The price of Binance Coin has risen by about 120% in the past month. Reasons for Binance Coin growth include the launch of Binance Smart Chain, the public offering of Coinbase stock exchanges, and the overall growth of coin reels. CoinDesk at an essay Has investigated these speculations.
Why is the public offering of Coin Base shares on the Nasdaq important? There is another way in digital currency markets; You can bet on the largest digital currency exchange in the world.
CoinGecko is a digital token linked to the success of the CoinGecko exchange, and data from the CoinGecko website shows that it has a higher instant trading volume than CoinBase. This token has increased 14 times this year and its total market value has reached 86 billion dollars.
Joshua Frank, founder and CEO of The Digital Currency Data Company (The TIE), said in an interview that some digital currency investors have used the BNB as a way to make more money than buying Bitcoin (BTC). They see double growth this year compared to the BNB.
Funds cannot just buy bitcoins, because just buying bitcoins will not be worth it to their investors. The coin bin is one of the larger coins that can be inserted and created a large position.
Bainance media officials said they did not see any reason for the BNB’s significant growth this year. A spokesman for the exchange said that the price of Binance coin “is not something that can be controlled”.
But digital currency analysts believe that Bainance’s recent moves, including launching a Blockchain network to compete with Ethereum for a decentralized financial market share (DIFA), have helped boost Bainance Quinn’s outlook.
Bainance tokens, unlike Quinn Base shares, do not hold any shareholding rights for its holders. Bainance is a private company still run by its founder, Changpeng Zhao.
Bainance Quinn is known as an “exchange token” used to pay commissions on various Bainance trading platforms. Payers are sometimes discounted with this token and even used as currency in Blockchain-backed networks.
Those who invest in this token trade in supply and demand, which is, in fact, a condition for the success of the Bainance ecosystem.
The Rise of Bainance Smart China
Bainance Smart China (BSC) is a less decentralized general blockchain that competes with the Ethereum blockchain. The Blockchain has performed well so far. The DappRadar report for the first quarter of 2021, released on April 1, shows that China’s Bainance Smart, with a transaction fee 35 times cheaper than Ethereum, surpassed Ethereum in terms of daily active individual wallets in the first quarter of 2021. Is.
Citing data from Defistation data, Deep Reader said that the total value locked into the Venus Protocol, the highest decentralized money market protocol in China’s Bainance Smart, is one of some of Ethereum’s most popular Diffie projects, including Uniswap. Uniswap) and Compound.
The great success of Bainance Smart China has played an important role in the rapid growth of Bainance Coin. According to Nick Mancini, a research analyst at Trade The Chain, the BNB offers discounts as a “discount token” for trading in the Binance DEX exchange and the Binance exchange itself.
In an interview, Frank, CEO of Tai, also said that many digital currency hedge funds have concluded that accessing Difai, China’s Bainance Smart, is a “much cheaper and more effective way” than to cover the cost of “Gas”. Which is increasing day by day.
BinanceQueen is used as a gass to pay for the installation of Defy in Binance Smart China.
Mancini also speculated that the total market value of BNB may eventually outperform Ether (ETH), the native currency of the Ethereum Blockchainchain network. The price of ether has tripled this year to a market value of more than $ 260 billion.
If BNB and ether grow at the same rate, Bainance Quinn will outperform Ether in the next two to four months.
It is no exaggeration to say that the rise in the price of coinage occurred during the “coin season”. The Altcoin season is a time when digital currency traders are strengthening their coins, ostensibly due to the slowdown in bitcoin growth.
Evidence of this can be seen in the recent decline in Bitcoin’s share of the total value of digital currencies (market dominance rates), which has reached its lowest level in two years.
Digital currency hedge funds that are trying to capture the market may also have to invest in instruments such as BainCoin.
Mutual fund managers typically apply an “2 and 20” annual fee structure; This means that 2% of the net asset management fee of a fund and 20% of the performance fee.
Because there are so many ways for investors to have low-cost bitcoins, digital currency mutual funds must offer “unique ways” to make a profit from the largest digital currency at lower fees, Frank said.
Coin Base stock supply overflow
The public offering of Quinn Base shares may be another potential driver of Quinn Baines growth. Although Changpeng Zhao has said the company has no plans to become a public company, the token ecosystem may benefit from Coin Base’s valuable speculation.
A pre-offering deal traded on FTX has set Quinn Base’s stock price at around $ 634, which is worth $ 160 billion.
It has previously been reported that exchange tokens have grown significantly since last year and are sometimes traded as shares of exchange companies in the digital currency market. And of course, exchange offices are the most lucrative members of the digital currency market. The FTT token, owned by the PhotoEx Exchange, is another exchange token that has grown by more than 800% since the beginning of this year, according to Messari data.
Buying these exchange tokens may be a “buy with rumor, sell with news” event; So much so that in the run-up to the IPO, everything will grow in the next few days.
Increasing rewards also increases risk
Obviously, with the sharp rise in the price of the coin, there are also major risks. Most importantly, in the digital currency industry, where decentralization is a value, binance is highly concentrated. According to Mancini, BNB was created by Bainance and is owned by the exchange, and the Bainance team still owns more than 80% of the token.
This means that when regulators come, there is a centralized source of accountability. Now compare this to ether, which is completely open source.
This regulatory risk can be a serious impediment to the BNB being listed in other exchanges or obtaining a license to expand its services in the United States or Europe.
Ryan Watkins, a research analyst at the Mesari Institute, recently criticized the centralization of China’s Bainance Smart in a Twitter message, arguing that the Blockchain was just a “copy” of Ethereum.
The reason why China’s Bainance Smart is faster and more scalable is not due to some magical technological innovations. It is the magic of being focused. Bainance Smart China is an Ethereum fork with a centralized set of validations. That is nothing else.
However, hedge funds or even medium-sized digital currency investors may not care, at least in the short term, Frank said.
He also added:
The average consumer just wants a good user experience. At the same time, if you are a hedge fund that trades and creates short-term opportunities, you are much less concerned with decentralizing risks.
Bainance Quinn’s low pricing strategy may eventually lead to a loss of competitiveness. Mancini said:
Eventually everyone gets a zero transaction fee. Although Binance Coin is currently offering cheaper trades, this advantage will eventually disappear.