According to the data site CoinGeso, it’s a digital token linked to the success of Binance, which boasts a higher spot trading volume than CoinBase. The token, binance coin, has boosted 14-fold in price in 2021, to a market value of $86 billion.
Co-founder and CEO of crypto data firm the TIE, Joshua Frank, announced that some cryptocurrency investors see BNB as a way to get excess return over a simple purchase of bitcoin. He added that the digital currency doubling in price this year seems almost paltry by comparison.
Frank added that funds can’t just purchase bitcoin because if the funds buy bitcoin, it’s not worth it for their investors. Moreover, TIE CEO announced that the Binance coin is one of those giant coins that they can get exposure to, and they can put a large position in.
Binance press officials announced they didn’t know why BNB has rallied so dramatically in 2021. The spokesperson reported that the token’s price is not something that can be controlled.
However, cryptocurrency analysts stated that Binance’s recent business moves, including launching a blockchain network to compete with Ethereum for a share of the decentralized finance market, known as DeFi, have helped to increase the BNB token’s prospects.
BNB’s market cap might overtake that of ether
According to Nick Mancini, research analyst at Trade The Chain, BNB’s market capitalization might eventually overtake that of ether, the Ethereum blockchain network’s native cryptocurrency. Remarkably, Ether prices have tripled in 2021 to a market value of over $260 billion.
Remarkably, BNB tokens confer no equity ownership rights. Binance is a closely-held company, still led by its founder, Changpeng Zhao.
Significantly, BNB is deemed an exchange token. It can be used to pay fees on different Binance trading platforms. Moreover, it sometimes entitles the payers to discounts. BNB can be used as a currency on blockchain networks sponsored by the exchange. Investors in the token are betting on its supply and demand, which effectively translates to a bet on the success of the Binance ecosystem.