The Bitcoin (BTC) Rally Is Supported by Binance Coin (BNB) Only, BTC Is Consolidating

The Bitcoin (BTC) Rally Is Supported by Binance Coin (BNB) Only, BTC Is Consolidating

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Contrary to forecasts, bitcoin’s 15% rise did not set an example for Ethereum and other leading altcoins except one. Binance’s native coin is up more than 14%.

Binance Coin (BNB) is heading to refresh its local 5-month high above $518. Perhaps BNB will even update its all-time high above $690, which was set on May 10. Experts believe that the growth of BNB is not related to the bitcoin rally, but happens due to the development of the Binance exchange.

As for bitcoin, it is consolidating after information that the launch of bitcoin futures ETF is postponed until 2022, according to research firm CFRA NEWS. Todd Rosenbluth, CFRA senior director on ETFs research, said that “the current clouded regulatory situation could cause further delays.” More than 20 crypto-asset ETFs are now awaiting SEC approval, according to Rosenbluth. SEC supposes that crypto-asset futures contracts can lag up to 20% in the case of a market rally. The SEC considers tough regulation as a decision of the problem. On the contrary, analysts believe that the invisible hand of the market can reduce volatility.

The Binance exchange has also faced stricter regulation. Regulators in several countries restricted its activities in 2021, which also hit BNB quotes. CEO Changpeng Zhao (CZ) is trying to solve the problem by hiring former regulatory officials. CZ also announced a program to improve compliance and user protection. He says:

– We firmly believe that by working alongside regulators and policymakers to develop clear regulatory and legal frameworks, engaging in active self-regulation, and putting our users first by protecting their interests, we can help welcome the next billion users to the world of crypto.

But the rise of BNB now is happening due to the fact that Binance launched a $1 billion fund to develop the Binance Smart Chain. This blockchain on the Proof of Staked Authority (PoSA) consensus serves as a platform for launching applications and is trying to attract developers from Ethereum. The further development of the Binance Smart Chain is aimed at bringing BNB to the first place in terms of capitalization. CZ said he was ready to tackle this incredible challenge.

Now BNB is in third place and is more than 5 times lower in terms of capitalization than ETH, and 13 times less than bitcoin’s capitalization. Binance regularly burns tokens to back the rate of BNB, but this operation simultaneously reduces the capitalization of the asset. 10% of the created fund will be directed specifically to stimulate liquidity. Another 10% is directed to the development of talents, 30% to attract developers, including, probably, developers from the Ethereum ecosystem. And half of the fund goes to support startups.