TL;DR Breakdown
- Binance Coin flips Tether to become the third-largest cryptocurrency by market cap.
- BNB price has risen by over 521% since the month started.
- The BNB price surge is due to the growth of the Binance Smart Chain.
Binance Coin price makes significant gains
This month has been extremely bullish for BNB due to the rise in the daily transaction on the Binance Smart Chain (BSC). Today, the market cap of BNB has now surpassed that of Tether, making it the third-largest cryptocurrency. The coin has experienced an explosive 521% increase since the beginning of the month, rising from $48.93 to $304.
The outburst of Binance Coin is due to the increasing growth of the BSC in the DeFi space and other macroeconomic factors. This is not surprising because the BSC is a very powerful and user-friendly ecosystem for building DeFi projects, which has led to a surge in the number of monthly visitors on the platform.
While Ether hit a new ATH yesterday, Binance was forced to temporarily suspend ETH and ETH-based tokens withdrawals due to congestion issues. During the temporary suspension of ETH trades, BNB made a $60 gain.
Binance Coin rally is due to the popularity of BSC
The major driver of BNB price rally is the Binance Smart Chain, which has now gained more popularity in the DeFi space due to its features. Recently, the Binance CEO had said that the real incentives that draw users to the platform are the lower fees and high transaction speed. As a result of the explosive growth of BSC, analysts expect it to experience horizontal growth.
Another factor responsible for the growth of the Binance Smart Chain is the high transaction fees of Ethereum, which has made it quite inaccessible to most retail investors. As DeFi protocols are now gaining more popularity, Ethereum has not been able to handle the high transaction volume. Therefore, the blockchain is speeding up the development of ETH2.0 to address the scalability issues.
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