BNB, the native token for the crypto exchange Binance and the third-largest cryptocurrency by market capitalization, hit a new all-time high of $636.95 at 3am UTC today.
The coin’s price has since retreated to $616, down 0.52% in the last 24 hours. BNB is in a very healthy place right now; the last time it was anywhere near this valuable was on April 13, when it hit its former ATH of $635.
What’s behind the rally?
Tuesday’s news that Binance is opening up its own NFT marketplace could be one of the driving forces behind this morning’s price surge.
NFTs are blockchain based digital assets that often reflect some art or videogame content or animation. The point is that they prove, verifiably, the scarcity of a digital asset, allowing them to be bought and sold just like real artworks and collectibles.
You are a NFT.
— CZ Binance (@cz_binance) April 27, 2021
Over the last year the market for NFTs has exploded, and several go for millions of dollars. From the outside, the technical details look impenetrable, but all you need to make an NFT is a piece of original art and a platform on which to sell it. See Decrypt’s guide for more details.
Binance’s upcoming NFT auction house could keep the market buoyant. Binance is one of the biggest exchanges in the world and has the wherewithal to keep the money flowing into the market. It launches in June.
It will operate in two tiers. It’ll start with a high-end service for premium auctions and exhibitions, no doubt hoping to attract the same quality of digital art that enabled Beeple to sell his work in a now historic $69.3 million sale via Christie’s, or the millions made by more boutique NFT marketplaces like Nifty Gateway. Binance announced that its platform would take 10% from such high-end sales.
The other tier is for the general riffraff to mint their own NFTs. Binance will take 1% as a “processing fee” but the exchange promises artists will receive a continuous 1% royalty on each resale of their work.
The relevance of all this to BNB’s latest ATH is that the NFT exchange will likely be powered by Binance’s very own token. BNB is already used to reduce fees on Binance’s cryptocurrency exchange and power its rival blockchain to Ethereum, the Binance Smart Chain.
Last tweet was 5 minutes pre-mature. #BNB not in a dip now. All time high! pic.twitter.com/Yw2fSrqCfq
— CZ Binance (@cz_binance) May 1, 2021
Most of the NFT marketplaces mainly trade in Ethereum, and a successful marketplace that runs on BNB could attract some of that business. Binance already makes it tricky to move ETH around, as it charges hefty withdrawal fees for tokens based on the Ethereum blockchains and teensy ones for BNB, plus discounts for BNB holders.
So, when the marketplace launches in June, BNB usage could well increase—if the marketplace performs well. If it does, fans and creators of arty digital assets may flock to the BNB market. The current price rally could show that traders anticipate that demand.
The weekly roundup
Bitcoin is in a healthy place today. It surged 6% overnight to hit a price of $57,719 at the time of writing. That’s still a long way off its former all-time high of $63,512, set in the middle of April this year, but it’s looking like the world’s favourite cryptocurrency is on the road to recovery from a series of crashes last month.
Ethereum is also pretty sturdy today. It gained 2.08% overnight to hit an all-time high (and current price of) $2,832.
Finally, meme coin Dogecoin is pumping pretty hard. DOGE rose 12.38% in the last 24 hours to hit a price of 35 cents.
So, all’s sunny and well in cryptoville today. And while Binance continues to burn BNB, the sun shines even brighter.
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