This year, the old guard of cryptocurrencies lost ground to tokens with greater returns. Researchers predict the trend may continue.
Among the three largest digital tokens by market value, Binance Coin, or BNB, significantly outperformed its two larger rivals Bitcoin and Ether. The coin — issued by crypto exchange Binance Holdings Ltd. — gained roughly 1,300% in 2021, according to Arcane Research. By comparison, market leader Bitcoin increased 65% while Ether, the second-biggest token, rose 408%.
BNB is used widely on Binance, the world’s biggest crypto exchange by volume. It is also the native currency of Binance Smart Chain, a blockchain platform that supports smart contracts for use in decentralized finance (DeFi) and other applications. With BSC gaining adherents as a challenger to the Ethereum blockchain, that’s helped fuel gains in the BNB token, according to Arcane Research.
Other alternative coins, or “altcoins,” saw major gains in 2021, benefiting from an explosion in investor interest for digital assets and an expansion of the crypto ecosystem. Solana and Fantom, coins connected with other blockchain platforms that support smart contracts, outpaced Binance Coin’s returns, for instance.
“While Bitcoin showed strength in 2021, we’ve seen a constant stream of capital trickling down into altcoins,” the research firm wrote in a note. The firm’s analysts predict the strongest momentum in tokens related to the metaverse and GameFi, along with “ETH-killers” targeting Ethereum.
–By Akayla Gardner with assistance from Vildana Hajric (Bloomberg Mercury)