By
Steve Muchoki
April 18th, 2024
The Binance Coin rises into top 10 after Changpeng Zhao announced about its fixed circulating supply strategies. Strong fundamentals are also partially responsible for the latest gains.
Binance’s native cryptocurrency, Binance Coin (BNB) has shown some impulse in the market recently. On February 5, it posted gains of almost 22% as it roared into the top 10 cryptos by market cap. The move saw it displace the popular Bitcoin SV (BSV) and Cardano (ADA) cryptocurrencies previously ranked above it.
BNB started its surge the night before. The move was catalyzed by the CoinMarketCap’s recalculation of the BNB circulating supply. The recalculation resulted in an immediate boost to the token’s market capitalization while its price remaining unchanged. Early on Tuesday, the Binance chief, Changpeng Zhao, fixed the supply statistics after pointing them out as inaccurate.
The recent rise is leaving the Binance token in a position of retesting its previous BTC all-time high. The BNB token is still going strong currently trading around $8.20 on the Binance-to-Dollar rate (BNB/USD). The latest gains are a continuation of BNB’s ongoing rally that began on January 31 with a low of $6.03. That represents a weekly gain of above 40%.
Fixed Circulating Supply
On Tuesday night, Changpeng Zhao responded to a Twitter user who asked about BNB’s circulating supply. He noted that the token’s supply statistics did not reflect the true number. In every quarter, Binance uses 20% of the firm’s gains from that year to buy and burn some BNB tokens. They plan to continue buying and burning until the 200M supply is halved down to 100M.
Zhao acknowledged that CoinMarketCap had the circulating supply listed as 129M instead of 141M. Several hours later, CoinMarketCap updated the data to represent the true circulation to which Changpeng Zhao responded with:
“200m – burned – frozen (sic) gives you 141m. CMC had a different want to calculate circulating supply, which resulted in 129m, but they made an adjustment for us.”
The adjustment from 129M to 141M resulted in an almost immediate 9.3% increase to the project’s market cap. The spike is evident from the vertical market cap line that rises out with the dollar or Bitcoin valuation in the price charts.
Strong Fundamentals
The BNB surge follows various events that took place on the token launch platform, Binance Launchpad. The platform introduces new cryptocurrencies to the market. The Launchpad successfully completed the token sale of BitTorrent’s BTT token. The January 28, token sale was completed in less than 15 minutes acquiring the BitTorrent team $7 billion.
Also, the launch platform hosted an airdrop round of 5,000 BTT to all eligible investors who did not participate in the main sale. Binance also confirmed the launch of another project on the same Launchpad platform. The new project, Fetch.AI, will support an economic internet model powered by machine learning, artificial intelligence, and blockchain.
The Fetch.AI token sale will begin on February 25 and is scheduled for hosting on the Launchpad platform. These developments and launches may increase the demand for BNB tokens. Thus, the coin appears quite attractive in the near-term. Also, the success or failure of the Launchpad projects may determine the underlying valuation of the BNB tokens in the long-term.
For now, the strong fundamentals are playing a major role in the increasing market capitalization of the Binance Coin.