OpinionsBlogs

BNB is the 2nd-largest altcoin by market cap after ETH, and its growth continues. What’s going on?

Igor Grigorchenko

News editor

Feb 2, 2023 at 05:03

BNB, the native cryptocurrency of Binance, has been showing remarkable trading dynamics in recent months. At the moment, this asset is surpassed only by Ethereum in terms of capitalization among altcoins. In our analytics, we have collected the latest statistics on its price action and we also give the reasons for such strong growth.

 

Symbiosis with Binance is a recipe for success

In our recent article, we summed up the results of crypto winter, noting that despite the severe fall in cryptocurrency prices and the bankruptcies of many companies, there are also clear winners in the crypto market in 2022. One obvious winner was Binance. After the collapse of FTX, the market share of this crypto exchange has grown to unbelievable sizes. Currently, Binance has a 92% share of the spot market and a 61% share of the crypto derivatives market.

“No matter how you look at it in terms of trading activity, Binance is the crypto market,” Arcane Research wrote.

The brand new newsletter with insights, market analysis and daily opportunities.

Let’s grow together!

In this context, the growth dynamics of BNB, Binance’s own internal exchange coin, which is showing rapid growth in profitability, is attractive. Over the last week, BNB gained 7%, breaking through the $330 price level. For the full month of January 2023, this asset soared 35%, drawing the attention of analysts. Technical analysis shows that the growth will continue, and the next target for the coin in February is $400. 

Another striking result of BNB is that this coin has risen to the 4th place in the ranking of cryptocurrencies by market capitalization from CoinMarketCap.

In fact, BNB is becoming an interesting way to invest directly in Binance’s growing monopoly, backed by the credibility and market share of its powerful parent. Let’s see what other objective reasons are behind this asset’s rapid growth.

Brilliant results for 2022

What’s happening with BNB right now is far from a random outcome, as BNB has been very active throughout 2022, which has been a crisis year for many other projects. As of the end of December 2022, this coin (and its native blockchain) reached the following numbers:

  • BNB Chain surpassed the Ethereum blockchain in the number of addresses for the first time; according to the Etherscan service, the number of asset wallets issued on the ETH network is 217.3 million, and the number of unique addresses on the BNB Chain blockchain has reached 23.7 million. 
  • BNB Chain entered the top 3 largest blockchains in the world, setting two more records in 2022: in May, the network processed the maximum number of transactions (9.8 million), and in October, the number of active users of the network grew to a peak of 2.2 million per day.
  • CoinMetrics determined the five most effective assets of 2022. All 36 assets, selected by experts for the analysis, registered a decrease in profitability, but for five cryptocurrencies, this decrease was not so critical. According to the report by CoinMetrics, the top 5 assets most resistant to the crypto winter dump included BNB.

The latest reasons for growth

In January 2023, the activity of the development team behind BNB reached a new level, offering three big events:

  • BNB Chain presented a white paper on the new BNB Greenfield project, which is a decentralized data storage system in the BNB ecosystem. After its launch in the summer of 2023, this promising tool can be used for personal cloud storage and the deployment of Web3 services. This decentralized storage system with smart contract-integrated Web3 applications will be powered by BNB tokens.
  • In January-February 2023, Binance Chain developers will implement parallel EVM (Ethereum Virtual Machine) transaction execution, which will significantly improve the performance of their network in the long run. This big upgrade is being done in several stages, but already the cost of processing blocks in the BNB Chain has decreased by about 20-50%, making transfers cheaper.
  • Periodically, Binance burns some free BNB from its reserves, gradually reducing the supply of its coins in the market. A few days ago, Binance completed its first quarterly BNB burn in 2023. The Binance blog provides the facts and figures for this latest big burn, which reflect the total number of coins burned: 2,064,494.32 BNB. The reduction of coins is perhaps one of the most effective ways to increase the price of an asset, causing a deflationary effect in the market.

All information provided on this website is for educational and informational purposes only. Please consult with our Disclaimer.

Home » Blogs » Opinions » BNB is the 2nd-largest altcoin by market cap after ETH, and its growth continues. What’s going on?

Your complaint has been sent to a moderator