BNB regains ADA’s # 3 position, but is it really worth it?

October 4, 2021 - Around 3 mins mins to read

Yesterday, the BNB usurped ADA on CMC’s market capitalization ranking and took 3rd place. The change was temporary and ADA eventually maintained its position right next to ETH. However, at the time of writing, BNB has once again outperformed ADA with a capitalization differential of around $ 950 million. Looks like the war isn’t over yet.

BNB 4-hour chart | Source: Tradingview

However, some people in the community believe that BNB is inherently of no value. For example recently the investor and analyst Mr.Whale tweets:

“BNB is currently the third largest coin in the entire market. Binance is banned in more than 37 countries, has dozens of fraud lawsuits, price manipulation, and a host of other scandals. In fact, this coin is worth zero, but that shows you how great the scam is. “

Binance has been experiencing serious legal troubles lately. In fact, after being targeted by regulators in the UK, Thailand, Japan, the Cayman Islands and Ontario, the platform has lost several key partnerships. However, in connection with the “bombs” mentioned, HODLer BNB remained calm.

Assess the true position of BNB

From a purely metric standpoint, BNB’s rating at the time of writing is unfair. The BNB’s MVRV ratio has so far remained in the negative range. The Market-to-True Value (MVRV) indicator shows when the price of an asset is above or below “fair value”. The graph below shows that BNB is undervalued. Overall, this means that HODLer BNB is currently losing more than usual on the market.

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MVRV rate from BNB | Source: Santiment

Despite the not quite as impressive dynamic, the average age of the coins has been rising steadily since mid-May, which is made clear by two key metrics: the average age of coins and the average age of dollar investment. Both essentially emphasize the average age of all coins on the blockchain.

Apart from the most recent crash at the end of September, the upward trend remains constant. As the average age of investment dollars in BNB is increasing, it can be argued that these coins are in a prolonged hibernation. In other words, an upward slope indicates a cumulative trend across the network. As such, it can be said that the older coins have matured and are now becoming part of the long-term portfolios of market participants.

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Average coin age (gold) and average dollar investment age (green) | Source: Santiment

Binance is also making rapid progress in the DeFi area. In fact, Binance is constantly competing with Ethereum on many fronts.

In addition, the network also received a large number of new users. The number of unique addresses in the smart chain has obviously increased significantly. In particular, mainstream acceptance only solidified at the end of February this year, and regulatory uncertainty has not thwarted the aforementioned trend.

With a daily increase of 143,364, the number of unique addresses reached over 97 million at the time of going to press. Additionally, Binance remains the most preferred exchange based on trading volume. Data from CoinGecko show the same thing.

So, despite the obstacles along the way, Binance is moving step by step and getting stronger every day. While short-term performance isn’t as attractive, BNB has grown more than 1,418% over the past year. Therefore, the assessment statement “zero” is currently unfounded.

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