Binance Coin (BNB) has replaced IOTA to claim the twelfth-most largest cryptocurrency by market capitalization.
At 1300 GMT today, the total market capitalization of BNB was $856.5 million, its best since November 20, 2018. IOTA, at the same time, had a market capitalization of $807.1 million. Both the price charts displayed an inverse performance relationship with each other since January 3. While BNB surged against Bitcoin and US Dollar after the said date, IOTA consolidated downwards. Both the assets exchanged crypto rankings sometime during the January 23 trading session.
Expansion Excites Bulls
On January 16, Binance launched Binance Jersey, a cryptocurrency exchange for its European and UK customers. The company said that their latest expansion would provide fiat-to-cryptocurrency trading of the Euro (EUR) and British Pound (GBP) with Bitcoin and Ethereum.
However, the biggest takeaway from the announcement was Brexit. Binance CFO Wei Zhou claimed that investors in the UK would choose to invest in cryptocurrencies as the country executes its divorce with Europe.
“Expanding the cryptocurrency exchange markets with fiat currencies in the European region is opening new economic opportunities for Europeans as well as freedom from looming Brexit uncertainty where the pound and euro are also in concern,” he said. “Through Binance Jersey, we want to help bridge the crypto-fiat channel for Europe and the U.K. as part of our global expansion to support broader cryptocurrency adoption.”
In a broader sense, financial market considers expansions a sign of bullish momentum. As Binance makes it move to enter new territories, its likelihood of achieving its quarter revenue goals is high. As a result, speculators are feeling comfortable holding its BNB token, even though it is a mere utility coin, not security or equity.
— CryptosBatman (@CryptosBatman) January 21, 2019
Traders are also bullish because of Binance’s plans in the blockchain development sector. The Malta exchange will launch its proprietary ledger dubbed as Binance Chain. According to the company, the new chain would allow companies to start their native tokens and conduct new ICOs.
On the other hand, Binance will launch a decentralized exchange platform sometimes this year. The company earlier posted a preview of the new product that looked similar to their current trading platform. However, by allowing a peer-to-peer trading service, Binance Coin would target more adoption for its BNB tokens.
Decreasing BNB Supply
The BNB’s token economics is another thing that prompt traders to hold the token for longer timeframes. Binance has committed itself to a quarterly BNB burn round, whereby the company burns 20% of its trading fee profits. The burning protocol will conclude when Binance will wipe 100 million BNB tokens it sold during its ICO.
wow, didn’t see this until now. 12 is the new 13.
— CZ Binance (@cz_binance) January 25, 2019
Traders apparently believe that a lower supply against the increasing BNB demand would swell the token’s value.