The market cap tussle for the third spot has already commenced. Yesterday, Binance Coin took over Cardano on CMC’s ranking chart. The flip was momentary and ADA ended up re-claiming its spot right next to Ethereum. Even so, the market cap difference was only around $600 million at the time of writing, indicating that the battle was still on.
A few from the community, however, believe that BNB inherently doesn’t have any value. Consider pseudonymous investor and analyst Mr. Whale, for instance. Opining on the flip, he recently tweeted,
BNB is now the 3rd largest coin on the entire market.
Binance is banned in 37+ countries, has dozens of fraud and price manipulation lawsuits, and a variety of other scandals.
In reality this coin is worth zero, but this goes to show you how spoofed this market truly is.— Mr. Whale (@CryptoWhale) October 2, 2021
Well, it is a known fact that Binance has been in dire straits lately on the regulatory front. In fact, after being on the regulator radar of the U.K., Thailand, Japan, Cayman Islands and Ontario, the platform lost several crucial partnerships. Amid the aforementioned dud, however, BNB HODLers have remained calm.
Evaluating where BNB actually stands
From a purely metric-driven perspective, the press-time valuation of the Binance’s native coin was inequitable. Consider this – The MVRV ratio of BNB has remained in the negative zone of late. The market-value-to-realized-value, as such, is used to get a sense of when the price of an asset is above or below the ‘fair value.’ Thus, the current projection on the charts only highlight the undervalued nature of the alt. By and large, this means that BNB HODLers are currently losing more than usual in the market.
Despite the not so impressive incentive, the average age of BNB coins have consistently been rising since mid-May. Two key coin age metrics – Mean Coin Age and Mean Dollar Invested Age, highlighted the same. Both the aforementioned metrics essentially underline the average age of all the coins on the blockchain.
Apart from the recent hiccup towards the end of September, the uptrend has been consistent. As the average age of dollars invested in BNB grows older [or increases], it can be argued that the coins are becoming more dormant. In other words, the rising slopes indicate a network-wide accumulation trend. Thus, it can be stated that the old coins have matured and now become a part of the long-term portfolio of market participants.
Binance has made rapid strides in the DeFi space as well. In fact, a recent article highlighted how Binance has consistently been competing with Ethereum on various fronts.
The network has additionally, been able to accommodate new users. The number of unique addresses on the smart chain has evidently recorded a steep slope. Notably, the mainstream adoption became concrete only by the end of February this year and the regulatory uncertainty didn’t hamper aforementioned trend.
With a daily increase of 143,364, the number of unique addresses stood over 97 million at the time of writing. Further, based on the trading volume, Binance remains to be the most preferred exchange. Data from CoinGecko highlighted the same.
Thus, despite the hurdles on its path, Binance has been marching ahead one step at a time and making its case stronger with every passing day. Despite the not-so-juicy short-term performance, BNB has witnessed a substantial growth of over 1418% in the past year. Thus, the “zero” valuation claim remains to be baseless at the moment.
Binance proposes a real-time token burning mechanism to boost BNB value
- Binance has proposed the BEP-95 aimed to burn a percentage of transaction fees as a deflationary measure.
- BEP-95 will occur alongside the quarterly token burn and well after the 100 million token supply is achieved.
Binance Smart Chain (BSC) is taking further steps to incorporate an additional deflationary mechanism to increase token valuation. As announced today, Binance (BNB) is introducing a new Binance Evolution Protocol (BEP) known as BEP-95. The BEP stands out from the network’s occasional token burns since it introduced a real-time burning mechanism.
According to Binance, a fixed portion of gas fees collected by validators in each block will be sent to the burn address. The ratio initially set at 10 percent, is adjustable according to changes proposed by the Binance community. BSC validators get to vote on community proposals, where voting power is based on staked BNB.
For a proposal to be reviewed by the validators, it has to receive a minimum deposit of 2,000 BNB (mainnet). All BNB is returned to holders after the finalization of the voting process. A proposal that wins is that which gathers 50 percent of the total voting power on the mainnet. Binance notes that voted-upon parameters are implemented immediately.
Details of Binance BEP-95 token burning mechanism
BEP-95 became relevant as it speeds up the BNB token burn, and makes the network increasingly decentralized. The BNB supply cap is about 168 million tokens and Binance intends to burn until 100 million tokens remain in circulation. This will take about 5-8 years to complete, according to Binance. The network’s most recent quarterly burn wiped out over 1 million tokens, worth about $639 million, from circulation.
