Reasons Why Binance Coin Is Hitting an All-Time High

Anubha  |  Feb 23, 2021

Now is a phenomenal time for cryptocurrencies. Market giants, Bitcoin and Ether are on a bullish momentum influencing the rise of other altcoins. The altcoin market is on the verge of a major breakout. Its price has grown from millions to billions in just months. Binance chain native coin, BNB has outperformed other altcoins and has secured the position of the third-largest cryptocurrency by market cap of more than $45B. It has climbed four positions from 7th to 3rd flipping Tether (USDT). And in this article, we're about to find out the exact reasons for this gradual rise in the price of Binance Coin.

Market Trends

Currently, BNB is trading above $240. Showing exceptional growth, it has risen from a low of $36 to a high of $342 in the last month. Just in the last 7days, it has seen a hike of 110%. If you have had purchased BNB at the time of its launch, you would look at an approximate return of 256914.9%.

 

Binance Smart Chain(BSC) which is a blockchain similar to Ethereum serves as an alternative marketplace for issuing, using, and exchanging digital assets in a decentralized manner. Housing top dApps like PancakeSwap, Venus, Autofarm, BakerySwap, and many others, it covers DeFi applications, decentralized exchanges, gambling apps, and games. Its daily transaction count has outgrown Ethereum.

Binance price rise reasons

Binance price rise reasons

Reasons for the Rise in Binance Coin Price

  • It primarily owes to the peak in the DeFi craze in the crypto enthusiasts. BSC has held a heavy lean towards DeFi applications, attempting to offer all functionalities as Ethereum based dApps. Its DeFi apps, PancakeSwap and Venus have generated a total transaction volume of $15 billion in January 2021. 
    1. A tremendous increase in DeFi transaction volume has put a serious strain on the Ethereum blockchain. Users are facing more waiting times for their transactions to get through. They are forced to pay higher gas prices, typically above $15 per transaction. The highest gas fee was recorded in Feb as $25/transaction.
    2. Binance price rise reasons
    3. Higher gas prices harshly constraints small and mid-range transactions to get confirmations on time. The Binance chain provides an ideal alternate for these issues. It charges no fees for deposits and its trading fees are very less than what miners in Ethereum are charging. BSC enables smart contracts and the transaction fees for its native BEP-20 standard are much lower. For developers, it costs way less to deploy a contract on the Binance chain than on the Ethereum chain. In fact, 30% of all gas fees paid by the user to interact with smart contracts on BSC are returned to developers to encourage adoption.
      • Binance has also increased the number of tokens available on its staking platform and the exchange raised the interest rates for each token to encourage investors to stay on the exchange instead of chasing yields at SushiSwap and Uniswap. It offers more than 600 token pairs on its exchange.
      • New DeFi projects offerings on Binance. A scroll through Binance’s Twitter feed shows daily announcements of new partnerships and integrations. It provides lucrative options for users and investors to try out Binance. It has the next biggest offering of DeFi apps in the market which is currently dominated by Ethereum based applications.
      • At the end of 2020, Binance announced a $10 million fund to support projects in the Polkadot ecosystem. Furthermore, Binance Labs announced $2.4 million funding for Plasm Network, which is a multi-virtual machine scalable smart contract platform on Polkadot.

        • A few weeks ago, the largest age consumed spike in BNB's three and a half year history occurred. This was an indication that dormant tokens are being used and put in circulation, and it wasn't surprising to see prices spike fairly quickly afterward.
        • Binance price rise reasons

          Source: Santiment

          • Binance chain underwent its quarterly BNB burning in January. Binance burned a total of 3,619,888 BNB, equivalent to $165,791,000 USD worth of tokens. Soon after, the Binance coin experienced a torrent of growth in its price and demand owing to a decrease in supply.
          • A consistently declining Network Value to Transaction (NVT) ratio of BNB is a great sign and indicates that token circulation is increasing in comparison to BNB's market cap. A decrease in the NVT ratio ensures that a cryptocurrency is experiencing a healthy amount of transaction activity on its network.
          • Binance price rise reasons

            Source: Santiment

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