BNB Surges Past Major Cryptos
If you believe Bitcoin is having a stellar year, you may want to take a closer look at BNB, the native cryptocurrency of Binance, which is currently the third-largest cryptocurrency by market capitalization. This token has experienced impressive growth, increasing by 129% over the past year, significantly outpacing Bitcoin’s 97% and Ethereum’s 84% returns during the same period. The recent surge in BNB’s value has been particularly notable, with a 29% increase since the beginning of October, resulting in a market cap boost of over $41.7 billion, as indicated by CoinMarketCap data.
Factors Fueling the BNB Rally
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Increasing Adoption
The growth of Binance has accelerated over the past year, coinciding with a spike in crypto trading as major cryptocurrencies reach new all-time highs. As the largest cryptocurrency exchange in terms of trading volume, Binance has reported a user base of 290 million and $14.8 billion in inflows during the last quarter. Additionally, activity on the BNB Chain has surged, with the blockchain ecosystem generating $5.5 million in network fees in just 24 hours leading up to October 8, according to DeFiLlama’s data. -
Introduction of Aster
In late September, Changpeng Zhao, the former CEO of Binance, launched a multi-chain decentralized exchange named Aster, aimed at competing with Hyperliquid, a leading decentralized platform for futures trading. Initially, Aster gained significant traction, briefly leading the trading volume among decentralized exchanges. However, DeFiLlama has since delisted Aster due to concerns regarding the integrity of its data. Zack Shapiro, a digital asset policy expert at The Bitcoin Policy Institute, noted that the heightened interest in Aster likely contributed to the increased attention on BNB. - Growing Crypto Treasuries
Another factor contributing to BNB’s rise is the accumulation of BNB by crypto treasuries—companies that stockpile substantial amounts of cryptocurrency. For instance, CEA Industries, a vape manufacturer, revealed that it held $611 million in BNB as of Tuesday, having announced its strategy to create a BNB treasury earlier this summer. Similarly, B Strategy, an investment firm focused on digital assets, has partnered with Yzi Labs to establish a $1 billion Binance Coin treasury.
Skepticism Surrounding the Surge
Despite the impressive growth, there are skeptics questioning the sustainability of BNB’s rally. Some crypto enthusiasts have voiced concerns on social media, suggesting that the rapid price increase may be driven by market manipulation. Binance has not provided a comment on these allegations. However, Shapiro believes that concerns about manipulation may not resonate with most investors piling into BNB. Instead, he attributes the token’s surge to broader market exuberance, where both high-risk assets and safe havens are climbing as the year comes to a close. "It seems like people are chasing what they perceive to be a lucrative opportunity," he remarked, interpreting much of BNB’s recent performance as speculative in nature.
The cryptocurrency market has seen a remarkable upswing since former President Donald Trump, who labeled himself the "crypto president" during his campaign, began his second term with promises of a more supportive regulatory environment for cryptocurrencies. According to CoinMarketCap, the entire cryptocurrency market has gained nearly $1 trillion in value this year, with major coins consistently reaching new highs. Bitcoin, the leading cryptocurrency, was trading around $124,000 on Wednesday, slightly down from its recent peak of over $125,000.
