BNB Outshines Major Cryptos in 2023
If you’re impressed by Bitcoin’s performance this year, you may want to take a closer look at BNB, the third-largest cryptocurrency globally. This token, native to the Binance exchange, has experienced a significant rise of 129% over the past year, outpacing Bitcoin’s 97% and Ethereum’s 84% gains during the same period. The increase in BNB’s value has been particularly striking in the last month, with the cryptocurrency appreciating by 29% since October began. This surge has contributed to a market cap increase of over $41.7 billion, as reported by CoinMarketCap.
Factors Behind BNB’s Surge
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Increased Adoption
The Binance platform has seen substantial growth in the past year, fueled by a resurgence in cryptocurrency trading that has brought several coins to new all-time highs. As the leading crypto exchange by trading volume, Binance has reached 290 million users and recorded $14.8 billion in inflows in the last quarter. Additionally, activity on the BNB Chain has surged, with network fees reaching $5.5 million in just 24 hours leading up to October 8, according to DeFiLlama. -
Introduction of Aster by Changpeng Zhao
In late September, Changpeng Zhao, the ex-CEO of Binance, introduced Aster, a multi-chain decentralized exchange aimed at competing with Hyperliquid, a prominent platform for futures trading. Aster quickly gained traction, surpassing other decentralized exchanges in trading volume for a brief period last month. However, DeFiLlama has since removed Aster from its listings due to concerns regarding the integrity of its data. Zack Shapiro, a digital assets policy expert, noted that the attention garnered by Aster may have also contributed to BNB’s recent popularity. - Increasing Interest from Crypto Treasuries
Another factor driving BNB’s price is the growing appetite from crypto treasuries—companies that accumulate substantial amounts of cryptocurrency on their balance sheets. For instance, CEA Industries, a vape manufacturer, announced on Tuesday that it holds $611 million worth of BNB. Earlier this summer, the company had indicated plans to create a BNB treasury. Additionally, B Strategy, a digital assets investment firm, revealed in August its collaboration with Yzi Labs to establish a $1 billion Binance Coin treasury.
Market Skepticism Surrounding BNB’s Rally
Despite the impressive figures, some skeptics express doubts regarding the sustainability of BNB’s rally. Social media discussions among crypto enthusiasts have raised concerns about potential market manipulation behind the token’s rapid price increase. Binance has not provided a comment on these allegations. However, Shapiro contends that worries about manipulation may be less relevant to the majority of investors who are flocking to the token. He suggests that BNB’s rise can be attributed to the overall market exuberance, as both speculative assets and traditional safe-haven investments are gaining traction as the year draws to a close.
Shapiro elaborated, stating, "I think this is people chasing a hot ball of money," indicating that much of BNB’s ascent could be linked to speculation. He further mentioned that the current market cycle is characterized by investors seeking out the next appealing asset to purchase. The crypto landscape has been thriving since President Donald Trump’s re-election campaign, where he positioned himself as a supporter of cryptocurrency, promising a more favorable regulatory environment. CoinMarketCap reports that the total valuation of the cryptocurrency market has surged by nearly $1 trillion this year, with major coins achieving a series of record highs. As for Bitcoin, the leading cryptocurrency was trading around $124,000 on Wednesday, slightly down from its recent all-time high above $125,000.
