Binance burned 370 million BNB in the first quarter, why did it hit new highs repeatedly?
Produced | Odaily (ID: o-daily)
Produced | Odaily (ID: o-daily)
On April 18, Beijing time, Binance released the latest BNB burn announcement, which is the eleventh BNB burn.
According to the announcement, in the first quarter of 2020, Binance destroyed a total of 3,373,988 BNB worth $52,466,000. The number of destructions increased by 52% from the previous quarter and increased by 306% from the same period last year.
The continuous growth of BNB burning volume is the result of the continuous prosperity and expansion of the Binance ecosystem. Especially since last year, Binance has made frequent efforts to acquire new businesses and lay out new tracks. In the long run, the final orientation can empower BNB.
In addition to the extensive ecological layout, IEO (Initial Exchange Offering) can still be the driving force behind the continuous rise in BNB prices.
At the moment when the encryption market lacks hot spots, Binance has not stopped the pace of IEO. Judging from the data, investors' enthusiasm for participation has not subsided. After the first IEO project WRX launched in the beginning of the year, the highest rate of return was close to 1200%.
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Data analysis: the largest amount of BNB burned in history
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(BNB destruction trend chart)
According to statistics from Odaily, the burning of BNB started in the third quarter of 2017 and reached its peak in the fourth quarter (point A). It showed a decreasing trend in 2018, and continued to rise sharply every quarter since 2019, reaching a new level in the first quarter of 2020. peak (point B).
But the causes of points A and B are very different.
Point A is the performance of Binance stepping on the market trend. In the fourth quarter of 2017, Bitcoin climbed to the highest point in history (close to 20,000 US dollars), the encryption market was generally prosperous, and the enthusiasm for spot trading was high. At the same time, new projects are emerging one after another, and the first-tier projects will tend to choose Binance, which has the best depth.
Binance has also enjoyed market dividends, with the burnt value of BNB increasing by 2,600% compared to the third quarter of 2017.
When the bear market came in 2018 and the enthusiasm for spot trading dropped sharply, Binance, which mainly focused on spot trading, naturally encountered bottlenecks in its business, and the amount of BNB burned showed a decreasing trend in 2018.
In 2019, in addition to the recovery of the market, Binance’s business layout has gradually enriched, and the BNB scene has also continued to expand. From leading the IEO trend to opening contract business, the value of BNB has risen, and Binance’s income has also increased. keep climbing. Since the fourth quarter of 2018, the burning value of BNB has continued to rise, with a cumulative increase of 454%.
If the peak of BNB destruction at point A is the result of the market’s prosperity, the new peak at point B in 2020 is the return of Binance’s rapid development of new businesses, selection of the right focus, and market capture.
In the first quarter of 2020, the epidemic and the crude oil price war hit the encryption market. Although the highest price of Bitcoin once rose by 10,500 US dollars, it suffered a sharp drop, and once bottomed out to 3,800 US dollars. Although bottoming out, the market panic has not been completely alleviated.
Different from 2018, today’s Binance has more business support. Binance has rebuilt its Empire State Building with multiple pillars, the most important of which is called contracts.
In the first quarter of this year, the encryption market was booming for a short time, and the main force of trading was also concentrated on contracts and leverage, so it was also called "leveraged bull".
Binance, which smelled the market, began to focus on contract trading, and continuously launched new contracts at a rate of one per week. Currently, there are 24 types of perpetual contracts, including many popular currencies such as Link.
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(Data time: April 19, 2020)
"The highest daily trading volume of Binance contracts has exceeded 8.9 billion US dollars. Both the overall trading volume and the trading volume of BTC perpetual contracts have surpassed BitMex and become the largest perpetual contract exchange in the market." Binance said.
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Aggressive business layout, fully empowering BNB
In addition to contract transactions, Binance has also launched many new businesses, continuously expanding the value of the BNB ecosystem and empowering BNB.
These new services can basically be divided into two categories.
First, deepen and expand vertical business, mainly C2C and options.
In the fourth quarter of last year, Binance launched the C2C platform and finally had its own deposit channel. This year, Binance further deepened the field. In January, Binance's C2C business announced the launch of a global merchant recruitment plan; in February, users can use Binance C2C to make deposits from the computer terminal to the APP terminal.
The fiat currency deposit channel has been opened up, which not only retains existing users for Binance, but also brings new traffic to Binance on a global scale.
In addition, on April 13, Binance also launched a new business, that is, option trading. The option exercise period ranges from 10 minutes to 1 day.
What is the market prospect of options trading? Liu Xiaotong, head of the encryption options exchange Deribit China, once told Odaily: "If the traditional market is used as a reference, the trading volume of options in the traditional market is more than 10 times the trading volume of the underlying assets. From this point of view, the trading volume of encrypted options There is still a lot of room for growth.”
