The BNB Chain’s native token, BNB, is down over 2.5% in the past 24 hours, continuing its fall from a new all-time high above $1,300 recorded earlier this week.
BNB is up 129% over the past year, outpacing both bitcoin and ether, as new momentum from the BNB chain ecosystem has launched a new wave of capital turnover.
Trading volatility remains high, with the token oscillating in a $62 range from October 9-10 before closing at $1,250, according to CoinDesk Research’s technical analysis model.
Jack O’Holleran, CEO of SKALE Labs, told CoinDesk that the recent increase appears to be due to the scale and reach of Binance users rather than hype.
“We are in a phase of the cycle that is focused on scope rather than technology,” he said. “Distribution is currently the key driver of growth. This reach advantage translates directly into adoption, with $14.8 billion in inflows last quarter and a surge in BNB channel activity.”
Jasper De Maere, a strategist at Wintermute, compared the current rally to the Solana cycle in late 2024 in a statement to CoinDesk, where price gains in a basic layer 1 token triggered a wave of liquidity across the ecosystem.
“BNB’s rally, fueled by gas fee reductions, RWA incentives and liquidity programs, sparked a wave of on-chain activity as capital shifted to the yield and meme sectors, with CAKE, HENA, HONEY and MANTA among the main beneficiaries,” he wrote.
The trend follows what De Maere calls the “L1 wealth effect,” when rising token prices result in dollar gains that are reinvested into surrounding protocols.
“As long as BNB prices remain near highs and bridged capital does not leave, recycling will continue, liquidity will simply rotate between sectors (memes → DeFi → yield) instead of going off-chain,” he added. “Only when outflows accelerate or trust breaks down does the loop truly end. »
Still, signs of exhaustion could appear if stablecoin balances fall or capital begins to flow out of the BNB chain. For now, the ecosystem appears to be recycling wealth internally, echoing Solana’s earlier trajectory.
“The wealth effect does not disappear when volumes slow; it ends when the money goes away,” concluded Mr. De Maere.
Disclaimer: Portions of this article were generated with the help of AI tools and reviewed by our editorial team for accuracy and compliance with our standards. For more information, see CoinDesk’s full AI policy.
