In the new round of the bull market, the cryptocurrency market has shown unprecedented vitality. After years of bear market lows, market sentiment has rebounded, and investor confidence continues to grow. Especially against the backdrop of the U.S. entering a potential rate cut cycle and Trump possibly bringing favorable policies, a new round of the bull market has begun.
The potential of exchange platform tokens
Exchange platform tokens (such as #BNB, OKB, etc.) may encounter unprecedented opportunities in the upcoming bull market due to mechanisms such as trading fee discounts, ecosystem expansion, and token destruction. In particular, BNB's performance in the 2021 bull market became a typical example of the success of platform tokens. Through in-depth analysis of BNB's performance at that time, we can better understand its potential in the 2024 bull market, which also provides an important reference for other platform tokens.
Analysis of BNB's performance in the 2021 bull market
In the 2021 bull market, BNB, as the native token of the Binance platform, saw its price rise rapidly from about $40 at the beginning of the year to a peak of $690 in May, an increase of 1600%. Several key driving factors are behind this growth:
The synchronous growth of market trading activity and platform token demand
In the first quarter of 2021, the trading volume of the Binance platform reached $3.5 trillion, an increase of over 300% compared to the previous year. The growth in trading volume reflects the heightened market sentiment and directly drives the demand for platform tokens like BNB. The high correlation between trading volume and platform token prices indicates that under bull market conditions, increased market activity will elevate the prices of platform tokens.
The role of the destruction mechanism in supply and demand adjustment
Binance's quarterly destruction mechanism played an important role in the bull market. For example, in the first quarter of 2021, Binance destroyed over 1,099,888 BNB, which is about 3.2% of the circulating supply. As the circulating supply gradually decreased, the scarcity of BNB in the market increased, thereby supporting its price rise. According to statistics, Binance destroyed over 6,800,000 BNB throughout 2021, a move that provided strong support for the increase in BNB's price.
Promotion of the BSC ecosystem
In addition to the increase in trading volume, the rise of BNB also benefited from the thriving development of the Binance Smart Chain (BSC) ecosystem. With low transaction fees and high efficiency, BSC attracted a large number of DeFi and NFT projects. By May 2021, BSC's average daily trading volume reached 12 million transactions, while Ethereum's average daily trading volume during the same period was 1.5 million transactions. As the Gas token of BSC, the demand for BNB further pushed up its price.
Prospects for potential in the 2024 bull market
Assuming that in the new round of the bull market, the trading volume of platform tokens can return to or even exceed the peak levels of 2021, the prices of platform tokens like BNB may experience significant growth. In addition, if the total locked value in the DeFi and NFT markets recovers to about $180 billion during the 2021 bull market, the demand for BNB in the DeFi ecosystem will further boost its value. Based on this outlook, we can set the price target range for BNB in the 2024 bull market at $800 to $1000, depending on the strength of market demand and the direction of the Federal Reserve's monetary policy.
2024 trading volume growth forecast: Assuming that platform token trading volume reproduces the growth trend of 2021 during the bull market (for example, Binance's trading volume reaches $3.5 trillion), the prices of platform tokens like BNB may experience explosive growth. The annual trading volume growth rate of BNB in 2024 is expected to exceed 100%.
2024 BNB fee destruction forecast: Based on the current BNB destruction mechanism (quarterly destruction and BEP-95 real-time destruction), as on-chain transactions and ecosystem activities increase, the amount of BNB destroyed is expected to continue to grow. According to the BEP-95 real-time burning mechanism, the current average daily destruction is about 860 BNB. If market activity becomes more active in 2024, the destruction amount is also expected to increase accordingly. In addition, the quarterly destruction amount is currently about 2-3 million BNB, and if the market enters a bull market and maintains high trading volume in the future, the quarterly destruction amount may also significantly increase.
2024 price target: Based on the above factors and market conditions, the target price range for BNB in the 2024 bull market can be set between $800 and $1000. This prediction will depend on the frequency of interest rate cuts by the Federal Reserve and the actual situation of global market demand.
Market recovery drives platform tokens to rise
Combining the performance during the 2021 bull market, especially the astonishing increase of BNB, it can be seen that platform tokens, with the assistance of high trading volume, destruction mechanisms, and ecosystem expansion, possess significant appreciation potential. If global market demand rises in 2024, the inflow of funds driven by the Federal Reserve's loose monetary policy will further strengthen market sentiment, and platform tokens like BNB, OKB, etc., may again experience high growth.
