Is It Still a Buy?

Image source: Getty Images

Investors have been looking for low-fee blockchains in 2021 for NFT transactions and DeFi returns – this crypto project delivered.


the main points

  • Last year, Binance Coin (BNB) saw an annual return of 1,344%, far outpacing Ethereum’s 455% gain and Bitcoin’s 73% increase, according to Arcane Research.
  • The significant growth driver for BNB in ​​2021 was the drop in transaction fees for non-fungible tokens (NFTs) and decentralized finance (DeFi) services, which experienced exponential growth.
  • BNB price is down 4.04% in the last 24 hours at the time of writing, ranking fourth in terms of cryptocurrency market capitalization at $74.9 billion behind Bitcoin, Ethereum and Tether respectively.

Bitcoin may have beaten the stock market in 2021, but it has been overtaken by other high-altitude cryptocurrencies.

Binance Coin outperforms Bitcoin and Ethereum

According to the report “Cryptocurrency Brief 2021” by Arcane Research, Binance Coin (BNB) had a stellar year with a gain of 1,344%. While Bitcoin and Ethereum also ended the year in the black, their respective returns were 73% and 455% anemic by comparison. All of them are currently ranked in the top four projects by market capitalization: Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and Binance Coin.

It is important to note that BNB is the original coin of the largest crypto trading exchange by volume in the world, Binance, and the Binance Smart Chain (BSC). The BSC platform enables smart contracts necessary for DeFi services, and has low transaction costs. These lower fees helped snatch market share away from the leader in the current smart contract market – the Ethereum blockchain.

BNB Growth Drivers: Low Cost Fees for NFT and DeFi Transactions

Earlier this year, the Ethereum blockchain handled over 95% of NFT and DeFi transactions. However, the Ethereum network still suffers from scalability and congestion issues that will not be resolved until the blockchain upgrades are implemented with the introduction of ETH 2.0.

Due to the current limitations of the Ethereum blockchain, it has struggled to keep pace with the demands of network size from record growth of NFT and DeFi transactions. As a result, the ETH blockchain allows users to “increase” the fees for completing a transaction, which I have personally seen in the $100 to $200 range for completing a purchase during peak periods.

These costs – called “gas fees” in the crypto space – can be higher than the value of the actual NFT asset or the DeFi transaction itself. The Arcane report indicated that the average transaction fee for Ethereum was $21, while it was $3 for Bitcoin. Other blockchains such as Binance’s, Solana, Polygon, and Energi have fees as low as a few pence.

Binance Coin Going Forward

Ethereum still has a lot of market share to lose, assuming that NFTs, DeFi, and cloud-based games continue to grow in popularity in order to play to win. So far, the BCS platform has already proven to be a formidable alternative to ETH. Despite an impressive increase in the past year, and based on its current market capitalization, BNB still has room to run and could see three to fivefold growth this year.

Buy and sell cryptocurrencies on an exchange chosen by experts

There are hundreds of platforms around the world waiting to give you access to thousands of cryptocurrencies. In order to find the right feature for you, you will need to decide which features are most important to you.

To help you get started, our independent experts have tested the options to bring you some of our best crypto exchanges for 2021. Check out the list here and start your crypto journey, today.