while Solana (SOL 5.48%) is up more than 650%.
That's the good news. The bad news is that, even with remarkable rallies this year, many top cryptocurrencies are still down 70% or more from their all-time highs from just two years ago. Two bargain-priced cryptos that particularly stand out right now are Avalanche (AVAX 3.17%) and Chainlink (LINK 2.05%).
Avalanche
During the last crypto bull market rally, Avalanche soared to a high of $146. Given today's price of just $40, that means Avalanche is trading more than 70% below its peak.
That just seems like too much of a discount, given that Avalanche is one of the top competitors to Ethereum (ETH 2.10%). In fact, Avalanche has been called an "Ethereum killer," due to the fact that it is simply so much faster and cheaper to use than Ethereum. Just like Ethereum, Avalanche offers everything that you'd expect from a Layer-1 blockchain, including non-fungible tokens (NFTs), decentralized finance (DeFi), blockchain gaming, and Web3 applications.
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The latest buzz around Avalanche involves the launch of a new type of crypto collectible. In many ways, these collectibles are similar to the highly popular Bitcoin Ordinals, which in turn are based on the concept of traditional NFTs. To give you an idea of how popular they are, 95% of all transactions on the Avalanche blockchain are now related to these crypto collectibles. Depending on your view of NFTs, that's either exciting or terrifying.
During the past 30 days, Avalanche is up more than 90%, and that potentially sets the stage for a strong start to 2024. From my perspective, one major reason for Avalanche's sharp rally at year-end has to do with Solana's recent blistering performance. Since Solana and Avalanche are very similar in what they do (both are direct rivals to Ethereum), and Solana is up more than 650% this year, many investors may now be expecting the same type of performance from Avalanche. That could lead to a big influx of investor money next year.
Chainlink
Chainlink is another crypto that soared to popularity during the last crypto bull market rally. Chainlink eventually hit a high of $53 back in 2021. At today's current price of $15, that means Chainlink is now trading at a discount of more than 70%.
Chainlink is unique in that it is a decentralized blockchain data oracle. Its primary purpose is to serve up data to smart contracts, which are small pieces of self-executable computer code. That might sound like a lot of crypto mumbo-jumbo, but what it really means in practical terms is that Chainlink is at the very center of how data is exchanged in the blockchain world. The most immediate application is in the world of decentralized finance, where smart contracts require constant access to real-time data.
That explains why Chainlink skyrocketed in value during the last boom. In the summer of 2020, DeFi was all the rage, and many people thought decentralized finance would eventually take over from traditional finance (the world of Wall Street and financial intermediaries). In many ways, Chainlink benefited from all the buzz and hype around DeFi.
In 2023, Chainlink is back with another big idea, and it involves artificial intelligence (AI). In May, Chainlink outlined all the ways that integration of AI and blockchain would make a lot of sense. Some of the ideas, quite frankly, weren't all that sexy. "Authenticity verification" is highly important for blockchain users, but it's also not the type of thing you'd probably bring up at a holiday party. But if Chainlink can come up with a really big idea -- a sort of "killer app" for blockchain and AI -- then it could soar in the years ahead.
How risky is 70%?
Just keep in mind that both Avalanche and Chainlink are highly speculative investments in a highly volatile crypto market. We've already seen them soar once before later collapsing. So the same thing could happen again. It's absolutely essential to do your due diligence on these two cryptos. If you believe that the market is efficient, then there must be a very good reason both are trading at steep 70% discounts.
That said, I'm the type of person who enjoys poking through the "final markdown" bins in stores, so I'm intrigued by the deep discounts on these cryptos. Heading into 2024, both look like cryptos that could pop.
