On Friday (March 1st), Binance Coin (BNB) kept its price rally going with another 10% surge to overtake TRON (TRX) and become the 9th most valuable cryptocurrency by market cap.

In the past one month, the performance of the BNB token has been incredible, with the price going from $6.63 on February 1 (21:00 UTC) when the market cap was around $857 million to $11.43 on March 1st (21:00 UTC) when the market cap is around $1.6 billion, i.e. a price increase of 72.4%. In the past 24-hour period alone, the price has gone up 10.15% .

So, what is behind such strong price performance during a harsh crypto winter?

Although there are various explanations, perhaps the best and most succinct explanation is offered by Changpeng Zhao (“CZ” for short), Co-Founder and CEO of Binance, who sent out the following tweet shortly after BNB had moved into the 9th position in the market cap table:

There is probably no other major cryptocurrency exchange that keeps improving (by adding new features/services) and expanding (by opening new exchanges around the world) as fast as Binance, and this seems to the main driver for all the excitement around this token, and what is giving hope to traders/investors that this price rally is not going to stop anytime soon.

If we were to focus on events in the past 24-hour period that could have contributed to today’s 10% price increase, probably the item on the top of the list would be the following announcement by the Biance CEO earlier today:

Also noteworthy is the recent impressive analysis of Binance that was done by crypto-focused investment firm Multicoin Capital Management. Tushar Jain, a managing partner there, summarized this report in a blog post that he published on February 19th, but reading the full report is highly recommended. The following paragraph is from the conclusion of the report:

“BNB is the best example of the discount token model we've come across. Discount tokens are elegantly designed because increased exchange useshould lead to an increase in the price of the token. Additionally, BNB token holders have a claim on Binance's cashflow (they have received $125M in cash flows through token buybacks over the past 1.5 years ince Binance was launched). Binance Chain will likely diminish the centralized Binance exchange revenues over the long-term, but the new DEX is ctually good for BNB token holders . BNB token holders will likely stake their tokens to process trades on Binance Chain, transforming BNB into a yield-generating asset.”

And the authors of the report conclude with this statement:

“… we are bullish on BNB at current valuations ($10.06), and expect Binance Chain to host the de facto DEX for the blockchain-enabled Web3Stack.”

 

Featured Image Courtesy of Binance