Why do long-term holders choose not to exit after BNB breaks through $1000?

Author: momo, ChainCatcher

BNB has broken through the important psychological barrier of $1000, 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 daily active user count.

BNB Chain is gradually becoming an amplifier of market sentiment. From Jobless, Aster to Giggle, Sign, with the support of CZ, it has evolved from a "wealth code" to a "wealth code" manufacturing machine.

In addition, BNB Chain is also strengthening its fundamentals by seizing the opportunity, planning to reduce the cost of a single transaction to about $0.005 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 in time.

Not Many Choices

Recently, after BNB broke the $1000 new high, a market maker from a Binance Alpha project, Kun, did not sell. 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 temporarily, I will hold BNB to absorb the benefits of interest rate cuts."

However, as the staking lock-up period is lifted, Kun may consider exiting a portion due to the reduced yields from Launchpool after the launch of Binance Alpha, which has decreased his passive income.

Another BNB whale, 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 was priced between $300 and $500, 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, it now accounts for 30% of his entire position.

From May this year until now, BNB has nearly risen from around $500 for almost five months. For Chen, taking profits at the peak is a routine operation, and the reason for not selling off significantly is that he believes BNB Chain is still on the rise, and there are no better alternatives. "Bitcoin and Ethereum are growing too slowly, and other altcoins and shitcoins can only be tested with small positions."

Crypto KOL BigFang generously shared on Youtube that $1000, as an important psychological barrier, is expected to attract traditional off-market funds after the breakthrough.

In early 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 submitted applications for BNB ETFs to the U.S. SEC.

Moreover, crypto KOL Very Big Orange revealed on Twitter that he has held BNB since its ICO and continued to increase his position by 1000 BNB when it reached a new high of $990. 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, stating, "Hold Aster like I held BNB eight years ago."

Why Can They Hold for So Long?

Compared to the market sentiment regarding CZ's potential return to Binance's leadership, the long-term BNB holders interviewed may be more focused on BNB's token economic model, the team's leadership capabilities, and the fundamental aspects and future growth potential.

1. BNB Captures Real Income from the BNB Ecosystem

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

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 some 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 build liquidity pools on BNB Chain through Binance Alpha. These liquidity pools will use BNB to form, thereby locking a large amount of BNB in the pools. This mechanism is similar to the splitting mechanism of Solana, which reduces circulation by locking tokens, thus 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 why BNB whale Chen holds for the long term. 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 capabilities.

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 for the long term.

Chen believes that Ethereum is more like a slow-paced, externally capital-dependent large company, while BNB Chain resembles an actively attacking 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 craze subsided, Binance Alpha drove community trading of new Binance projects; subsequently, there were platforms like Four.meme's platform token, BNB's reserve strategy narrative, and 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 begun to sweep the community, with projects that CZ interacts with, including those invested in by YZi Labs, becoming new passwords for the community.

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

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

3. Incremental Space from Traditional Fields

The confidence in holding BNB comes not only from the vitality within the community but also from the gradual recognition and adoption by 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 have gradually expanded their RWA businesses to BNB Chain. Recently, Franklin Templeton, managing $1.6 trillion, has expanded its tokenization products to BNB Chain. Another asset management giant, VanEck, has also launched a tokenized treasury bond fund, VBILL, on BNB Chain in collaboration 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 actively promoting adoption in traditional businesses, recently achieving a launch in 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 world's largest BNB reserve listed company, holding over 410,000 BNB as of September 10;

• Nano Labs (NA) plans to invest $1 billion 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 its raised funds to acquire BNB to strengthen its cryptocurrency funding strategy;

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

• ……

Additionally, the economic zone of the Kingdom of Bhutan, Glab Mindfulness City (GMC), 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 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 applied to withdraw the 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 ahead of schedule. This progress has alleviated the market's long-standing biggest concerns to some extent.

In the context of the global compliance trend, 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 basis.

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 an intrinsic value foundation. 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. At the same time, 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 the performance of specific companies and ecosystems, and is highly sensitive to global macroeconomic sentiment.

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