BNB Chain saw an uptick in deposits and activity, but is the fresh momentum sustainable?
Binance Coin, the native token of BSC Chain (BNB) took a different direction from the wider cryptocurrency market on Dec. 26 by surging 11% to reach its highest level in six months. Although BNB initially struggled to break the $300 resistance, the rally successfully closed the market capitalization gap opened by Solana (SOL).
Before Dec. 23, BNB held the position of the third-largest cryptocurrency (excluding stablecoins). However, SOL's impressive 50% gains over seven days changed that. The question now is whether BNB can maintain a market cap exceeding $46 billion to regain its third spot. Both BSC Chain and Solana, despite their decentralization merits, offer fast and cost-effective blockchains that don't exclusively rely on layer-2 scaling solutions.
A significant portion of BNB token's value comes from reduced trading fees and exclusive launchpad offers and services from Binance. Investors initially feared that the exchange would lose market share swiftly after its founder, Changpeng 'CZ' Zhao, pleaded guilty to U.S. Federal charges on November 21. However, this was not the case, at least until the trial concludes and Binance is required to report all trades to a watchdog designated by the Justice Department. Furthermore, Binance's recent engagement with the U.S. Commodity Futures Trading Commission (CFTC) on Dec. 18 further decreased the risk of regulatory shutdown.
