This week, transaction fees on the Ethereum blockchain grew to a level that made the decentralized applications (dapp) operating atop it practically unusable. In some cases, transferring as little as $5 across the second-largest public chain started costing as high as $300.
With no choice left, many of the dapp developers decided to run the same operations on a rivaling blockchain network, the Binance Smart Chain, a public ledger that offered to do the same tasks Ethereum does at 99 percent lesser costs. On Wednesday, the BSC blockchain processed about 2.12 million transactions compared to 1.26 million on Ethereum.
The strong shift also appeared as PancakeSwap, a UniSwap ripoff launched atop the BSC blockchain, rivaled Ethereum-based decentralized exchanges, driving a 1,000 percent-plus liquidity surge this year, accompanied by strong volumes—from $37 million on Jan. 1 to $1.68 billion on Feb. 19.
…Binance Coin (BNB/USD), a native token in the Binance’s ecosystem, was always at the center of BSC’s developments. Its prices in the US dollar market surged from $42 on January 1 to as high as $291 on January 19. Traders merely saw holding opportunities by taking cues from the Binance’s expansion into Ethereum’s turf.
— CZ 🔶 Binance (@cz_binance) February 19, 2021
The last five days saw BNB/USD surging by more than 100 percent. Ethereum remained pressured under the $2,000-level in the same period.
Binance Coin hit new all-time highs on booming BSC adoption. Source: BNBUSD on TradingView.com
Analysts now anticipate the BNB/USD rally to fly further upward, with the next primary targets sitting above the $300-level.
Bitcoin’s Role in Pushing Binance Coin Upward
More tailwinds for Binance Coin also come from the prospect of an overall crypto boom, led by Bitcoin’s meteoric rise in the last eleven months. The flagship cryptocurrency surged by more than 1,200 percent from its mid-March nadir of $3,858 as institutions realized its safe-haven credentials amid an uncertain global economic outlook.
Corporate houses, including Tesla, MicroStrategy, Square, and Bitwise, bought billions of dollars worth of Bitcoin to diversify their balance sheets with cash alternatives. Meanwhile, billionaire investors such as Paul Tudor Jones and Stan Druckenmiller also promoted cryptocurrency as digital gold— a hedge against a depreciating US dollar.
Bitcoin hits an all-time high. Source: BTCUSD on TradingView.com
As crypto adoption surges, it increases sign-ups across all the cryptocurrency exchanges. Meanwhile, that boosts Binance Coin’s adoption against its depleting supply rate.