BNB Rallies 80% to Become 3rd Largest Cryptocy as Chain Activity Surges, Supply Tightens

BNB has been one of the best-performing major cryptocurrencies in the second half of this year. The price of BNB has increased by roughly 80% in the last three months alone. In fact, the token just flipped XRP to become the third-largest cryptocy by market capitalization.

The impressive rise in BNB’s price is not merely from speculation, as the fundamental metrics of BNB Chain support its token’s upward repricing. BNB’s supply is impacted by its burn program and the real-time burn of a portion of gas fees. Higher onchain throughput increases total fees paid, which marginally increases burn and tightens the token’s circulating supply over time.

The average number of transactions on BNB Chain after June is over four times higher than during the first quarter. Meanwhile, there has also been an elevated number of new tokens launched on decentralized exchanges on BNB Chain in recent weeks.

The main drivers behind this are Binance’s global user base, fiat on-ramps, onchain wallet integrations, and Binance Alpha feature that enables them to funnel users toward BNB Chain apps, lowering acquisition friction relative to competing chains. In particular, Binance Alpha’s staged rollout likely created a structural, months-long ramp in onchain participation by making BNB Chain the default venue for discovery-phase tokens. The recent breakout of the Aster perp DEX also likely provided a tactical, trading-centric burst in the chain’s activity.

Pancakeswap has also benefited well from the increase in BNB Chain’s onchain activity, as it saw nearly $80 billion worth of volume in September, its highest since November 2021. Earlier this week, it announced CAKE.PAD, a token launchpad built from the foundations of its original Initial Farm Offering (IFO) platform. Meanwhile, Pancakeswap’s CAKE token is up over 40% since the start of the month.

Of note, Nadsdaq-listed CEA Industries said Tuesday it now holds 480,000 BNB. The company cited an average acquisition price of $860 per BNB and $585.5 million in token value as of Oct. 6. BNB traded around $1,304 at publication time, up 7.5% over the past 24 hours according to The Block’s price data.