By CCN.com: Year-to-date, the bitcoin price has increased by 44 percent against the U.S. dollar from $3,700 to $5,320, becoming one of the best-performing assets in the global market alongside oil.
The initial 20 percent rally from bitcoin in early April from $4,200 to $5,000 drastically changed the sentiment around the crypto market and investors generally expected bitcoin and the rest of the market to slow down following a strong upside movement.
In the past few days, bitcoin has continued to increase in value, surpassing $5,300 to record a 32 percent increase in price within one month.
The momentum of bitcoin as well as the significant rise of Binance Coin (BNB), the seventh most valuable cryptocurrency in the market, led the valuation of the crypto market to surge by around $70 billion since February.
Can Binance Coin Improve Sentiment Around Crypto?
Since January, in less than four months, Binance Coin (BNB) has surged by 322 percent against the U.S. dollar, becoming the first cryptocurrency to break its all-time high since 2017.
Some traders have suggested that the rally of Binance Coin, triggered by the highly anticipated launch of Binance Chain, may fuel the recovery of alternative cryptocurrencies.
Previously, the rise in the price of Ethereum (ETH) to $1,500 led to an increase in demand for ERC20 tokens and alternative cryptocurrencies at the height of the 2017 bull market.
“Thinking if BNB could trigger the new altcoin bull run as ETH did in the past,” one recognized trader said.
While reports have shown that an unexpectedly large number of institutional investors have invested in the crypto market in the past 12 months, the impact of the inflow of institutional capital into the crypto market remains uncertain.
It is more likely that funds that are already in the crypto market sitting on the sidelines in the form of stablecoins, hedge funds, and fiat on exchanges would have a larger effect on the short-term performance of the market.
Su Zhu, the CEO of Three Arrows Capital, previously said:
Theres an estimated $2 billion in cash sitting at crypto funds/holdcos. Theres another $2 billion+ sitting in stablecoins, and another $2 billion sitting at exchanges/silvergate/signature. This is $6 billion fiat already onboarded to crypto to buy your bags. Imagine thinking we need new money to hit $10k.
If existing capital in the crypto market begins to move back into the market due to improving sentiment, it may allow the market to recover last year’s losses.
Will Binance Coin Change the Landscape of Alternative Cryptocurrencies?
Speaking to CCN.com in an exclusive interview, the Binance team said that it encourages projects that do not rely on smart contracts to migrate to Binance Chain in the near-term.
Several projects including Mithril have already moved to Binance Chain.
The Binance team explained:
Binance Chain was created to support the issuance and exchange of digital assets. Any project can issue new tokens on Binance Chain, and existing tokens that don’t depend on smart contracts are welcome to migrate to Binance Chain, to natively exchange on Binance DEX and gain the benefits from this low latency and high throughput network. This will inspire more economic freedom, and more projects participating in Binance DEX will help further the long-term vision of peer-to-peer cryptocurrency trading.
Whether the entrance of Binance Chain in the high throughput blockchain space would be sufficient to change the landscape of tokens is too early to determine, but based on the interest of the market around it, the expectations of investors that Binance could play a key role in the next upside movement of the market can be justified.
Click here for a real-time bitcoin price chart.
Last modified: March 4, 2021 2:44 PM