BNB, the currency of the cryptocurrency exchange, Binance, has been showing a particularly remarkable dynamic in recent months. Currently, BNB is only trailing behind ETH in terms of market capitalization among altcoins.
The common path with Binance
An obvious winner in the cryptocurrency industry – through the cryptocurrency price declines and the collapse of cryptocurrency companies – is Binance, which after the FTX crash has significantly increased its market share. Currently Binance holds 92% in the spot market and 61% in the cryptocurrency derivatives market.
Based on the above, BNB could not fail to show rapid growth in its profitability as well. For the whole of January 2023 BNB has seen an increase of around 25%, and according to technical analysis its growth will continue and the next target for the currency in February is to reach $400 from the current $330.
Another impressive achievement of BNB is the fact that it has risen to the 4th place in the ranking of cryptocurrencies based on their market capitalization by Coinmarketcap.
For many, BNB is a way to invest in Binance, which currently dominates among the centralized cryptocurrency exchanges.
Excellent results for 2022
BNB achieved significant things in 2022, despite a difficult period for the cryptocurrency industry:
- BNB Chain surpassed the Ethereum blockchain in number of addresses for the first time. According to the Etherscan service, the number of asset wallets issued on the ETH network is 217.3 million, and the number of unique addresses on the BNB Chain blockchain has reached 23.7 million.
- BNB Chain climbed into the top three largest blockchains in the world, setting two more records in 2022: in May the network processed the maximum number of transactions (9.8 million) and in October the number of active network users peaked at 2.2 million per day.
- CoinMetrics identified the five most efficient assets of 2022. All 36 assets, selected by experts for the analysis, recorded a decline in profitability, but for five cryptocurrencies this decline was not as significant. According to the CoinMetrics report, within the top five assets that showed more resilience during the cryptocurrency bear market included BNB.
The reasons for the growth
In January 2023, BNB’s development team activity reached a new level, offering three major events:
- BNB Chain presented a white paper on its new project called “BNB Greenfield”, which is a decentralized data storage system in the BNB ecosystem. It is expected to be released in 2023 and can be used both for personal cloud storage and for the development of Web3 services. This decentralized storage system with Web3 applications and embedded smart contracts will be powered by the BNB currency.
- Soon Binance Chain developers will implement EVM (Ethereum Virtual Machine) parallel transaction execution, which will significantly improve their network performance in the long term. This major upgrade is being done in various stages, but already the cost of block processing on the BNB Chain has been reduced by around 20-50%, making transfers cheaper.
- Periodically, Binance “burns” some BNB from its inventory, gradually reducing the supply of coins in the market. A few days ago, Binance completed its first quarterly BNB “burn” for 2023. Binance provided all the data for this latest big “burn”, which reflects the total number of coins burned: 2,064,494.32 BNB. Coin burning is probably one of the most effective ways of increasing the price of an asset, causing a deflationary effect on the market.