At the beginning of the year, while bitcoin and other big cryptocurrencies lose value, Binance Coin increased its market value. Since the beginning of the year, the currency accumulated a 227% increase until the closing of this matter. Bitcoin in the same period increased its market value just 37%. In addition, the currency is already the seventh largest in marketcap, smashing giants like the Tether, Stellar, Cardano and Tron. So, these facts lead us to ask, why is the market betting on this asset?
In an article published in Forbes, journalist Billy Bambrough takes an exercise to understand the movement of the market. Let’s look at some of your considerations:
Market on the move
First, the recent success of the binance currency was considered a large vote of confidence in the bitcoins and cryptocurrencies market. “Binance was able to withstand crypto correlations mainly because people buy it as a way to speculate on the growth of the industry,” said Mati Greenspan, senior market analyst at brokerage firm eToro. “If markets are moving, it means people are trading, and Binance has a large share of those volumes.”
Binance handled $ 20 billion in bitcoin between November 15 and December 15 last year, according to data from Chain Open Research. Thus, it became the world’s largest volume exchange, well above OKEX, Coinbase, and Kraken.
Many traders and investors believe that this year’s planned developments, including the Bakkt bitcoin platform and the institutional investment of the world’s largest banks and financial services companies, will return to the market the golden age of the end of 2017.
In addition, it has been a great year so far for Binance. In February, the Hong Kong-based company registered in Malta launched its decentralized exchange (DEX). Binance’s chief executive, Changpeng Zhao, known as CZ, said DEX will prioritize speed, security, and ease of use.
In addition, Binance Chain, the block network for which DEX is based, was designed to scale and process trading volumes similar to the largest centralized exchanges. Some traders and investors prefer DEX as they remove some security and dependency issues from a centralized company.
Following the launch of its DEX, Binance announced a new incentive scheme to assist in its development. CEO CZ offered no less than $ 100,000 in the binational currency as a reward for users testing the network.
Given these positions, it is clear that the market is seeing Binance as one of the companies that will benefit most from a possible market recovery. And this is directly reflected in the exchange’s own cryptocurrency price. These facts show yet another facet of the market: there is quite a rationale involved in investments. That is, it is not pure speculation.