Why is BNB so resilient in the face of crypto market pullback?

BNB extended its gains on Wednesday even as other major digital assets posted significant losses, with one analyst attributing its recent rise to its utility and capital structure in an interview with Decrypt. .

Ethereum fell by 2.4% and XRP by 1.2% over the past day. Bitcoin remained roughly stable after spending most of Wednesday morning in negative territory. But BNB recently traded up 0.8% in the last 24 hours to change hands for $1,316.38.

“BNB remained particularly resilient in the face of a broader market downturn, driven by the combined effects of ecosystem utility, tokenomics and capital structure,” said Dean Chen, an analyst at Bitunix. Decrypt. “As Binance’s native token and BNB Chain’s primary gas asset, on-chain demand for BNB continues to rise across DeFi, RWA, gaming, and infrastructure projects, strengthening its fundamental value.”

BNB has also been boosted by institutional interest. Former Binance CEO Changpeng Zhao’s company YZi Labs has announced a $1 billion fund for BNB Chain developers.

“Recent market attention around CZ’s YZi Labs has further strengthened investor confidence in BNB’s long-term prospects,” Chen said.

At the time of writing, the price of BNB was just 2% away from the all-time high set by the token on Tuesday evening. Over the past week, BNB has gained 27.6% and is now trading 48.7% higher than the same time last month.

BNB, originally Binance Coin, debuted in 2017 as an ERC-20 token on Ethereum. But two years later, it migrated and became the native gas and governance token on BNB Chain.

BNB’s utility on the network played a role in its resilience, Chen said.

“Binance’s ongoing automatic and quarterly burn mechanisms steadily reduce supply, amplifying price elasticity as demand increases,” he said. “This structural shortage has provided strong protection against market downturns. »

On Tuesday, the network announced that it had integrated the Chainlink data standard, through which it brought economic data from the US Department of Commerce on-chain. This means that BNB chain developers will have access to macroeconomic data directly from the Bureau of Economic Analysis, such as GDP and personal consumption expenditures via Chainlink price feeds.

But there may not be any new U.S. macroeconomic data for some time. The U.S. government is currently shut down because Congress has not reached agreement on a funding bill or continuing resolution, which would have given lawmakers time to negotiate the appropriations. This means that all non-essential services, including the preparation and publication of economic data, will be suspended until the lockdown ends.

This has been going on for a week already. Myriad users are increasingly certain that the closure will extend beyond October 15.

As of Wednesday morning, 79.5% of users thought the closure would extend beyond the middle of the month. This represents an increase of 39.5% since yesterday. Myriad is a unit of Dastan, which is also the parent company of an independent Decrypt.