BNB rises by 62% despite Binance's Legal Woes, Future Prospects Align with BNB Chain Activity
Summary:
The BNB (BNB) cryptocurrency saw a 62% increase over 30 days, due to broader market influences. Despite the former CEO of Binance's legal uncertainties, BNB's future is perceived promising, following Binance's settlement with the U.S. Commodity Futures Trading Commission (CFTC). Binance's continued robust operation amid high-volume trading has boosted its reputation. The recent rally in BNB's price is attributed to a 41% increase in activity on BNB Chain's DApps and active engagement from its users. However, a definitive forecast would require further analysis.
The value of BNB (BNB) has seen an impressive increase of 62% over the past month, peaking at a two-year high of $489.50 on March 8. This upswing, which was largely influenced by the broader market, has reinforced BNB's position as the third most valuable cryptocurrency by market capitalization, excluding stablecoins. The question on many traders' minds now is whether or not we can expect BNB's price to cross the $500 mark, and if so, can the surge be maintained?
The Future of Binance and CZ Could Impact BNB's Value:
Investor confidence in BNB reaching its current levels was shaky, particularly after the founder and former CEO of Binance, Changpeng “CZ” Zhao, made a plea deal with a U.S federal court in November 2023. This came about after accusations that exchange users involved in unlawful activities were utilizing the Binance platform to move ill-gotten funds. At that time, CZ agreed to step down as CEO, which threw the future of the BNB token—part of whose value is tied to the Binance exchange ecosystem—into doubt.
Despite CZ’s pending sentencing, the fact that Binance settled with the U.S Commodity Futures Trading Commission (CFTC) in December 2023 has brought some assurance to BNB’s future prospects. As part of the settlement, Binance was instructed to implement a formalized corporate governance structure, complete with audit and compliance committees. In the meantime, CZ has been instructed to remain in the U.S. until his sentencing.
As cryptocurrency trading volumes reach a 12-month peak, various leading exchanges, including Coinbase, have encountered multiple technological glitches, leading to widespread criticism. Cryptocurrency investor @Rampage_Calls expressed his discontent with Coinbase’s regular system failures on social media. Meanwhile, Binance’s operations reportedly remained unaffected.
Former Google software engineer and current Bitcoin enthusiast, Vijay Boyapati, compared Coinbase's repeated inability to maintain liquidity during market surges to MtGox’s downfall—a previous market-leading exchange, whose shortcomings in structural robustness led to a major breach. He called on Brian Armstrong, Coinbase’s co-founder and CEO, to rectify the situation urgently, drawing attention to similar problems the exchange faced during the 2017 cycle.
To an extent, Binance's success—even as it dominates the spot and derivatives trading volumes—is somewhat due to its reliable trading engine and servers, particularly when compared to the likes of Coinbase. This reputation has motivated users to invest more with the expectation of reduced trading fees and access to the exchange’s token launch platform.
The Rise of BNB Can Be Attributed to Increased Activity on the BNB Chain:
BNB Chain serves as a significant utility to BNB, primarily because of its network activity. In the last month, the total value deposited into the network’s smart contracts, measured in BNB terms, decreased by 7%.
Current data shows that around 12.8 million BNB has been invested in BNB Chain’s decentralized applications (DApps)—a significant drop from the 19.4 million recorded in early 2023. Comparatively, the Ethereum network saw an increase of 3% in ETH terms over the past month, while Solana’s total value locked (TVL) grew by 20% over the same period.
While it could be argued that not all DApps—like NFT marketplaces and decentralized finance (DeFi) aggregators—require heavy deposits, therefore, transaction volume serves as a more accurate measure for network usage.
BNB Chain's recent 41% increase in DApp volume over the past month and its third-place overall ranking justifies the recent spurt in BNPC's prices. The chain also stands out in terms of the number of active addresses linked to its DApps, reaching an impressive 5.6 million.
A more detailed study of BNB Chain's activity and potential impacts on the Binance exchange following CZ’s trial is needed to forecast whether BNB is set to cross the $500 mark. Yet, the preliminary data certainly appears promising.
Please note: This article should not be seen as investment advice or recommendations. Making an investment or a trading decision involves risk, and readers are advised to do their homework before making a choice.
Published At
3/9/2024 4:42:07 AM
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