Binance Coin Rally Reminds the World of Bitcoin’s Rise to $20,000

Binance Coin Rally Reminds the World of Bitcoin’s Rise to $20,000
Binance Coin Rally Reminds the World of Bitcoin’s Rise to $20,000
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The value of Binance Coin, the native coin of Binance cryptocurrency exchange ecosystem has tripled in just three months, even as questions about the token’s status as security are looming larger.

How has Binance Coin fared in 2019?

According to Bloomberg, 2019 has been a great year for Binance Coin (BNB). The world’s largest cryptocurrency exchange, Binance, encourages its users to pay their trading fee in BNB. The token issued by the Malta-based company has tripled in value in the last three months. Trading at around $15, the currency is experienced an unprecedented rise in valuation, even as most of its rivals shaved off 90 percent of their value by the end of 2018.

Binance Coin

On Friday afternoon, the BNB coin is worth $15.18, with a market cap of $2.14 billion which makes it the 7th largest digital currency in the world. In the last quarter of 2017, Bitcoin, the largest cryptocurrency in the world, experienced a similar fate. After moving swiftly past $5000 in October, the coin surpassed expectations and touched $20,000 mark on some exchanges

The coin is closely related to Binance exchange, which experienced a dramatic turn in fortunes, becoming one of the giant exchange just months after birth, thanks to the 2017 crypto boom.

The coin was first launched in July 2017 as part of Binance’s ICO, and the company uses some of its profits to buyback and destroy BNB coins. According to the company’s founder Changpeng Zhao, they don’t want prices to drop and try to align their moves with the investors. While Binance users utilize BNB to pay trading fees, several companies are now turning to the virtual currency to launch initial coin offerings and get listed on the most liquid exchange in the world.

Binance currently witnesses around $1 billion in daily trade volume. Multicoin Capital Management’s managing partner Tushar Jain commented,

“This is the best executing team in crypto. We expect to hold them for the foreseeable future.”

The securities problem with BNB

Share buybacks are a well-known phenomenon in traditional securities markets as well. As Binance is following the same path, it leaves space for speculation- is BNB really security? If yes, then the company will be subject to the same regulations as any other public company in the jurisdictions its operators in. Zhao says that it isn’t, adding,

“I don’t think that there’s any regulation against destroying assets you have yourself. In the worst case, we can stop the burning process.”

The exchange is currently focusing on its own public blockchain dubbed Binance Chain. As soon as it is ready, which will likely happen in the first half of 2019, BNB coins will be moved from Ethereum blockchain to this new public ledger. Though the company doesn’t release audited financial results, it made $400 million in 2018, a relatively rough year for crypto.  While it has 130 volunteers called Binance Angels are keeping themselves busy by organizing MeetUps and spreading the holy grail of BNB coin.

About Viraj S

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Viraj loves to write and express his views on anything related to Crypto. He has been covering Crypto for more than two years now. He likes Bitcoin and Cardano. He also writes on Finance, Healthcare, and Technology among other stuff. He can be reached by e-mail on viraj@insidebitcoins.com