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Avalanche (AVAX) is a relatively new cryptocurrency. Although it only came into being in 2020, it has gained huge popularity as an alternative for Ethereum developers. Avalanche has become one of the largest cryptocurrencies, with a market capitalization of around $6.7 billion. Here’s what you need to know about buying AVAX.

Avalanche in the digital economy

Ethereum has some notable drawbacks, such as high gas fees and slow transaction speeds. Avalanche was created as a highly scalable blockchain that solves these problems. AVAX bills itself as “the blockchain industry’s fastest smart chain contract platform”.

While Avalanche offers many admirable features, crypto users embrace it due to its nimble structure.

AVAX supports three blockchains. One, the contract chain (C-Chain), is ideal for smart contracts, such as non-fungible tokens (NFTs) and decentralized applications (DApps). The C-Chain is compatible with the Ethereum virtual machine, which allows Ethereum developers to use it to deploy applications.

Users pay subscription fees to AVAX to operate on the Avalanche blockchain, although the costs are significantly lower than Ethereum’s gas fees. Gas refers to the amount of ETH needed to complete a transaction on the Ethereum blockchain.

Another fact about Avalanche: AVAX is a limited supply token with a maximum of 720 million tokens. Currently, there are over 270 million tokens in circulation.

You can also stake your AVAX since Avalanche works on a proof-of-stake consensus mechanism.

Where can I buy AVAX?

To buy AVAX, you need to buy cryptocurrency through an exchange that includes AVAX tokens. Here are some exchanges where you can exchange US dollars for AVAX:

With Coinbase and Binance.US, you can buy AVAX with US dollars or another fiat currency or exchange other supported cryptocurrencies for AVAX tokens.

Note the terminology of “trading pairs”, such as AVAX to USD Coin (USDC). In the case of AVAX/USDC, AVAX can be converted into USDC, a stablecoin whose value is pegged to the US dollar. Here are some exchanges that associate AVAX with USDC:

Another option is to buy and trade Avalanche with Tether (USDT), another popular stablecoin. Exchanges that pair AVAX with USDT include Binance.US and KuCoin, to name a few.

How to buy AVAX

If you decide to invest in Avalanche, you can buy AVAX tokens in just three steps:

1. Choose a crypto exchange

Before you can buy AVAX – or any form of cryptocurrency – you must open an account with a crypto exchange. Crypto exchanges facilitate trading on their platforms, making it easy to buy and sell tokens.

Some crypto exchanges are designed for novice investors, with very simple interfaces. Others are for more advanced traders and include features like crypto staking. The best crypto exchanges offer various cryptocurrencies and low trading fees.

2. Buy AVAX

Once you have opened an account and selected a payment method, you can make your first investment in AVAX.

Enter the exchange’s trading platform and enter Avalanche’s ticker symbol – AVAX – and the amount you wish to invest. You can usually enter a number of tokens, or you can choose to enter a dollar amount to invest.

You can also decide on an order type; market orders are processed immediately, while limit orders are executed only when the token reaches a certain price. A limit order can be a good idea if you expect the price to change significantly in the near future.

If you place a market order, the order will be processed immediately and you will be a proud AVAX investor.

Although you can buy AVAX with a credit card, we strongly advise against it. This is because credit card transaction fees on crypto exchanges are often high. If you use a credit card to buy cryptocurrency, it will generally count as a cash advance, subject to a higher interest rate than what you pay on regular fees.

3. Store your AVAX

With cryptocurrencies, you have to think about storage to protect your investment. AVAX can be stored in several different ways:

  • Hardware wallets. A hardware wallet is a physical device that stores the private keys to your crypto assets. They look like flash drives and are considered cold storage – they are not connected to any network or the internet. Popular hardware wallets include Trezor and Ledger. In fact, the Ledger Nano X lets you connect to any third-party wallet that supports Avalanche.
  • Paper wallets. Paper wallets are exactly what they sound like: they are printed pieces of paper with your private and public keys on them. Paper wallets are less popular now that more and more people are investing in cryptocurrency, as there is always the risk of losing the paper and never being able to access your investments.
  • Software wallets. Software wallets are applications or programs downloaded to your device to store your crypto assets. They are often called “hot wallet”. Although they are not as secure as a “cold wallet”, the assets of software wallets are easily accessible when you want to exchange your holdings. The Avalanche Network also has its own non-custodial Avalanche wallet to store Avalanche assets. You will need to enter your keystore file, private key, and recovery phase for this web wallet.
  • Crypto exchanges. Some crypto exchanges, such as Crypto.com, allow you to store your crypto on their platforms. For example, the Crypto.com DeFi wallet will allow you to store Avalanche-C (AVAX).

What you can buy with AVAX

You can use AVAX to pay transaction fees or as currency within the Avalanche Network. Alternatively, you can simply speculate on the price of the token by buying and selling AVAX with other crypto investors.

AVAX’s price, at the time of writing, was up around 28% year-over-year, while other cryptocurrencies, such as Bitcoin (BTC) and Ethereum ( ETH), were down year over year.

If you decide to invest in Avalanche, keep in mind that the price can fluctuate wildly. For this reason, financial experts recommend that crypto investments should only be a small part of your overall investment portfolio.