The BNB chain’s native token, BNB, is down more than 2.5% in the last 24 hours, continuing its decline from a new all-time high above $1,300 recorded earlier this week.
BNB is up 129% over the past year, outperforming both bitcoin and ether, as renewed momentum in the BNB chain ecosystem kicked off a new wave of capital turnover.
Trading volatility remains high, with the token oscillating within a range of $62 from October 9 to 10 before closing at $1,250, according to CoinDesk Research’s technical analysis model.
Jack O’Holleran, CEO of SKALE Labs, told CoinDesk that the recent surge appears to be driven by Binance’s scale and reach of users, rather than hype.
“We are in a phase of the cycle that is focused on reach rather than technology,” he said. “Distribution is the key factor driving growth right now. That reach advantage is translating directly into adoption, with $14.8 billion in inflows last quarter and increased BNB chain activity.”
Wintermute strategist Jasper De Maere compared the current rally to the late 2024 Solana cycle in a statement to CoinDesk, where price gains in a layer 1 base token triggered a wave of liquidity across the ecosystem.
“The BNB rally, fueled by gas fee cuts, RWA incentives and liquidity programs, unleashed a wave of on-chain activity as capital rotated into the yield and meme sectors, CAKE, HENA, HONEY and MANTA among the biggest beneficiaries,” he wrote.
The pattern follows what De Maere calls the “L1 wealth effect,” when rising token prices generate dollar profits that are reinvested in surrounding protocols.
“As long as BNB prices remain near highs and bridging capital does not leave, recycling will continue, liquidity will simply rotate between sectors (memes → DeFi → yield) instead of going off-chain,” he added. “Only when capital outflows accelerate or confidence is broken does the cycle truly end.”
Still, signs of exhaustion could emerge if stablecoin balances fall or capital begins to leave the BNB chain. For now, the ecosystem appears to be recycling wealth internally, echoing Solana’s previous trajectory.
“The wealth effect does not die when volumes decrease; it ends when the money leaves,” concluded De Maere.
Disclaimer: Portions of this article were generated with the help of artificial intelligence tools and were reviewed by our editorial team to ensure accuracy and compliance with our standards. For more information, see CoinDesk’s full AI Policy.
