Binance's BNB Token Holds On To Top 5 Cryptocurrency Spot, But Misses Out On Bitcoin Rally

As the crypto world rejoiced in the surge of Bitcoin, Ethereum, and various meme coins, Binance's BNB token experienced a sense of missing out, failing to enjoy the upward trend of gains that the wider cryptocurrency market was witnessing.

What Happened: After the crypto exchange Binance pleaded guilty to anti-money-laundering and sanctions violations and was hit with a $4.3 billion penalty, its native token BNB BNB/USD felt the pressure and missed out on the broader crypto rally which took BTC to its highest levels in 19 months.

The Justice Department has filed criminal charges against former Binance CEO, Changpeng “CZ” Zhao.

BNB was launched during an initial coin offering in 2017. Currently, the BNB token has a total circulating supply of 151.7 million coins.

Price Action: Over the past week, BNB token's value saw a slight increase of 1.5%, but it has declined by 6.8% over the last 30 days and 18% over the past year. Its 24-hour trading volume fell by 6%, and its market cap has shrunk by 25% in the same period.

According to CoinMarketCap, BNB ranks fourth among the Top 100 cryptocurrencies. XRP, with a market cap of $34.6 billion, follows at fifth, while Solana, valued at $28.0 billion, is in sixth place. Although BNB's market cap ($35.3 billion) is slightly higher than XRP's, Solana leads in 24-hour trading volume with $2.5 billion, significantly outpacing BNB's $822.3 million.

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Why Does It Matter: Binance exchange is the largest platform for buying, and selling digital assets and trading of crypto derivatives. However, the exchange witnessed a drop in its share of spot trading volumes from 55% at the start of 2023 to 32% in November. Its derivatives market share also narrowed to 48% from more than 60%.

DefiLlama data highlights that customers reported $1.6 billion in withdrawals from Binance in November 2023, marking it the second-highest monthly outflow for the year. In December to date, the exchange has experienced a net inflow of $398 million.

“BNB is being treated as a proxy for Binance right now, which explains its strong underperformance,” Clara Medalie, director of research at Kaiko told BNN Bloomberg.

Read Next: Binance Enters New Era As CEO Richard Teng Prioritizes Transparency, Compliance

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