Binance Coin (BNB) currently ranked the 6th largest cryptocurrency by market cap has had a good run this year. BNB’s performance has been well noted by the crypto community as well as Weiss Ratings, a financial ratings agency. According to Weiss Ratings in a tweet on July 25, 2019, BNB is a success because it is centralized.
BNB Makes Remarkable Leap in Price in 2019
As of press time, BNB is trading at $29.36 with a market valuation of over $4.5 billion. Its year-to-date high has been $39.57 which is quite intriguing on considering its opening price of $6.19 and a market cap of barely $800 million at the start of the year. There’s also its ICO price of $0.10 to contend with. Similarly, BNB kept surging in price despite Bitcoin’s sideways trading in the first few months of 2019.
Weiss Ratings, on the other hand, is of the opinion that BNB’s success can be attributed to its centralized nature. Specifically, the centralized nature of BNB has enabled its creators to constantly create new use cases for the virtual currency. As a result, it has made a positive impact on its market cap.
BNB’s Use Cases on Binance and Binance LaunchPad
The use cases Weiss Ratings has hinted can be associated with BNB’s use to pay fees on Binance, one of the top cryptocurrency exchanges in the world. Users of the Malta-based exchange are incentivized to use BNB instead of BTC to pay fees by offering a 25% discount on trading fees.
In the same manner, BNB has been the major cryptocurrency received by Binance during the token sale of assets such as BitTorrent, Fetch.AI, Celer, and Matic on Binance Launchpad. On March 24, 2019, Binance also announced that its next token launch will be on a lottery basis and not the first-come-first-served system.
Binance’s Quarterly Burning of BNB’s Token
As such, anyone who holds a certain amount of BNB for at least 20 days before the token sale will be able to claim tickets to be a part of the lottery. The news was, however, able to surge BNB’s price at the time by almost 15 percent. There’s also Binance’s strategy of burning a certain percentage of BNB in their reserve allocation on a quarterly basis which has also impacted on the asset’s price.
On the contrary, some members of the crypto space were not in agreement with Weiss Rating’s stance. They opined that centralization should not be attributed to a coin’s success. A user, for instance, said Tether (USDT) is minted in excess before it is used to pump BNB’s price. Another remarked that BNB’s success may be short-lived since regulations could potentially kill it.