Odaily also wrote an analysis that options will become another new track in the exchange field in 2020, and so far the prediction has come true. Bakkt, CME (Chicago Mercantile Exchange), LedgerX, and OKEx have successively launched options trading, and Huobi also intends to enter the market.
In today's fierce homogenization competition, the sooner you enter the game, you will undoubtedly gain the upper hand. Binance's launch of option trading at this time is also the meaning of the title.
“Initially we will focus on the BTC options product, and concentrate all our resources on development and operation. After BTC options products are successfully brought to the market, we will launch more options products.” Aaron Gong, vice president of Binance Futures, said.
Second, develop horizontal businesses, represented by "Binance Cloud", mining pools, and the acquisition of CMC.
In February of this year, Binance launched the "Open Platform" plan, and one of the highlights is "Binance Cloud".
Simply put, Binance Cloud provides technical support to help users quickly open their own exchanges, and provides services such as OTC fiat currency transactions, spot transactions, and futures transactions. The first Binance Cloud project, Binance Korea Exchange Binance KR, was also launched in April this year.
Moreover, Binance executives have placed extremely high expectations on Binance Cloud. “I hope that within five years, the Binance Cloud exchange will overtake Binance.com and contribute most of the trading volume.” Binance founder Changpeng Zhao (CZ) said.
On April 1 this year, Changpeng Zhao (CZ) announced that Binance Mining Pool will be launched soon. The mining pool of the exchange is also the main battlefield of another exchange predicted by Odaily. Huobi and OKEx have already been deployed.
Judging from the current preparations, Binance Mining Pool is most likely to focus on POS. Of course, Binance Mining Pool is not limited to mining. Binance also hopes to use this to promote Binance Finance, providing miners with one-stop services ranging from depositing and financing, currency transactions, OTC transactions to mortgage lending. With the advancement of the Binance mining pool, BNB is likely to have a strong synergy with the mining pool, such as holding BNB airdrops.
Furthermore, Binance also acquired CoinMarketCap (CMC), the world's largest encrypted data website, in April. This acquisition can not only expand the globalization process of Binance, but also reach more new incremental users.
“We usually reinvest nearly a quarter of our earnings in a year,” said Changpeng Zhao (CZ). “What Binance is currently looking for is not only trading, but also expanding its business portfolio.”
In fact, no matter whether it is a horizontal or a vertical business, the ultimate goal is to expand Binance’s source of income, empower BNB, and change the situation where platform coins are deeply bound to exchange trading businesses.
"It should be said that all of Binance's businesses, whether it is Binance US, contracts, or our return on investment, the income they generate will actually be incorporated into Binance's overall ecological planning and used to destroy BNB." Binance co-founder Ho One told Odaily.
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Sustained IEO, the rigid demand scenario of BNB
The direction of Binance’s continuous efforts is to make BNB the basic token of the entire Binance ecosystem, not just the platform currency of the exchange. The Binance ecosystem has just started, so BNB is a long-term value investment.
From a short-term price point of view, IEO is still an important driver and guarantee for the price of BNB.
In 2019, Binance launched IEO for the first time, and the first project BTT 10 times opened. Stimulated by the huge wealth effect, investors have been flocking to Binance IEO, and BNB has also risen, soaring more than 550%.
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(IEO rate of return of various exchanges, from Cryptorank data)
However, in the past, small and medium-sized exchanges rushed to imitate and joined the battle, which also caused IEO to be "broken" by some platforms. The quality of projects was uneven, and the phenomenon of prices diving soon occurred from time to time.
Binance is one of the few trading platforms that are still doing IEO and still have good projects to launch. This year, the halving hot spots have been exhausted, the encryption market lacks new growth drivers, and Binance’s IEO has once again attracted attention.
The first IEO project of Binance in the first year was India WRX, with the highest rate of return close to 1200%, and even now it still maintains a rate of return of 700%. Because of this, investors pay more attention to the new project Cartesi.
Stimulated by IEO, BNB also took the lead in January, with an increase of 33.1%. When the second phase of IEO project was recently announced, BNB also rose by more than 10% on the same day.
If Binance can continue to select high-quality projects for IEO, it is not impossible for BNB to return to its historical high this year.
Summarize
Summarize
The largest BNB burn in history marks a perfect end to Binance’s first quarter, but it’s not the end. The future of BNB carries the expectations of too many investors, and the big ship of Binance must continue to sail without stopping.
“Everyone thinks that Binance’s ICO is to raise money, but in fact what you are raising is debt, and your debt may be a lifetime debt.” He Yi said, “Even though BNB has increased by more than 100 times now, you actually The responsibility on the body is also heavy.”
