Binance Coin (BNB), the native token of Binance, just had its best week ever. On February 2, BNB hit $50 for the first time ever, which was its all-time high (ATH) back then.
A week later, on February 10, the cryptocurrency grew to as high as $148, marking a rise of more than 150% for the token over the past week. This has propelled BNB up the crypto rankings, where it is now recognized as the seventh-largest cryptocurrency in the world by market capitalization.
This bull run for BNB is part of a bigger growth period for other major cryptocurrencies. Bitcoin, the world’s biggest crypto, showed a steady rise from $35,000 to $39,000 for most of the week.
But the sudden revelation of Tesla’s ownership of $1.5 billion in BTC has driven the crypto further up to as much as $48,000 around 24 hours since the announcement. Ethereum breached the $1,500 price point for the first time ever on February 2, and it has fluctuated up and down over the next few days, on its way to a new ATH of around $1,800.
But beyond the bullish environment for the entire crypto industry, there are several catalysts that drove this sudden rise of BNB’s price. To provide more context for this, we look back at BNB’s history and the recent events that drove the increase in the crypto’s value.
BNB Price History and How Recent Events Affect it
This is a quick chart of BNB’s price and growth through the years:
|2021 (up to Feb 9)||$37.37||$105.68||$36.93||$105.68||+$68.31|
Based on these initial numbers, we can see that over the long term, BNB is growing year over year, except for the bear market year of 2018. The rapid rise from this past week was a microcosm of the relentless building and growing that the Binance team has done for its ecosystem of crypto services.
In addition, the high points in BNB’s prices from each year reflect certain high points in Binance’s history. The peak price in 2018 was reached in January, when Binance took the lead as the world’s biggest crypto exchange.
The previous all-time high, which was set in June 2019, came in the middle of successful endeavors such as Binance DEX and Launchpad. Last year’s high point, reached on December 2020, came in the middle of Bitcoin’s rally to $40,000 and the prime position that Binance has on both trading (spot and futures exchanges) and blockchain (Binance Smart Chain) fronts.
But for this recent rise, we point at different factors from across Binance that served as growth catalysts.
Accelerated BNB Burn (January 19)
In January 2021, Binance CEO Changpeng Zhao (CZ) announced that there would be an acceleration to the quarterly BNB burn process that the organization does to decrease the total BNB supply and therefore boost scarcity for the token.
Noting that the current burn rate for BNB will mean that the commitment to burn 100 million BNB will reach 27 years, CZ said, “The current accelerated burn would put the trajectory to be around 5-8 years to finish the 100 million BNB.
The accelerated burn began in mid-January, when Binance burned $165 million worth of BNB, or 3,619,888 BNB in total, more than double the dollar amount of its previous high for the burn event.
New Binance Launchpad Format (February 1)
BNB has always been used as the form of payment for token sales on Binance Launchpad, and participants are required to hold BNB for a chance to gain the right to buy tokens for each sale.
For the recent token sale of SafePal (SFP), Binance Launchpad introduced a new subscription format, which allows BNB holders to commit an amount of BNB towards a token sale, depending on how much BNB they hold on average for a period of time.
This transition from the previous lottery format to the new subscription format opened up token sales to more participants, who were encouraged to buy and hold BNB in turn.
Around 47,000 people joined that token sale, and their SFP holdings grew 16x the token’s initial price of $0.10. A person who staked 500 BNB to participate in the SFP token sale ended up earning $40,000 overnight, even without calculating the price increase of BNB.
Binance Pay Introduction (February 2)
During the Binance Blockchain Week, CZ unveiled Binance Pay, a new payments system that lets people pay and be paid in BTC, ETH, SXP, BNB, BUSD, and even the Euro to friends and family worldwide.
Currently in beta, Binance Pay seeks to introduce an easy way for people to use crypto, including BNB, for spending and sending assets easily.
While more details have yet to emerge from this new product, Binance’s foray into the payments industry is seen as a sign that there are better things ahead for Binance — and BNB by extension.
Record Transaction Volumes for Binance Smart Chain (February 8)
While Binance is a brand that is well-known for being a crypto exchange, it has invested significantly in its own blockchain, called Binance Smart Chain (BSC). Launched in September 2020, BSC has grown into an ecosystem of Ethereum-compatible blockchain services that include decentralized finance (DeFi), decentralized apps (dApps), and more.
On this blockchain network, BNB is used to pay for transaction fees and earned through staking on the network.
With transaction fees that are a fraction of the cost on the Ethereum network, as well as connectivity with various other blockchains, BSC has attracted many blockchain projects, which drove the number of daily transactions on the BSC network to more than 1.66 million as of February 10, a new record and a figure that surpasses Ethereum’s transaction numbers by 30%.
There are now $4.2 billion worth of digital assets, called BEP-20 tokens, that use BSC. The recent market movement mainly points to the willingness of blockchain users to increasingly go for Ethereum alternatives, and BSC’s attributes and growing popularity have played a key role in the BNB rally.
“The longer-term vision for BNB is for it to become the native token on multiple application-specific blockchains. BNB was never intended to replace Bitcoin or Ethereum. To become a true mass-adopted application, BNB must be able to facilitate billions of transactions per day. In its current form(s), we still have a long way to go. We are working on it,” CZ said about BNB’s momentum on the blockchain space.
Beyond Recent Events: BNB’s Utility on Multiple Fronts
While a one-day increase of more than $25 or a one-week hike of more than $50 would seem sudden for BNB, this momentous growth is the result of more than a thousand days of continuous work to increase the reach and utility of BNB in as many areas as possible. Right now, you can use BNB to:
- Pay for trading and transaction fees on the Binance exchange at a 25% discount.
- Spend at more than 60 million merchants worldwide through the Binance Visa Card.
- Qualify for VIP benefits on Binance, depending on how much BNB you hold.
- Commit to token sales on Binance Launchpad and join the newest token offerings.
- Pool your holdings for earnings in new tokens offered on Binance Launchpool.
- Earn additional BNB and other assets via BNB Vault, where you can hold BNB and get combined earning opportunities.
- Pay for gas fees on BSC for your use of the many DeFi platforms and other dApps on the network.
- Stake on BSC to earn blockchain rewards from your support of the blockchain network.
- Donate to worthwhile causes on Binance Charity.
- Provide liquidity on Binance Liquid Swap to earn additional assets.
- Get extra rewards by participating in promotions and competitions on Binance
- Book flights, hotel stays, and more through Travala.
Right now, there are more than 200 use cases for BNB, which is supported by more than 180 projects and companies inside and outside crypto. On Binance, people can purchase BNB using 46 local currencies via many payment methods like credit or debit cards and bank transfers.
With BNB, you can book flights, hotels or bars, cafes, and restaurants, while also paying for online games, entertainment, and even loan mortgages.
“BNB has grown far beyond being the ‘discount coupon’ token of a centralized exchange. It has become a fully-fledged native coin on two blockchains. Its use cases have also expanded to hundreds of applications on numerous platforms and projects within the crypto ecosystem. These are reflected in its growing price,” CZ said about the overall growth of BNB.
With this combination of sudden increases and constant perseverance for growth, we believe that the current highs that BNB has reached will not be the defining high point, but will be the start of something more.
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