At press time, most top cryptocurrencies are up anywhere between 0.5 and 2 percent, while Binance Coin (BNB) is up by over 8 percent in the last 24-hour period. This has been an ongoing trend. This year most cryptocurrencies struggled, while BNB kept rising.
According to CryptoCompare data , Binance Coin went from roughly $9 to $17.05 in about three months, an 85 percent rise. During the same period bitcoin , the flagship cryptocurrency, dropped from $8,600 to $6,500, a 24 percent fall.
The ERC-20 token’s performance is mostly explained by the cryptocurrency exchange behind it. Binance is notably among the top crypto exchanges by trading volume, as it traded $800 million worth of cryptocurrency in the last 24 hours, with BNB making up well over 10 percent of its trading volume.
According to Binance’s whitepaper , the ERC-20 token gives holders significant discounts on its platform’s fees. These discounts are set to decrease over time as in the exchange’s first year the discounts are of 50 percent, while in the second they’ll be of 25 percent. Moreover, the exchange will use 20 percent of its profits to buy back tokens and destroy them every quarter, until half of its 200 million supply has been bought back.
It’s worth adding the exchange recently helped its token surge after announcing it was going to double referral rewards for those who hold 500 or more BNB . This helped increase demand, while increasing scarcity as those who have over 500 tokens won’t sell so they can keep on enjoying a 40 percent commission on referrals.
The cryptocurrency exchange has recently announced it’s going to launch a separate decentralized exchange (DEX), in which the token is going to play a fundamental role. Moreover, crypto lending platform Nexo has revealed it will accept BNB as collateral for its loans.
Increasing demand while buying back and burning tokens to reduce Binance Coin’s supply is naturally helping drive the cryptocurrency’s price up, seemingly turning it into a token that can be used to hedge against the cryptocurrency ecosystem’s ongoing bearish trend.
As CryptoGlobe recently covered, independent financial research boutique Fundstrat Global Advisors launched a “Benchmark Crypto Performance” report that details the performance of various cryptocurrencies. It notably featured Binance Coin as the number one token.
Binance itself, as its token keeps growing, is set to improve liquidity provided to users by offering fiat-to-crypto trading pairs this year through a Malta-based exchange, while keeping Binance a pure crypto-to-crypto platform.