Binance Coin (BNB) market cap is approaching the level of Ethereum network’s native cryptocurrency Ether (ETH).
As of Monday, BNB was valued at $ 87 billion at just under $ 600. The value of Ether is 2.8 times higher than Binance Coin and is around $ 246 billion.
Joe Grech (@JoeBGrech) April 12, 2021
Technically, BNB accelerated so strongly that it exceeded the transaction volume of the BTC / USDT pair on Binance, albeit for a short time.
Why is Binance Coin so active?
Binance Coin is rising for three main reasons: the growing popularity of Binance Smart Chain, strong technical momentum, and the price gap between BSC and Ethereum projects.
In recent weeks, the transaction volume on Binance Smart Chain has tripled the transaction volume of the Ethereum blockchain.
It is said that the use of Binance Smart Chain has increased, especially in Southeast Asia. This discrepancy between BNB and ETH made BNB a true competitor, given that the price of BNB was much lower than Ether until the end of March.
There is also a huge gap in valuations between the Ethereum DeFi ecosystem and Binance Smart Chain, which feeds a large portion of the demand for BSC projects.
This has caused the BNB value to rise rapidly over the past two weeks, while ETH has remained relatively stable at just above $ 2,000.
A journalist writing about cryptocurrencies known as “Wu Blockchain” in China he explained as follows:
“BNB surprisingly surpassed $ 600. Ethereum transaction fees fell to the lowest level in the last month. Although BSC transaction volume is three times that of Ethereum, two are not competing. BNB’s top 10 addresses amount to more than 88 percent. At ETH, that’s 20 percent. The future of Ethereum depends on the EIP-1559 and 2.0 updates. Binance’s only concern is government sanctions and hackers’ attacks. “
Traders predict that if the BNB / BTC pair strengthens, BNB could enter a bigger rally in the near future.
Cryptocurrency trader Kaleo he wrote:
“If the BNB / BTC pair breaks upward resistance, it could reveal the explosive momentum needed to approach $ 1,000.”
Will investments be directed towards Ethereum?
Kelvin Koh, managing partner of Spartan Group, one of the largest DeFi-focused funds in Asia, said he expects the existing capital to turn from BSC projects to Ethereum.
Emphasizing that there is a large valuation gap between BSC and Ethereum projects, the expert argued that because of this gap, BSC projects are pushing the market:
“BSC has its own DeFi ecosystem… There are so many big coins to discover on BSC such as XVS and CAKE. If you are wondering why Ethereum DeFi currencies are dormant, it is because of the valuation gap between BSC coins and their versions on ETH. ETH will not revert to DeFi currencies. “