Binance Coin, the native cryptocurrency of Binance Smart Chain, is seeing a massive increase in transaction volume
On Monday April 12, BNB was valued at $ 87 billion at the price of just under 600. The valuation of Ethereum round the u $ s246,000 million, which is 2.8 times that of Binance Coin.
BNB’s technical momentum was so strong that it briefly surpassed the volume of the BTC / USDT pair on Binance. This trend is significant because USDT is the largest stablecoin in the global market and the BTC / USDT pair is one of the most liquid trading pairs within cryptocurrencies.
Why is Binance Coin growing so strongly?
Binance Coin increased due to three key reasons: a general rebound on the popular by Binance Smart Chain; a strong technical drive; and the gap between BSC and Ethereum projects.
In the last weeks, the volume of transactions in Binance Smart Chain tripled volume from red blockchain de Ethereum.
Particularly in Southeast Asia, the use of Binance Smart Chain rose, according to Coin98, the largest venture capital company in Vietnam building a DeFi ecosystem aimed at Asia.
Considering that the price of BNB was much lower than that of Ethereum until the end of March, this discrepancy between BNB and ETH probably made BNB an attractive trade.
There’s also a large gap in valuations between the Ethereum DeFi ecosystem and Binance Smart Chain, that fueled a large part of the demand for BSC projects.
This caused the value of BNB to rise rapidly in the last two weeks, while ETH remained relatively stable at just over $ 2,000 per unit..
A cryptocurrency journalist in China known as “Wu Blockchain” explained: “BNB surpassed the astonishing $ 600 level, but Ethereum rates fell to their lowest point in a month. Although the volume of transactions of BSC is 3 times greater than that of Ethereum, both are not in a competitive relationship“.
And he added: “the top 10 BNB addresses are over 88%, and Eth is 20%. The future of Ethereum depends on the update of EIP-1559 and 2.0. The only two things Binance needs to worry about are government crackdown and hackers“.
Traders anticipate that BNB will undergo a more explosive rally for the foreseeable future if it breaks out against Bitcoin. Kaleo, a cryptocurrency trader, he explained: “The $ BNB breakout above this level in the $ BTC pair could lead to the kind of explosive momentum needed to really approach $ 1,000 per unit.“.
Will capital flow back to Ethereum?
But nevertheless, Kelvin Koh, the Managing Partner of Spartan Group, one of the largest DeFi-focused funds in Asia, estimated that “for now, expect capital to rotate back to Ethereum as BSC projects get closer to valuing ETH equivalents. ”
He stressed that there is a huge valuation gap between BSC and ETH projects. This gap could make BSC projects attractive to the market.
“BSC is having its own DeFi summer …. lots of alpha to discover in BSC ($ XVS, $ CAKE). If you’re wondering why Ethereum’s DeFi coins are lackluster, it’s because of the huge valuation gap that still exists between BSC coins and their ETH equivalents. Until this gap is closed, money is not rotating back to ETH DeFi coins“, full.
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Why has Binance Coin already reached 37% of the value of Ethereum and its value does not stop growing?