Binance Coin (BNB) experienced a notable increase of 7.34%, reaching its highest level in six months and closing the market capitalization gap created by Solana’s recent gains. Before December 23, BNB held the third position among the largest cryptocurrencies, but Solana’s impressive 50% gains in seven days changed that ranking. The question now is whether it can maintain a market capitalization exceeding $46 billion to reclaim its third spot.
The value of the BNB token is significantly influenced by reduced transaction fees and exclusive launchpad offers and services from Binance. Despite initial concerns about the company losing market share due to regulatory challenges faced by its founder, Changpeng Zhao, the recent interaction of the exchange with the U.S. Commodity Futures Trading Commission (CFTC) has diminished the risk of regulatory shutdown.
However, BNB faces selling pressure due to the substantial concentration of ownership among the founders and the Binance team. The lack of transparency in the initial distribution of BNB tokens and changes in the token burn mechanism over the years have eroded investor trust.
The recent surge in BNB Chain activity supports the price movement, with an increase in transactions and decentralized application (DApp) volume on the Binance Smart Chain (BSC). However, while BSC Chain has a Total Value Locked (TVL) of $3.6 billion, representing less than 13% of Ethereum’s TVL, the growth compared to other blockchains like Solana and Avalanche is more modest.
Comparing performance metrics, Ethereum and its Layer-2 scaling solutions remain leaders in DApp volume, accumulating over $46.4 billion in the last 30 days. While BSC Chain experienced a 6% increase in volume during the same period, the growth in the number of active addresses participating in DApps is 7%, which is lower than Ethereum’s 12% increase.
Price Evolution of BNB and the Rest of the Top
BNB leads the ranking of the biggest gainers of the day with a growth of 7.34%. The others barely reached 2%, and some experienced a decline. Bitcoin (BTC) rose again and is trading at $43,198, with a growth of 1.36%. Ethereum (ETH) approaches $2,280 after a rise of 1.77%.
Solana (SOL), on the other hand, dropped to $113.4 with a 1.3% decrease in its value. XRP (XRP) currently trades at $0.6295, growing by 1.08% in the last session. Cardano (ADA) follows closely with a value of $0.6139 and a modest increase of 0.58%. Avalanche (AVAX), on the other hand, was the biggest loser of the day, descending to $44.70 with a 3.7% price decline.
The price surge of BNB can be partially attributed to increased activity on the BSC Chain, but the sustainability of its market capitalization position will depend on further momentum and participation in the network. Additionally, addressing transparency and credibility issues is crucial for its ongoing success.
