Why did long-term holders choose not to exit after BNB broke through 1000 USD?

Author: momo, ChainCatcher

BNB has broken through the important psychological barrier of 1000 USD, and BNB Chain has also seen a resurgence in on-chain activity. On September 21, its daily trading volume reached a nearly 30-day high, exceeding 16.5 million transactions in a single day. Meanwhile, BNB Chain and opBNB have become the public chains with the highest number of daily active users.

BNB Chain is gradually becoming an amplifier of market sentiment, evolving from "wealth code" to "wealth code" manufacturing machine, supported by CZ, from Jobless, Aster to Giggle, Sign.

In addition, BNB Chain is also strengthening its fundamentals while the iron is hot, planning to reduce the cost of a single transaction to about 0.005 USD through network upgrades. Wall Street asset management giant Franklin has also officially announced the expansion of its self-developed tokenization platform Benji to BNB Chain.

However, amidst high prices and a lively atmosphere, some long-term BNB holders have not chosen to sell off significantly and exit.

Limited Choices

Recently, after BNB broke through the new high of 1000 USD, a market maker for a Binance Alpha project, Kun, did not sell off. He has held BNB since 2021, with 90% of his position in BNB.

Kun hardly participates in other non-mainstream altcoins, stating, "In a situation where I don't know where to exit, I will hold BNB to absorb the benefits of interest rate cuts."

However, with the unlocking of the staking period, Kun may consider exiting a portion, as the yields from Launchpool have decreased after the launch of Binance Alpha, leading to a reduction in Kun's passive income.

Another large BNB holder, Chen, has already sold 20% and invested part of the funds into other platform tokens, with a small portion betting on new hot meme projects on BNB Chain.

Starting from early 2024, when BNB's price was in the 300-500 USD range, he gradually invested 50% of his position into BNB. After CZ's release from prison, Chen continued to increase his holdings. Recently, after selling 20% of his BNB, BNB now accounts for 30% of his entire position.

From May this year until now, BNB has nearly risen for almost 5 months from around 500 USD. For Chen, taking profits at a high point is a routine operation. The reason for not selling off significantly is that, firstly, he believes BNB Chain is still on the rise, and secondly, there are no better alternatives, "Bitcoin and Ethereum are growing too slowly, and other altcoins and meme coins only dare to test the waters with small positions."

Crypto KOL BigFang generously shared on Youtube that 1000 USD is an important psychological barrier, and he is optimistic about the breakthrough, with traditional off-exchange funds entering the market.

At the beginning of September, the compliant trading platform OSL in Hong Kong opened BNB trading services to professional investors, making BNB the sixth cryptocurrency listed on the exchange. Additionally, several listed companies have formed BNB strategic reserves, and VanEck and REX Shares & Osprey Funds have already submitted applications for a BNB ETF to the SEC in the United States.

Moreover, crypto KOL Very Big Orange revealed on Twitter that he has held BNB since its early days and continued to increase his holdings by 1000 BNB when it reached a new high of 990 USD. After the new high, BNB remains his third-largest position, following Ethereum and Bitcoin.

In addition to continuing to hold BNB, he has also invested in the BNB Chain ecosystem, having purchased 1.4 million Aster, and stated, "Hold Aster like holding BNB eight years ago."

Why Can They Hold for So Long?

Compared to market sentiments such as CZ potentially returning to Binance's leadership, the long-term BNB holders interviewed seem to focus more on BNB's token economic model, the leadership capabilities of the team, and the fundamentals and future growth potential.

1. BNB Captures the Real Income of the BNB Ecosystem

"From the perspective of the token economic model, BNB captures the real income of the BNB ecosystem," which is the key reason for Kun's holdings.

In Kun's view, on one hand, BNB will buy back and burn tokens every quarter, and this deflationary mechanism directly feeds the exchange's profits back to the token's value. Through continuous token burns, the initial supply of BNB has decreased from 200 million to about 100 million, enhancing its scarcity and value.

Kun mentioned that CZ and his team hold a portion of BNB, and these tokens will not flow into the market, meaning that the circulating market value of BNB is lower than what is seen on the surface.

On the other hand, BNB allows project parties to establish liquidity pools on BNB Chain through Binance Alpha. These liquidity pools will use BNB to form, thus locking a large amount of BNB in the pools. This mechanism is similar to the splitting principle of Solana, reducing circulation by locking tokens, thereby enhancing the token's value.

Holding BNB also allows one to enjoy additional benefits from Launchpool, HODLer airdrops, MegaDrop, etc., which is quite attractive. This is also a key reason for BNB holder Chen's long-term holding. Chen also mentioned that BNB, as the core asset of the Binance ecosystem, can be used for trading fees, staking, and new activities such as airdrops, as well as applications in the BNB Chain ecosystem, giving it strong value capture ability.

2. "Bullish" on CZ

The strategic and execution capabilities of CZ and the BNB ecosystem are also important reasons why many are willing to hold long-term.

Chen believes that Ethereum is more like a slow-paced, externally capital-dependent large company, while BNB Chain resembles a proactive startup, especially after CZ's return, with the team continuously launching new projects and new gameplay, always finding ways to shift market attention and funds to the BNB ecosystem.

