Binance Coin (BNB), the crypto asset that can be exchanged for transaction fees on the Binance exchange, is up more than 140 percent year to date and is now deviating from bitcoin’s price trend – a feat not commonly observed in the nascent crypto markets.
While the reasons that most cryptocurrencies are highly correlated to bitcoin are not definitive, studies have shown this dependency on bitcoin’s trend has only grown stronger with time. Yet, BNB is proving different.
BNB, currently ranked eighth as per CoinMarketCap, in fact, is the only cryptocurrency out of the top 10 to post a yearly gain against the dollar. The next closest performer, Tron’s TRX token, is printing a -44 percent annual loss.
Top 10 Cryptocurrencies (YTD percent change)
As depicted in the above chart, the performances of the top 10 cryptocurrencies by market cap tend to align closely with one another except for stablecoin Tether (USDT), given it is designed to hold a consistent value.
However, this connection began to weaken for BNB/USD as 2019 began, a fact made evident by BNB/USD’s performance line (orange) above, which has been deviating significantly from the other big name cryptocurrencies, effectively making it the most bullish notable outlier of the group.
BNB/USD vs. BTC/USD Performances
Indeed, BNB now seems to be charting a course of its own as it continues to significantly outperform bitcoin.
BNB/USD’s year-to-date performance dwarfs that of bitcoin’s, boasting a 141.7 percent increase compared to BTC’s less than 4 percent increase.
BNB is outperforming on more immediate time scales as well, including the last 7- and 30-day periods in which the cryptocurrency is printing 41.47 and 99.17 percent growth respectively, compared to BTC’s just 1.62 and 12.65 percent increases during the same time periods, according to data from Messari.
Additionally, Binance’s strong Feb. performance could be attributed to bitcoin’s first green candle in over 6-months which demonstrated a greater than normal uptick in retail investor interest.
As more traders pile in on potential hype or major price movements, an increase in Binance exchange activity could become more present, thus increasing the demand for BNB as a utility token and driving up its price.
Given the highly correlated and immature nature of the cryptocurrency market, it’s unlikely for BNB to chart its own distinctive trend for an extended period of time, but only time will tell when BNB ceases to be an outlier.
Disclosure: The author holds BTC, LTC, ETH, ZEC, AST, REQ, OMG, FUEL, ZIL, 1st and AMP at the time of writing.