Binance Coin reaches 37% of Ethereum’s market cap: 3 reasons why BNB is soaring
Binance Coin (BNB), the native cryptocurrency of Binance Chain and top digital asset exchange Binance, is starting to close in on Ether (ETH) in market capitalization.
As of Monday, BNB is valued at $87 billion at the price of just under $600. The valuation of Ether is hovering at around $246 billion, which is 2.8 times larger than that of Binance Coin.
$BNB volume > $BTC volume.
Congrats @Binance @cz_binance pic.twitter.com/vLkdGBnnIt
— Joe Grech (@JoeBGrech)
The technical momentum of BNB has been so strong that it briefly surpassed the volume of the BTC/USDT pair on Binance.
This trend is significant because Tether (USDT) is the biggest stablecoin in the global market, and the BTC/USDT pair is one of the most liquid trading pairs in crypto.
Why is Binance Coin surging so hard?
Binance Coin has been rising due to the three key reasons: an overall uptick in the popularity of Binance Smart Chain, strong technical momentum and the gap between BSC and Ethereum projects.
In recent weeks, the transaction volume on Binance Smart Chain has tripled the volume of the Ethereum blockchain.
Particularly in Southeast Asia, the usage of Binance Smart Chain has been rising, according to Coin98, the biggest venture capital firm in Vietnam that is building a DeFi ecosystem targeted at Asia.
Considering that the price of BNB was much lower than Ether until late March, this discrepancy between BNB and ETH likely made BNB a compelling trade.
There is also a big gap in valuations between the Ethereum DeFi ecosystem and Binance Smart Chain, which has been fueling a large portion of the demand for BSC projects.
This has caused the value of BNB to rapidly rise over the past two weeks, while ETH has been relatively stable at just over $2,000.
A journalist who covers crypto in China known as “Wu Blockchain” explained:
Traders foresee BNB to undergo a more explosive rally in the foreseeable future if it breaks out against Bitcoin.
Kaleo, a pseudonymous cryptocurrency trader, said:
Will the capital rotate back into Ethereum?
However, Kelvin Koh, the managing partner at Spartan Group — one of the largest DeFi-focused funds in Asia — said that for now, he expects the capital to rotate back into Ethereum as BSC projects near the valuation of ETH equivalents.
He emphasized that there is a huge valuation gap between BSC and Ethereum projects. This gap could be making BSC projects compelling to the market. He said:
This content was originally published here.