A Look at Binance Coin – What’s Driving Moves in BNB?
Arslan Butt • 1 min read
Binane Coin (BNB) has had an active February, with prices surging by over 850% over the past few weeks, sending it to rank four among the top cryptocurrencies based on its market cap. Since hitting a high of $270 last week, the price of BNB eased below the $200 level, but has since reclaimed this level and risen higher.
At the time of writing, BNB is trading at around $234, and moves seem to indicate a cautiously bullish outlook among traders for now. What started off as being exclusively a utility token to be used to pay for transactions on the world’s largest cryptocurrency exchange – Binance, soon came into its own, making significant gains with the increased adoption of the Binance Smart Chain.
Analysts forecast BNB and the Binance blockchain network to offer up serious competition to Ethereum as an ecosystem that can support DeFi and emerging blockchain projects looking to raise funds. An increase in the TVL on Binance Smart Chain can drive further bullishness in BNB, sending it to greater highs in the near future.
On the other hand, however, Binance Coin does face some downside risks owing to the highly volatile and unpredictable moves in the overall cryptocurrency market. The recent slide in Bitcoin and Ethereum prices could make investors and new entrants wary about trading cryptocurrencies.
A reduction in trading volumes on the Binance exchange also contribute to bearishness in the BNB price. In addition, while BNB and Binance Smart Chain recently benefited from a spike in Ethereum’s gas fees, the development of ETH 2.0 which promises lower transaction costs and network congestion could take away some of the shine from Binance’s offerings, driving further weakness in Binance Coin.