Binance Coin gained almost 20% in under 24 hours after news emerged that Binance, the biggest exchange in the world by transaction volume, would launch a $1 billion fund to generate more activity in the blockchain industry in general. More specifically, they also want to promote activity on their own Binance Smart Chain (BSC). According to data provided by Messari, Binance Coin (BNB) climbed to $467.89 from $392.44 in 24 hours.
Was this announcement the only reason? Analysts weigh in
Analysts such as Scott Melker, a crypto investor and analyst who hosts The Wolf Of All Streets Podcast, and Zap Protocol cofounder Nick Spanos defined the fund news as the main, but not the only reason for the most recent gains.
Some feel there won’t be as much incentive to buy Binance Coin after the price increase. However, it’s not certain. Spanos underscored the importance of the $1 billion fund announcement, noting that Binance Coin’s price has been going against the grain for some time:
News of Binance’s $1 billion growth fund made investors even more bullish on Binance Coin and we witnessed a sharp increase in demand for BNB. This is because the growth fund is the biggest of its kind and, although it will be blockchain agnostic, it is likely the bulk of the earmarked money will be spent on raising the profile of the Binance Smart Chain. As BNB is primarily used to pay transaction and trading fees on the Binance exchange, and as a high percentage of transactions executed via Binance are done on the Binance Smart Chain due to the lower fees, this growth fund bodes well for the future of Binance Coin.
Spanos doesn’t believe investors are just purchasing more BNB to put themselves in a better position to capitalize on the crypto bull run in the last quarter of the year. He points out coins like Bitcoin and Ethereum were down over the last 24 hours. Therefore, it doesn’t make sense to attribute BNB’s recent price growth exclusively to news of the fund.
However, its role is undeniable. Melker commented:
The announcement of the $1 billion growth fund was a clear catalyst for the rise of Binance Coin’s price. BNB rose in the face of a market wide sell off, seeing almost all coins losing value against both Bitcoin and the dollar. This was an impressive move based on a fundamental development.
