Why Is BNB So Resilient Amid the Crypto Market Pullback?

BNB extended its gains on Wednesday even as other top digital assets notched significant losses, with an analyst attributing its recent upswing to its usefulness and capital structure in an interview with Decrypt. .

Ethereum has sunk 2.4%, and XRP is down 1.2% in the past day. Bitcoin was roughly flat after spending most of Wednesday morning in negative territory. But BNB was recently trading 0.8% higher over the past 24 hours to change hands for $1,316.38.

“BNB has remained notably resilient amid a broader market pullback, driven by the combined effects of ecosystem utility, tokenomics, and capital structure,” Bitunix analyst Dean Chen told Decrypt. “As the native token of Binance and the core gas asset of BNB Chain, on-chain demand for BNB continues to rise across DeFi, RWA, gaming, and infrastructure projects, reinforcing its fundamental value.”

BNB has also been buoyed by institutional interest. Former Binance CEO Changpeng Zhao’s firm YZi Labs announced a $1 billion fund for BNB Chain developers.

“The recent market attention surrounding CZ’s YZi Labs has further strengthened investor confidence in BNB’s long-term prospects,” Chen said.

At the time of writing,  BNB’s price was only 2% away from the all-time high the token set late Tuesday. In the past week BNB has gained 27.6% and it’s now trading 48.7% higher than it was this time last month.

BNB, originally Binance Coin, debuted in 2017 as an ERC-20 token on Ethereum. But two years later, it migrated and became the native gas and governance token on BNB Chain.

BNB’s usefulness on the network has played a role in its resilience, Chen said.

“Binance’s ongoing auto-burn and quarterly burn mechanisms steadily reduce supply, magnifying price elasticity as demand increases,” he said. “This structural scarcity has provided a solid cushion against market downturns.”

On Tuesday,the network announced that it had integrated the Chainlink data standard, through which it has brought U.S. Department of Commerce economic data onchain. That means BNB Chain developers will have access to macroeconomic data directly from the Bureau of Economic Analysis, like GDP and Personal Consumption Expenditures by way of Chainlink Price Feeds.

But there may not be any fresh U.S. macroeconomic data for a while. The U.S. government is currently shuttered because Congress did not reach an agreement on a funding bill or a continuing resolution, which would have bought lawmakers time to negotiate appropriations. That means all non-essential services, including the preparation and release of economic data, will be on hold until the shutdown ends.

It has already dragged on for a week.  Users on Myriad are growing increasingly certain that the shutdown will extend beyond Oct. 15.

As of Wednesday morning, 79.5% of users think the shutdown will extend beyond the middle of the month. That’s a 39.5% increase since yesterday. Myriad is a unit of Dastan, which is also the parent company of an independent Decrypt.