Binance Coin (BNB) at $500 on Growing NFT Involvement
During the latest upward leg of the market, the importance of Binance trading pairs once again proved its worth. The Binance exchange, one of the important hubs for liquidity creation, is giving a boost to both BTC trading and altcoins.
Binance Coin (BNB), the native asset with multiple functionalities, is hovering near the $500 level again. BNB traded at $496.72 on Tuesday, while getting “flippened” by Cardano (ADA). The dynamic conditions sent ADA to the third spot on CoinMarketCap, as the asset headed for the $3 record.
One of the drivers for BNB growth is the value locked within DeFi projects. The Binance Smart Chain environment now locks in more than $21B in value, fueling exchanges like PancakeSwap, as well as some forms of yield farming. BNB is still less widely used in comparison to ETH, where total value locked (TVL) still hovers around $82B.
Binance Listings Keep Driving Altcoin Rallies
Binance trading pairs for altcoins provide some of the deepest order books for some of the recent price rallies. A fast Binance listing can boost an altcoin to prominence within weeks, and cause rapid trading shifts.
Even the current ADA rally is getting a boost from the ADA/USDT trading pair, which takes up more than 17% of all trading volumes.
One of the most recent listings for Binance was WAX (WAXP), a brand-new NFT platform. The listing was immediately reflected with a significant price swing, sending WAXP from $0.13 to as high as $0.45. WAXP then slid by 13% overnight, showing early trading can be volatile.
The Binance exchange offers different listing tiers, though in the past months it has added coins with significantly liquid USDT pairs, such as ICP and TEL.
Is Binance Manipulating the Market
The recent WAXP listing caused discussions on price moves apparently happening before the official trade opening for retailers. This has caused accusations of market manipulation or insiders affecting the market.
Binance has officially denied trading against its clients, but in the past, bots have apprehended the changes made right before a listing, often causing significant price moves.
For now, the Binance exchange has been careful to avoid too much volatility for altcoins, often delisting illiquid assets or limiting the market for some projects.
Binance Boosts NFT Presence
After making forays into DeFi, Binance Launchpad is now expanding into NFT platforms. The boom of those projects keeps driving demand for BNB as a source of liquidity for auctions.
NFT projects are too numerous to describe. But now, the central activity hub on Binance Smart Chain, PancakeSwap, will offer an NFT marketplace and platform.
The crossover from DeFi to collectibles will further increase usage for BNB tokens, which are also compatible with Binance Smart Chain.
In the past month, Binance Smart Chain has shown its capacity for high transaction throughput. BSC carries between 6 and 13M transactions, with more than 120,000 active wallets at some points.
The potential for speedy transactions can help boost both decentralized swaps and NFT trading, overcoming the limitations of high fees to mint new collectibles.
Can BNB Move Higher
At $500, BNB has returned closer to its all-time high above $662. The current rally is happening on much lower volumes, and higher activity can boost prices.
The asset manages to achieve volumes above $3.3B, still far from peak prices above $5.7B in a single day. BNB is still not among the most influential assets in terms of market capitalization, but it is connected to multiple markets and important crypto infrastructure.
Extreme price predictions see BNB moving as high as $1,000 in case the 2021 bull market continues in the coming months.
What are the Risks for BNB Users
Using BNB, Binance Chain and Binance Smart Chain opens the door to multiple projects with significant liquidity.
However, one of the major risks remains rug pulls and smart contract exploits. The risk is expanding due to the potential for regulatory restrictions. For now, using those blockchains has been open to international users, but a crackdown on tokens is not excluded.
The other risk includes attacks with fake tokens. Multiple assets can be minted for free on the Binance Smart Chain, in an attempt to imitate valid tokens and defraud buyers.
Fake tokens also included popular projects like Shiba Inu (SHIB). PancakeSwap also includes smart contracts offering fake tokens, which then cannot be swapped back. The best approach is to pick the official tokens vetted by Binance Launchpad, or gain exposure to the DeFi space through the PancakeSwap (CAKE) token.
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