BNB Reaches New All-Time High as Capital Rotation Boosts Older Cryptos
Older cryptocurrencies, which have faced regulatory challenges, have seen significant gains in the past month, with a surge following the election victory of Donald Trump. His win is seen as a signal for a more favorable regulatory environment for digital assets in the U.S.
BNB, the native token of the Binance-adjacent BNB Chain, hit a new all-time high on Wednesday, continuing the trend of large-cap cryptos setting fresh records, joining Bitcoin (BTC), Solana (SOL), and Tron (TRX) in the rally. BNB surged to $793 earlier in the day before pulling back slightly. The token broke through the $700-$720 resistance level, a barrier that had held for over three years, and was last trading at $730. This marked a 14% increase in the last 24 hours, significantly outperforming Bitcoin’s modest 0.4% gain and the CoinDesk 20 Index’s broader 2.7% rise.
The price action comes as Bitcoin struggles below the crucial $100,000 mark, prompting traders to rotate their capital into smaller cryptocurrencies, or altcoins, in search of higher returns. Some older cryptos, including Ripple’s XRP and TRX, have been among the biggest gainers as the market anticipates a more crypto-friendly regulatory environment under Trump’s leadership.
Launched in 2017 by Binance, BNB serves as the utility token for the BNB Chain, previously known as Binance Smart Chain. It is used for paying transaction fees on Binance and receiving trading fee discounts. However, regulatory hurdles have weighed heavily on BNB in 2023, with the token lingering near bear market lows of around $200 for much of the year. These challenges have eased, especially after Binance founder Changpeng “CZ” Zhao was released from prison in September following a plea deal related to violations of the Bank Secrecy Act. Binance also made strides to improve its compliance efforts, including significantly expanding its compliance department.
BNB’s price rally is further supported by Binance’s quarterly token burning initiative, which regularly reduces the circulating supply based on activity within the BNB Chain ecosystem. In a recent burn, Binance destroyed over 1.7 million BNB tokens worth $1.07 billion at the time.
Alongside the price increases, user activity within the BNB Chain ecosystem has also surged. Daily active addresses and transaction volumes reached their highest levels in at least three months, according to data from Artemis.xyz, reflecting growing engagement within the platform.
