Notwithstanding Binance’s difficulties with authorities, BNB has surged to $489.50, its highest level in two years.
After reaching its highest point in two years on March 8 at $489.50, the price of BNB increased by 62% in just thirty days.
Though advances in the overall market may have contributed to this change, BNB’s position as the third-largest cryptocurrency by market capitalization – excluding stablecoins – was cemented.
Some traders believe that a price breach above $500 for BNB is inevitable, but will the surge hold?
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After Binance’s founder and former CEO Changpeng “CZ” Zhao entered a plea agreement with a US federal court in November 2023 for permitting exchange users engaged in illegal activity to transfer “stolen funds” through the exchange, many investors expressed doubts that BNB could ever regain the current levels.
Given that the Binance exchange ecosystem contributes to the BNB token’s value, CZ’s decision to resign as CEO at the moment raised questions about the token’s future.
“Amid CZ’s legal woes, doubts lingered over BNB’s future, yet Binance’s settlement offered a glimmer of hope.”
Although CZ’s trial is still pending sentencing, some of the uncertainty around BNB’s future was reduced by Binance’s December 2023 settlement with the U.S. Commodity Futures Trading Commission (CFTC).
It was required of Binance to put in place a formal corporate governance framework with audit and compliance committees. CZ was mandated to stay in the country till his sentence date in the interim.
Numerous prominent exchanges, including Coinbase, suffered multiple disruptions as bitcoin volumes surged to their greatest levels in a year, drawing criticism from a variety of sources.
On social media, cryptocurrency investor @Rampage_Calls bemoaned Coinbase’s regular disruptions, yet Binance trading supposedly continued uninterrupted.
Former Google software engineer and Bitcoin enthusiast Vijay Boyapati compared Coinbase’s incapacity to supply liquidity during market rallies to that of MtGox, the defunct exchange that dominated the market until a hack caused by improper structure.
Citing similar problems that beset the exchange during the 2017 cycle, Vijay implored Coinbase’s co-founder and CEO Brian Armstrong to “fix this ASAP.”
At least in comparison to Coinbase, Binance’s strong trading engine and servers play a significant role in the company’s performance, which has allowed it to lead the market in spot and futures trading volumes.
As such, this movement aims to entice users to join in order to gain access to the exchange’s token launch platform and lower trading fees.
Nonetheless, the BNB Chain provides a large portion of BNB’s usefulness, therefore it makes sense to examine network activities.
Total value locked (TVL), a measure of the network’s smart contract deposits, dropped by 7% in BNB terms during the previous 30 days.
12.8 million BNB have been placed in the decentralised applications (DApps) of BNB Chain, according to data, a substantial decrease from the 19.4 million that were recorded in the beginning of 2023.
In contrast, over the last 30 days, Solana saw a 20% TVL rise, and the Ethereum network TVL climbed by 3% in ETH terms.
It might be argued that some DApps don’t require significant deposits, including NFT marketplaces and decentralised finance (DeFi) aggregators. As a result, monitoring volume activity offers a more accurate indicator of network usage.
BNB Chain’s 41% DApp volume gains over the last 30 days and, most notably, its overall placement of third place seem to justify the recent price rally.
In addition, BNB Chain stands out when looking at the quantity of active addresses using its DApps – 5.6 million, to be exact.
Whether BNB is ready to retake the $500 level will require a more in-depth examination of the calibre of BNB Chain’s activities and the possible effects on the Binance exchange following CZ’s trial.
However, the preliminary data is optimistic.
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