Binance Coin Surge Elevates Token to Ranks of Crypto Titans
Binance Coin has strengthened its position as one of the largest cryptocurrencies in the world after rallying 53% over the past seven days to third place behind Bitcoin and Ether.
The digital coin BNB issued by the world's largest crypto exchange now has a market capitalization of $ 87 billion, according to CoinGecko.com. This makes it the third most important cryptocurrency after Bitcoin with $ 1.1 trillion and ether with $ 252 billion. The token has been trading with Tether and other coins for weeks, underscoring the increasing importance of BNB in the crypto ecosystem.
Coinbase Global Inc.'s public debut this week is one reason for the recent jump. The digital coins of other cryptocurrency exchanges were also at risk. In the past 24 hours, the exchange coin Uniswap rose 14%, and the token for the FTX exchange rose in the past few days as well. Coinbase, the largest US crypto exchange, will be the first major cryptocurrency company to go public with an estimated value of around $ 100 billion.
"The BNB had yet to repeat the price increases of Bitcoin and Ether from last year, so some positive attitudes are aligned in order to achieve an outperformance," said Antoni Trenchev, co-founder of the crypto-lender Nexo, which has been a long-time BNB. He added that some predictions for the coin suggest a price of nearly $ 1,000.
The NBB traded at $ 562.42 as of 2:51 p.m. Little has changed in Hong Kong in the past 24 hours on Tuesday, according to CoinGecko.com.
Aside from the broader crypto craze, the BNB has a lot to offer. The token is widely used for trading on Binance, where it is a kind of loyalty system to lower the prices of trades. The exchange's trading volume has exploded as Bitcoin hits new highs. In addition, Binance launched the so-called Smart Chain as early as August 2020 - a competitor of Ethereum that can be used for applications such as decentralized financing (peer-to-peer lending, loans and trading) - but with lower transaction fees. A number of DeFi apps that previously only ran on Ethereum, such as the 1-inch exchange aggregator, now support Binance Smart Chain.
The Binance Smart Chain uses BNBs for transaction fees and other functions. The all-time high transaction volume of 5 million transactions was higher than Ethereum's 1.3 million. Binance has set up a $ 100 million accelerator fund to bring projects up to date on the blockchain. More than 300 projects have already been set up on the Binance Smart Chain, including a distributed exchange called PancakeSwap. Users have locked around $ 31 billion on the Binance Smart Chain. According to DeFi Pulse, funds locked in DeFi on Ethereum amount to $ 52 billion.
"BSC is getting a lot of traction," said Sam Bankman-Fried, chairman of the board of rival FTX Exchange, in which Binance has a minority stake. “It's worth noting that ETH's traction was only ever about 50,000 users, even though there are billions of dollars in capital. I don't think it's going to replace ETH - it's too centralized - but I think it really seriously affected the ETH dominance narrative. "
According to Binance, the smart chain is not centralized and does not belong to the exchange, but is managed by the community. Questions about Binance's influence make some crypto insiders pause. The Commodity Futures Trading Commission is investigating Binance over concerns that have allowed Americans to place bets in violation of US regulations.
"In a time of relative peace, centralized chains like BSC can effectively win favor and exploitation, especially as Ethereum fees become a rake that rewards everyone but the richest users," said Nic Carter, Co-Founder of Coin Metrics. “However, I suspect that the more central chains that are effectively managed by companies will prove fragile in the long run. I don't think BSC can survive even a moderate state-level exam should it occur. "
Binance says it complies with all regulations and is constantly working to improve its compliance.
(Updates with comment in fourth paragraph.)
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