BNB bounces back to all-time highs, continues to re-establish itself after rough 2023

BNB -7.52% , Binance's exchange token and BNB Chain's native token, reached an all-time high of over $700 last week. 

The token was sitting at $312 at the start of the year but rallied to over $600 by mid-March, bolstered by the broader crypto rally and some positive advancements for Binance in their post-CZ era.

As a reminder, Binance settled with the U.S. Department of Justice for $4.3 billion last year, and the exchange’s former CEO, Changpeng Zhao, pleaded guilty to anti-money laundering violations and stepped down from his post. Zhao was sentenced to four months in prison, relatively short compared to the 36 months prosecutors had recommended.

Under new CEO Richard Teng, the exchange has been ushering in a new wave of compliance, most recently  signaling that it will restrict access to “unauthorized” stablecoins in the EU per the Markets in Crypto-Assets Regulation (MiCA).

Binance has managed to recover some of the spot market share it lost towards the end of last year. The exchange still counted for a sizable 37.5% of spot volume in November 2023, but it was a drop compared to the over 60% of volume it was accounting for in February of that year. While still not at peak levels, Binance has made up at least 44% of monthly spot volume since February of this year.

But BNB surged 18.6% in just three days in early June, climbing from around $600 on June 2 to $700 on June 5. This sharp surge seemingly happened without any big news regarding the exchange or the blockchain.

There are several possible catalysts for BNB's surge. The popularity of Binance Launchpool could be a contribution. The platform allows users to hold and stake BNB to gain access to new token offerings. Binance Launchpool was one of the first places to offer Notcoin, a token associated with a web3 Telegram game that has exploded in popularity.

Others have pointed to the  continued traction of BNB Chain, which is home to PancakeSwap, one of the most popular DEXs, and offers lower fees than Ethereum. More BNB Chain activity also leads to more BNB burns, which can lead to positive price action.

Some also highlighted more leverage for the BNB token, with futures  open interest across exchanges for the coin reaching $1 billion for the first time in early June, growing by 1.86x from June 1 to June 6.

It’s likely a combination of these things that has made BNB the best-performing exchange token over the past year, up 186%. It is a good sign for Binance, though, as it continues to re-establish itself after a relatively fraught 2023.

This is an excerpt from  The Block's Data Insights newsletter . Dig into the numbers making up the industry’s most thought-provoking trends.