Cryptos surge as BNB leads with 89.6% gain in 2024

Cryptocurrencies are experiencing a resurgence despite global economic challenges and geopolitical uncertainties, emerging as top-performing assets in the first seven months of 2024. Nvidia, one of the Magnificent 7 tech stocks on the US stock exchange, also ranks highly.

Binance Coin (BNB) led the cryptocurrency returns this year with an impressive 89.6% gain as of July 22. Bitcoin followed with a 51.0% increase, and Ethereum saw a 47.5% rise. Other notable performers included the Nasdaq 100 index at 19.8%, gold at 16.4%, MSCI World at 14%, oil at 13.4%, MSCI Asia at 8.21%, MSCI Emerging Markets at 6.80%, and coal at 5.68%.

Regulatory support has bolstered the cryptocurrency market, beginning with the US Securities and Exchange Commission’s (SEC) endorsement of the first spot Bitcoin exchange-traded fund (ETF) in January.

On May 24, the SEC approved the establishment of a spot Ethereum ETF (ETH ETF), allowing for the trading of investment units on US stock exchanges. This move enabled institutional investors to invest heavily in the asset, leading to a significant market capitalisation increase for cryptocurrencies to roughly US$2.5 trillion by July 3, up from around US$1 trillion in mid-October last year.

Kavita Gupta, founder and partner at Delta Blockchain Fund, highlighted the implications of the ETH ETF launch for other altcoins.

“The launch of the ETH ETF was a major development for the space and will kick-start the next altcoin rally, despite the Bitcoin dominance we have seen thus far.”

Crypto market

Cryptocurrency enthusiasts anticipate that four more coins could be endorsed for spot ETFs, potentially attracting more institutional investors to the crypto market in the second half of the year.

BNB, issued by Binance, was created in 2017 as a utility token for discounted trading fees and has since expanded its applications.

It is now used for various transactions, including paying fees on Binance.com, Binance DEX, and Binance Chain, as well as for payments on platforms like Monetha and HTC, booking accommodations, buying music or game rewards, and paying for online services.

Binance repurchases and permanently destroys or “burns” BNB every quarter using one-fifth of its profits, which supports its value.

Currently, BNB has a market cap exceeding US$87 billion, ranking behind only Bitcoin, Ethereum, and USD Tether. Sanjay Popli, chief executive of Cryptomind Advisory and co-founder of Cryptomind Group Holdings, noted BNB’s popularity but acknowledged investor concerns over the US SEC’s investigation into Binance Exchange and BNB coin.

Changpeng Zhao, former Chief Executive of Binance Exchange, was sentenced to four months in prison on April 30 for violating US money laundering laws. Zhao is set to be released this month, and despite no longer being an executive, he remains a significant figure influencing BNB’s price, said Popli.

Blockchain startups

BNB could also benefit from Binance Launchpad, which helps blockchain startups raise funds for new projects. Investors tend to hold BNB coins when the crypto market is active, anticipating free coins from Launchpool according to specific conditions, added Popli.

Popli mentioned interesting coins for the second half of the year, including NEAR Protocol, Render, Worldcoin, and Solana. Meme coins are also gaining attention this year.

Bitkub Academy, part of Thailand’s leading cryptocurrency exchange, identified four coins that could be endorsed as the next spot ETFs following Bitcoin and Ethereum. Solana, with a high market cap and liquidity, is a strong candidate, especially following the SEC’s decision to stop pursuing a court ruling on whether 10 crypto assets, including Solana and Cardano, should be designated securities.

Ripple (XRP) is another potential candidate, ranking fifth by market cap. Despite the SEC accusing Ripple of raising over US$1.3 billion through an unregistered asset offering, Ripple remains confident in a fair legal outcome. Litecoin and Dogecoin (DOGE) are also potential candidates due to their market presence and decentralised mechanisms.

Robert Mitchnick, head of digital assets at BlackRock, cautioned against expecting a long list of crypto ETFs.

“I don’t think we’re going to see a long list of crypto ETFs.”

BlackRock rekindled interest in spot Bitcoin ETFs with its filing in June 2023, addressing market manipulation and surveillance concerns. Bitcoin prices climbed over 11% in July, closing above US$67,700, while ETH prices dropped 3.4% to US$3,272. Ripple was the best performer among the top 10 cryptocurrencies, with a 26.9% gain in July, reported Bangkok Post.

Morgan Stanley plans to allow advisors to offer clients the chance to buy BlackRock’s iShares Bitcoin Trust or the Fidelity Wise Origin Bitcoin Fund. This decision may influence other banks to consider digital assets, and the upcoming US presidential election might lead to a more crypto-friendly administration, noted Nic Roberts-Huntley, chief executive of crypto startup Concrete.