However, the latest update from its blog now says the BEP-95 burn “will continue functioning” even after the above target is attained. With the burn, Binance expects the intrinsic value of the BNB token to increase in tandem with demand. The network notes that validators and delegators may receive fewer tokens from staking, but the “fiat-denominated value of their rewards may increase.” Moreover, BNB has multiple use cases that benefit all holders of the token.
Currently, BEP-95 is in the draft stage and the network is yet to give a specific date for its implementation.
Several blockchains use the crypto-burning mechanism to create token scarcity and a subsequent increase in token value. Ethereum, for instance, uses the EIP-1559 for this purpose.
BNB price action
BNB, the fourth-largest cryptocurrency by market cap, was trading at $494 at press time, according to our data. The token has gained 0.8 percent in the day, and 4.8 percent week-over-week. Similar to other digital assets, BNB has rallied fueled by the Bitcoin-led gains. Crypto investor and YouTuber Lark Davis expects “good things” for the BNB price following its launch of a $1B growth fund.
Binance Destroys $639 Million Worth of BNB
Binance’s burning a record $639 million worth of BNB has failed to push the price significantly higher
Leading cryptocurrency exchange Binance has announced the completion of its 17th quarterly burn.
The company destroyed more than 1.3 million BNB tokens that were cumulatively worth roughly $639 million.
This marks Binance’s biggest quarterly burn to date in dollar terms.
“Burning” is the process of shrinking the token’s circulating supply. Binance is on track to destroy 50% of all BNB tokens every quarter.
The number of tokens that are destroyed each quarter is calculated based on the trading volume on Binance’s crypto-to-crypto exchange.
As reported by U.Today, Binance burned $393 million worth of BNB in the second quarter and $595 million in the first quarter of 2021.
The BNB price added a meager 1.2% after the burn was announced before quickly trimming even such modest gains.
Last week, BNB recorded a double-digit price spike after announcing a $1 billion growth fund.
Binance (BNB) Price Analysis: On-chain Data Shows Rise In Demand for the BNB Coin, Will BNB Outperform BTC?
Why Is Binance Coin (BNB) Price Surging? Among many reasons recent 1 billion USD fund for project development of DApps on the Binance Smart Chain [BSC] is one major catalyst fueling the BNB price.
The crypto data tracking service, Santiment spotted an increase in demand for BNB on wallets with BNB whales acquiring roughly 412K BNB in recent weeks. The move shows that big money remains bullish on the BNB coin in the face of regulations.
The BNB burn protocol is another interesting bullish catalyst for the BNB token price as the bulls hold on to their positions in wait for this event.
A dive into the price chart should also give us further insights into significant patterns and technical drivers of the BNB price.
Binance (BNB) Weekly Chart Analysis
Both bearish and bullish divergence price vs. oscillator patterns keeps the BNB price hovering within the $680 resistance and $211.70 support.
The recent bear trap candlestick pattern on 20 September prepares a bullish tone for a price increase beyond the $509.90 resistance and heading to the $680.00 ATH.
The RSI  couldn’t reach level-25, which therefore represents a bullish outlook for the BNB price.
A breakout above the $680 resistance could see the BNB price rising into four-figure price zones for the first time.
Binance (BNB) Daily Chart Analysis
Following a collapse of hidden bullish divergence trend lines on 07 September ‘21, the BNBUSDT price slumped by roughly 23%, then quickly reversed to the upside by an opposing regular bullish divergence on 28 September ’21.
The bulls have re-established control as the RSI enters the overbought area for the second time at press time.
Meanwhile, an impending bearish divergence setup is projected around the $518.90 resistance. On the other hand, a surge in bullish momentum may see the RSI shooting beyond the 85-level, therefore, nullifying the anticipated reversal pattern.
Binance (BNB) 4HR Chart Analysis
The 4HR time frame follows a similar price dynamics as the daily time frame with an opposing regular bullish divergence on 12 October ’21 at 08:00. This led to a parabolic upswing for the BNB price and soaring above the 07 October 12:00 resistance [$446.60].
Raging bulls could use the old $446.60 resistance as new support, which is a possible upward scenario for the BNB price. A prolonged correction phase could see the price dropping to the $424.00 support.
Binance (BNB) Intraday Levels
- Spot rate: 468.4
- Mid–Term Trend [H4]: Strong Bullish
- Volatility: High
- Support: $392.20, $424.0, and $446.60
- Resistance: $473.0 and $518.90