In the context of market capitalizations Ether(ETH) is starting to close up Binance Coin (BNB), the native cryptocurrency of the Binance Chain and the top digital asset exchange Binance.
On Monday, BNB’s value is $87 billion, at less than $600. The value of Ether is approximately $246 billion, 2.8 times that of Binance Coin.
BNB’s technical dynamic was so strong that the volume of the BTC/USDT Binance Pair was briefly outnumbered.
This trend is important since Tether (USDT) is the world’s largest stable coin, and the BTC/USDT pair is one of the crypto liquid trading pairs.
Why is Binance Coin surging so hard?
Binance Coin increased because of the three main reasons: the overall increase in Binance Smart Chain popularity, its strong technical dynamism and the gap between the BSC and the Ethereum projects.
In the last weeks, the volume of transactions in the Ethereum blockchain has tripled.
According to Coin98, the largest venture capital company in Vietnam building a DeFi ecosystem targeted at Asia, in particular in South East Asia, the use of the Binance Smart Chain has increased.
Given that the price of BNB until late March was much lower than the price of Ether BNB and ETH probably made BNB an attractive trade.
The Ethereum DeFi eco-system and the Binance Smart Chain also have large valuation gaps, which have fueling a large share of the demand for BSC projects.
In recent weeks, BNB’s value has increased rapidly while ETH has remained relatively stable for only a little more than $2,000.
A journalist in China known as “Wu Blockchain” explained that he covered cryptography: “BNB split an amazing $600, but Ethereum’s fees dropped in a month to its lowest point. Although BSC’s transaction volume is 3x the volume of Ethereum, the two of them are not competitive. The top ten BNB addresses contain over 88%, while Eth is 20%. Ethereum’s future depends on EIP-1559 and 2.0 upgrades. Only government suppression and hackers are two things about which Binance needs to worry.”
Traders plan to hold a more explosive rally against Bitcoin in the foreseeable future.
Kaleo, a cryptocurrency trader pseudonymous, said:
“$BNB breaking above this level on the $BTC pair could lead to the type of explosive momentum needed to actually close in on $1,000.”
Will the capital rotate back into Ethereum?
But Kelvin Koh, the Spartan group managing partner, one of Asia’s largest deFi-focused funds, claims that, as BSC projects near ETH equivalent valuation, he expects the capital to revert back to Ethereum for now.
He stressed that between BSC and the Ethereum projects there is a huge valuation gap. This gap might make market-oriented BSC projects. He said:
“BSC has its very own DeFi Summer…so many BSC Alpha ($XVS, $CAKE) to find. If you wonder why Ethereum DeFi coins are glossy, it’s due to the huge valuation gap between the BSC and the ETH equivalents. The money doesn’t rotat back to ETH DeFi coins until this gap closes.