Avalon Labs (AVL) (AVL) Price Prediction

Deep Dive

1. Deflationary Tokenomics (Bullish Impact)

Overview: Avalon Labs burned 80M AVL tokens (~44% of supply) on 9 June 2025, reducing circulating supply to 161.68M. This mirrors historical patterns like BNB burns, which typically create scarcity-driven price support.

What this means: Reduced supply (from 161.68M to ~81M post-burn) could amplify price sensitivity to demand spikes. However, vesting unlocks (48-month linear releases for 28% of supply) may offset this by 2026 if holders sell.

2. Bitcoin DeFi Expansion (Mixed Impact)

Overview: Avalon’s upcoming AI-powered RWA product (announced 15 July 2025) merges Bitcoin collateralization with real-world yield opportunities. The platform also secured a $2B institutional credit line in June.

What this means: Success depends on Bitcoin’s price stability – a drop below key levels could trigger liquidations in its overcollateralized loans ($1.2B disbursed). Conversely, institutional adoption of its Bitcoin-backed stablecoin (USDa) might drive AVL utility.

3. Regulatory Tailwinds (Bullish Catalyst)

Overview: Avalon’s advocacy for the Blockchain Regulatory Certainty Act (BRCA) aims to exempt non-custodial services from money transmitter laws. Partnering with Bitcoin Policy Institute signals legislative influence.

What this means: Regulatory clarity could accelerate institutional participation in Avalon’s lending/stablecoin products. A favorable BRCA outcome by late 2025 may reduce compliance costs 15-20%, per industry estimates.

Conclusion

AVL’s medium-term outlook leans bullish due to enforced scarcity and Bitcoin-centric product launches, but faces dilution risks from vesting unlocks post-2026. Regulatory progress could amplify institutional inflows, while Bitcoin volatility remains a swing factor.

Watch: Can USDa stablecoin adoption outpace competitor offerings like Stacks’ sBTC?