Binance Coin (BNB), the original cryptocurrency from the Binance chain and the best Binance digital asset exchange platform, has begun to deal with market cap Ether (ETH).
As of Monday, BNB is valued at $ 87 billion, just under $ 600. Ether is valued at about $ 246 billion, which is 2.8 times the value of Binance.
BNB’s technical momentum was so strong that it briefly exceeded the volume of the BTC / USDT pair on Binance.
This trend is significant because USDT is the largest stable currency in the global market and the BTC / USDT is one of the most floating trading pairs in cryptocurrencies.
Why does Binance coin fluctuate so much?
Binance coin has grown for three main reasons: the general rise in popularity of the Binance smart chain, strong technical momentum, and the gap between the BSC and Ethereum projects.
Binance Smart Chain transaction size. Source: BSCScan.io
In recent weeks, the volume of transactions on Binance Smart Chain has tripled the size of the Ethereum blockchain.
The use of Binance Smart Chain has increased, according to Coin98, Vietnam’s largest venture capital firm building a DeFi ecosystem targeting Asia, especially Southeast Asia.
Given that BNB’s price was much lower than Ether as of the end of March, the mismatch between BNB and ETH likely made BNB a compelling bargain.
There is also a large valuation gap between the Ethereum DeFi ecosystem and Binance Smart Chain, which has increased demand for BSC projects.
This has led to a rapid rise in the value of BNB over the past two weeks, while ETH has remained relatively stable at just over $ 2,000.
A journalist covering cryptocurrencies in China known as “Wu Blockchain” explained:
BNB surpassed a staggering $ 600, but Ethereum fees fell to their lowest level in one month. Although BSC’s transaction volume is 3 times that of Ethereum, it is not in a competitive relationship. BNB’s Top 10 Headlines have more than 88% and Eth has 20%. Ethereum’s future is based on EIP-1559 and 2.0 updates. The only two things Binance has to worry about are government repression and hackers. ”
Traders expect BNB to see further explosive growth in the foreseeable future if it breaks out against Bitcoin.
Kaleo, a pseudonym cryptocurrency dealer, said:
“A break of the BNB dollar above this level of the BTC dollar pair could trigger the explosive momentum needed to actually approach $ 1,000.”
One-Day BSC / BTC Rate Table (Binance). Source: TradingView.com, Kaleo
Will the capital return to Ethereum?
However, Kelvin Ko, managing partner at Spartan Group – one of the largest DeFi-focused funds in Asia – said he is currently expecting capital to return to Ethereum as BSC gets closer to evaluating ETH formulas.
He emphasized that there is a big gap in the evaluation of BSC and Ethereum projects. This gap can make BSC projects compelling to the market. He said:
BSC has its own DeFi Summer … a lot of alpha’s to discover BSC ($ XVS, $ CAKE). If you are wondering why Ethereum DeFi coins are bored, it is because of the huge valuation gap that still exists between BSC coins and their equivalents. Until this gap is closed, the funds will not be returned to ETH DeFi tokens. “