Since February, when CZ called for "test coin" TST, to CZ's dog, Mubarak, a CZ who originally claimed not to like memes has successfully shifted the community's enthusiasm for trading memecoins from Solana to BNB Chain.

After the meme heat subsided, Binance Alpha drove community trading of new Binance projects; subsequently, there were narratives about the platform tokens of Four.meme and BNB's reserve strategy, and just last week, after CZ changed his X account bio from "ex-@binance" back to "@binance," he targeted Perp DEX, and Aster surged dozens of times. The CZ effect has also begun to sweep the community, with projects interacted with by CZ, including those invested in by YZi Labs, becoming the new passwords of the community.

Crypto KOL @yuyue_chris Yuyue also posted on the X platform that after CZ's formal "return," it really feels like one can make money with him, "The essence of assets, Binance has indeed figured it out this time."

For Kun, who comes from a technical background, after seeing the "Ponzi schemes" in the crypto circle from various angles of technical innovation, CZ is one of the few who makes him feel that the intention is good. "CZ is already financially free, definitely not for money, as a tech guy active on the front lines, focusing on interesting content, it feels more like to consolidate Binance's position."

3. Incremental Space from Traditional Fields

The confidence in holding BNB not only comes from the vitality within the community but also from the gradual recognition and adoption in traditional fields. This "external validation" brings greater application scenarios and substantial new funds to BNB.

In terms of application scenarios, on one hand, Wall Street financial giants are gradually expanding their RWA business to BNB Chain. Recently, Franklin Templeton, managing 1.6 trillion USD, has expanded its tokenized products to BNB Chain. Another asset management giant, VanEck, has also launched a tokenized treasury bond fund, VBILL, on BNB Chain through a partnership with Securitize, while Ondo Finance and xStock have announced plans to introduce tokenized treasury bonds and structured products to BNB Chain.

On the other hand, Binance Pay is also actively promoting adoption in traditional commerce, recently achieving a launch with 30,000 merchants in South Africa through a partnership with Zapper.

In terms of new funds, the BNB strategy treasury of traditional listed companies has also brought structural buying pressure.

• BNB Network Company (BNC) is currently the largest BNB reserve listed company in the world, holding over 410,000 BNB as of September 10;

• Nano Labs (NA) plans to invest 1 billion USD in BNB over three years, aiming to hold 5%-10% of the total circulating supply of BNB, with its half-year financial report showing it has already held 128,000 BNB;

• Windtree Therapeutics (WINT) signed an agreement to use 99% of the funds raised to acquire BNB, strengthening its cryptocurrency funding strategy;

• Huaxing Capital invested about 100 million USD in a special allocation for BNB assets.

• ……

In addition, the Kingdom of Bhutan's Grelb Mindfulness City (GMC) economic zone has included BNB in its official strategic reserve asset list, indicating that BNB's value and security have gained attention and recognition at the sovereign level.

4. Reduced Policy Risks Facing Binance

In March of this year, Binance announced a 2 billion USD investment from Abu Dhabi's state-owned capital MGX, which is a very positive signal for Kun. This means Binance has found a strong "umbrella."

As the U.S. crypto environment gradually becomes friendlier this year, the policy risks facing Binance are also gradually being alleviated.

In May, the SEC filed to withdraw lawsuits against Binance, Binance US, and CZ. On September 16, Bloomberg reported that Binance is negotiating with the U.S. Department of Justice to potentially end the compliance monitoring period that began in 2023 early. This progress has alleviated the market's long-standing biggest concerns to some extent.

Amid the global trend of compliance, Binance has obtained regulatory licenses in about 21 countries or regions, including Dubai, Japan, the European Union, and Southeast Asia, establishing its business on a more compliant foundation.

Conclusion

In the current uncertain market environment, long-term holding of BNB reflects investors' pragmatic tendencies in limited choices and represents a vote of confidence in a continuously evolving ecosystem.

The logic behind BNB's rise comes from multiple sources of value support. Its deflationary model feeds the real income of the Binance platform back to the token's value, forming a foundation of intrinsic value. After CZ's return, the activity level of the ecosystem and the speed of project iteration have significantly increased, continuously attracting developers and users to participate, creating a virtuous cycle of development. Meanwhile, traditional financial institutions and listed companies are gradually incorporating BNB into their asset allocations or on-chain layouts, bringing structural capital inflows. The advancement of the global compliance process also provides a more stable policy environment for long-term holding. Additionally, on the technical side, the continuous optimization of BNB Chain's network performance and the reduction of transaction costs further enhance the on-chain experience.

However, the investment risks of BNB should not be overlooked; it remains a cryptocurrency with high price volatility, influenced by specific company and ecosystem performance, and is highly sensitive to global macroeconomic sentiment.

Overall, BNB has gradually transcended the attributes of a traditional platform token, transforming into a digital asset with an independent economic model and ecological logic. Its future value sustainability will depend on the strategic capabilities and execution of the team, the continuous growth of ecological projects, the effectiveness of technological upgrades, and the adaptability within the ever-changing global regulatory landscape.