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Binance Coin (BNB), which has exhibited a remarkable rise in the cryptocurrency market, reached an all-time high of $859.
Cryptocurrency analyst Maarten Regterschot argued that this rise of BNB is not just a wave of speculation, but the result of long-term fundamental dynamics.
According to Regterschot, BNB is now the third-largest cryptocurrency by market capitalization, excluding Bitcoin and stablecoins, with its total market capitalization rising to $112 billion.
While many altcoins performed poorly throughout 2024, BNB continued to gain steadily. Regterschot noted that its steady price increase since the beginning of the year has placed it just behind Bitcoin.
The analyst, who claims that BNB has offered strong returns to investors not only recently but also over the past five years, noted that the asset's Sharpe ratio has reached 2.5. According to the analyst, this ratio indicates that investors are receiving 2.5 units of return for one unit of risk. This, he believes, is one of the reasons for the recent surge.
Regterschot noted that this rally in BNB was fueled not by short-term leveraged transactions, but by capital flows directly into the spot market. The lack of an increase in open interest in futures suggests the rally is well-founded, according to the analyst.
*This is not investment advice.