BNB, the native token of BNB Chain and the broader Binance ecosystem, has hit an all-time high (ATH) this week after surpassing $800. The milestone attests to the significant progress Binance has made in its relentless quest to expand the token’s utility and integrations. But there’s also another reason why BNB’s ATH should be a cause for cheer, even for those not holding the asset: it may be the first signs that an altcoin season is coming.
BNB Goes ATH
On July 23, BNB hit its all-time high of over $800 per token, giving it a market cap of around $112B. Not bad for a token that launched eight years ago priced at $0.15 and which is now a top five crypto asset. During the intervening period, Binance and BNB have both been on quite the ride, complete with the ups and downs that are characteristic of crypto. But lately, it’s been almost exclusively Up Only for the Binance ecosystem and this progress has been reflected on the charts as BNB’s momentum looks poised to send it higher still.
From a technical perspective, there are plenty of reasons that can be attributed to BNB’s multi-year ascent. The token boasts a Sharpe ratio of 2.5, indicating that for every dollar of risk taken, the return was $2.5. This means that BNB has experienced significantly lower drawdowns compared to most cryptos and traditional market indices, offering investors a more stable and attractive risk-reward profile over the past five years. It’s not quite Bitcoin, but it is BNB – the second “B” former Binance CEO CZ used to jokingly remind his followers not to bet against.
But putting its superior Sharpe ratio and relatively low volatility aside, there may be a simpler reason why BNB has broken out in the past week: it was its turn. Bitcoin has done Bitcoin things all year. And in recent weeks, ETH has finally started to move up. The next candidate on the list is BNB, both on account of its market capitalization and deep integration. BNB is everywhere, and unlike BTC, its holders are even willing to use it for payments and rewards.
BNB Utility Fuels Value Flywheel
It would be fair to say that BNB began life as an exchange token. It would also be fair to say that it has long since escaped that box. While Binance’s shadow still looms large over the exchange landscape, using BNB to obtain discounted trading fees is just one use case among many. As the Binance ecosystem has expanded over the last five years, so have the places where BNB is accepted. It’s still an integral part of Binance’s global exchange and BNB Chain of course, but it’s also transcended these ecosystems to gain its own trajectory.
Beyond blockchain, BNB is expanding into real-world use cases like payments via Binance Pay and travel bookings on Travala.com, bridging digital assets with everyday life. Institutional adoption is also growing, with corporate treasury demand even surpassing Ethereum’s. Supporting this ecosystem is BNB’s deflationary tokenomics: an auto-burn mechanism has permanently removed 31% of the total supply, enhancing the notion of scarcity and driving long-term value.
On Binance’s centralized exchange, BNB holders get their share of perks including access to token sales and staking opportunities that lock up supply and incentivize long-term holding. Meanwhile, BNB Chain’s multi-layer framework, including its Layer 1 as well as the opBNB Layer 2, continue to drive demand for the native asset. Elsewhere it’s being used in everything from decentralized storage on Greenfield to serving as DeFi collateral. Outside of ETH, no other asset has this level of everyday utility and adoption. And that’s why BNB is flying.
Wen Alt Season?
While there’s no question that BNB has followed BTC and ETH’s lead in rallying strongly, the question of whether this means alt season is imminent has still to be settled. Definitions of this period, during which the long tail of crypto assets outperform majors, vary, but Blockchaincenter’s index holds that when 75% of the top 50 coins have outperformed Bitcoin over the last 90 days, alt season has arrived. Its index currently sits at 39, but briefly flirted with 60 in recent days. We’re not quite there, in other words, but we’re close.
Sentiment among seasoned crypto traders appears to be that alt season will arrive but that it will be shorter than previous cycles. Potentially on course to kick in by early to mid-August, this could see altcoins significantly increase their total capitalization for several months in succession. Despite this, many alts are still down significantly on their previous ATH will struggle to regain this territory – even ETH is still down 30% from its all-time high, despite its bullish performance over the past 30 days. BNB, in comparison, finds itself in the same position as BTC: teasing new highs as the crypto market grinds its way upwards.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
