The world’s largest crypto exchange Binance is enjoying increasing attention again. In view of the upcoming Binance coin burn, the price continues to rise. In the last few weeks, the price has increased by several thousand percent.
BNB Soars to Over $600
Yesterday, BNB, the coin of the world’s largest crypto exchange Binance, hit a new all-time high and was trading at over $600. This means that BNB’s price trend will reach a new high in 2021 and the question is how sustainable this growth actually is. One of the main reasons for the massive increase is the upcoming coin burn, the fifteenth of its kind since the exchange was founded. In just the last four weeks, the BNB price has almost doubled.
For 12 months the price has even surpassed 3,800% (BNB/USD) and should result in a very profitable year 2021 for every BNB investor. With a market capitalization of more than $86 billion, BNB is now the third-largest cryptocurrency.
More Application Possibilities for BNB
BNB was initially intended as a means of payment for trading fees on Binance and was designed to provide traders with an incentive to pay for their trades in BNB. However, within the past two years, the Binance ecosystem has grown significantly and it’s no longer just a crypto exchange. Because now there is also a Binance Smart Chain (BSC), which aims at overperforming Ethereum. The reason for this is significantly lower transaction costs on BSC compared to Ethereum.
After a cautious start, there are now more and more dApps and users on BSC, a factor that also helps the BNB Coin. One of these dApps on the Binance Smart Chain is Pancakeswap, one of the largest decentralized crypto exchanges based on an Uniswap model. In the past 24 hours, the DEX has generated more than $2 billion in volume.
What Are Coin Burns?
Binance is known for regularly carrying out so-called coin burns. Certain quantities of BNB are ‘burned’, that is, are taken from the market, whereby the circulating supply is steadily reduced. This is a well-known tactic that is used by many projects in this sector. According to the theory, this should ensure that the price of BNB continues to rise.
Binance’s last coin burn took place in January 2021, more than 3.5 million BNBs were burned. In US dollars, it was only $165 million at the time.
Conclusion: Binance Is Gaining Momentum
Despite all the criticisms towards Binance, it’s really a remarkable development that this exchange has made since 2017. There are probably only a few cases in crypto history where an organization has grown so quickly and has such high sales/profits (with a relatively low number of employees).
It was definitely the right move by Binance — to launch the Binance Smart Chain and openly attack Ethereum. In the meantime, Ethereum is still waiting for the upgrade to ETH 2.0, which should solve some of the existing problems, such as a scalability problem.