Bitcoin and Ether are the two largest cryptocurrencies by market capitalization. But the third coin on the platform, the Binance coin, is attracting all eyes at the beginning of 2022. This token created in 2017, has already registered a much greater increase than its competitors.
Bitcoin had a saga of 2021, but on the crypto platform, Binance Coin (BNB) is getting more attention. This token is the third largest cryptocurrency after Bitcoin and Ether by market capitalization. However, its growth has been more noticeable than its competitors.
What is Binance Coin?
Binance Coin, or BNB, is the original token of the Binance Chain and the Binance Smart Chain, which operates in a complementary manner. The first is a blockchain designed to allow fast transactions. The second is a blockchain competitor to Ethereum that enables smart contracts – computer protocols designed to allow contracts to be entered into without the need for trusted third parties.
Binance Coin is a utility token that was launched in 2017, a few days before the launch of the Binance platform. 200 million tokens have been created, but some of them are held by Binance for the purpose of “burning” them, in other words destroying them, in order to limit the number of units in circulation and keep their value at one level. ” Destruction events will occur until the total supply is reduced to 100 million Binance says on their site.
Binance Coin allows you to pay low trading fees on Binance, a platform that accounts for 70% of the global cryptocurrency exchange. It allows you to pay for any transaction on Binance Smart Chain and Binance Chain. It could be BNB too It is used to cover travel-related expenses and can be spent on goods and services using the Binance Visa Card says the company.
How did the price of Binance Coin develop in 2021?
The price of Binance Coin has skyrocketed in 2021. While it was at €31 on January 1, 2021, it crossed €200 in early April, and hasn’t fallen below that much since then. It closed the year at €461 on December 31. Stunning growth: its value increased by 1,300% in one year.
This is much more than the growth that the most valuable cryptocurrency recorded today. Thus, bitcoin has increased by 73% and ether by 455%, according to Arcane Research.
Why has Binance coin increased so much?
The success of Binance Coin is partly related to the huge success of the Binance platform. BNB is already used to pay transaction fees on this exchange. Hence, its popularity rating goes up quite logically when trading on Binance gets tough. Moreover, the fact that Binance Coin is linked to a very successful platform has a reassuring effect. However, there is primarily a psychological impact, because as he explicitly points out on the Binance website, “ BNB does not provide users with a share of Binance profits, does not represent an investment in Binance, and does not provide any compensation. »
The success of Binance Coin is also a sign of the success of the Binance Smart Chain. This is the blockchain that makes it possible to traffic smart contracts It is a competitor to Ethereum. And with lower transaction fees than Etehreum, it has attracted people in 2021.” Binance’s smart chain ecosystem has grown exponentially, taking market share from Ethereum Arcane Research says.
It remains to be seen how the Binance ecosystem will evolve and what impact this will have on the Binance coin. It is clear that Binance is not the only one in the market, as it is facing fierce competition, especially from FTX. And the Binance Smart Chain is not the only blockchain that is seeking to regain the market share occupied by Ethereum: Solana is also very well positioned at this level.
What do we blame Binance for?
In addition, Binance will have a lot to do to allay the concerns it has raised among financial regulators in many countries, who believe it is not properly respecting the rules imposed on companies of this nature.
After striving so long to justify not having a head office, Changpeng Zhao seemed to have gotten used to the idea that he would have to settle down. In September 2021, he admitted that the business needed to change. ” We realized that we needed to be a central entity in order to be able to work with the regulators. We need to be more transparent about our shareholders and in controlling our risks, to have records. (…) We will transform ourselves, so that it is easier for the regulators to work with us.»
If Binance fails to make sufficiently reassuring pledges, regulators in some countries could block them. She still has a long way to go at this level. On December 31, 2021, the Ontario Securities Commission (OSC) issued a stark disclaimer to Binance indicating to its users that it can continue to operate in the province. Another imposter in a long list.