After Dropping 34% Against BTC, Reasons for a Possible BNB Comeback
Binance Coin (BNB) has been on a fantastic run of late. The coin started the year trading at around $6 and has managed to increase to as much as $32.64, gaining upwards of 540%.
Nevertheless, Binance’s native cryptocurrency has been struggling against Bitcoin lately. In the past 17 days alone, it’s down about 33% against BTC. It’s worth noting, though, that Bitcoin’s recent parabolic movement did leave almost all of the altcoins hanging out to dry.
Despite BNB’s recent lackluster performance against BTC, it remains hard to overlook its positive traits. Popular cryptocurrency commentator The Crypto King took to Twitter to name a few of them.
There’s quite a lot of merit to some of those reasons. For example, the total amount of BNB that will ever be issued is 200,000,000. However, Binance has said that it would burn BNB worth 20% of its quarterly profits. The seventh coin burn was in April and it represented the exchange’s profits for Q1 of 2019. The next one should occur in July. Naturally, a reduction in the coin’s supply could propel an increase in its price, should demand for it remain equal or greater.
We’ve also seen a serious amount of hype circulating surrounding Binance’s decentralized exchange (DEX), Binance Chain, which creates additional utility for BNB.
Furthermore, the initial exchange offerings (IEOs) which have been carried out on Binance Launchpad have so far turned out to have had a very positive impact on the BNB price. As we have reported, BNB has recorded higher highs with every IEO in 2019.
When we add the fact that BNB can also be used to pay fees on Binance and earn a discount in the process, one can see why BNB might be primed for a long-term price increase. However, there are a few other things which should be noted.
Why One Can’t Compare BNB to BTC
The Crypto King also predicted that Binance Coin’s price would increase due to it supposedly having more utility than Bitcoin. While we can agree that BNB certainly has utility – that contributes to the fact that Binance Coin is the seventh largest crypto by market cap – comparing BNB to BTC may be a bit of a stretch.
One of the ways Bitcoin has managed to establish itself as the preeminent cryptocurrency is its true decentralization. BNB, on the other hand, is largely influenced by Binance, and we can already see that reflected in its price.
This alone leads to additional considerations. For example, if Binance failed to comply with certain regulatory requirements and got shut down, that would essentially devalue BNB entirely – something that can’t really happen to Bitcoin. The list goes on.
Nevertheless, BNB has proven its worth, and it’s definitely one of the more reputable cryptocurrencies on the market. Given all of its functionality and utility, a rebound probably sounds reasonable.
It’s also worth noting that Binance is about to complete yet another IEO, and the ticket claiming is already in process.
More news for you:
Back to the list