Binance Coin (BNB), the digital currency for the crypto exchange Binance, has reached a new all-time high against Bitcoin (BTC). The digital currency has been in a bull trend since it reached a bottom in December 2018. There are different factors that influenced this outcome in the past months.
Binance Coin Reaches New All-Time High
Binance Coin seems to be unstoppable. The digital currency has been growing since December 2018 when it reached a bottom of $4.5. In the last 24 hours, it moved to over $24. That represents a price increase in fiat terms of 433% in just a few months. Indeed, Binance Coin has been the best performing digital asset among the top 20 since the beginning of the year.
However, in terms of Bitcoin, BNB has reached 450,000 Satoshis, which represents a new all-time high for the digital asset. Never before, BNB users were able to purchase as many satoshis as now with each BNB token.
In order to understand why Binance Coin started to grow, we need to talk about Initial Exchange Offerings (IEOs). Instead of performing an Initial Coin Offering (ICO), which have been involved in controversies, projects are moving towards IEOs. Exchanges carefully analyse the projects that want to launch their tokens and put the coins to sell on their platforms.
Binance became a pioneer with IEOs. Using Binance Launchpad, users could purchase their IEO tokens paying with BNB coins. This is why before an IEO was held, the price of BNB increased as well. Nonetheless, after the IEO ended, BNBs were dumped to the market. This is why Binance has changed the system for a lottery one in which the coins will have to be held for about 20 days, which gives more stability to the price.
Meanwhile, Binance performs quarterly burns of BNB coins with 20% of the profits that the exchange has. With these funds, the firm purchases BNB coins and burns them, reducing the total supply of the coin. This will be performed until 50% of its supply is burned. This has an effect on the price of the digital asset that would have a larger buying pressure.
Finally, Binance has also decided to launch its own blockchain network called Binance Chain. BNB is going to be the native asset of this blockchain and it will stop running on top of Ethereum (ETH) as it has done until now.