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Why Binance Coin Is Soaring Today

What happened

Binance Coin (CRYPTO: BNB) is up 11.4% in the past 24 hours to $374.32 per coin as of 11:16 a.m. EDT. On Sept. 29, the world's largest cryptocurrency exchange that issues and uses the namesake coin said it doesn't conduct any business whatsoever in China. That's good news, as BNB has witnessed heavy sell-offs in the past month due to investors' fears of China cracking down on Binance.

So what

The Chinese government loves cryptocurrencies as much as they love free and fair elections. For years, Chinese entrepreneurs and millionaires have been using major cryptocurrencies like Bitcoin and Ethereum to move their hard-earned money abroad, circumventing the country's restrictive capital outflow requirements. That's not something the Central Government likes to see.

Binance logo on a wallpaper.

Image source: Binance

Regulatory crackdowns in the country are intensifying. For example, Huobi Global, the ninth-largest cryptocurrency exchange globally by volume, announced it would no longer accept Chinese clients and liquidate China-based crypto accounts by the end of the year. So it's definitely a positive to know that there's no geographical risk with BNB and China.

Now what

The move may be the last straw needed for another bull-run on BNB. Binance coin is a multi-dimensional utility coin with two blockchains, the Binance Chain (BEP-2) and Binance Smart Chain (BEP-20). Users can use BEP-2 coins to send or receive money, validate transactions on its blockchain to earn a hefty 14% per year in interest (due to high demand), create new tokens, and swap for altcoins.

Meanwhile, users can use BEP-20 for borrowing and lending, receive a commission for trading liquidity, and more. On top of that, Binance burns a portion of its BNB holdings every quarter with its trading profits, in a move similar to stock buybacks. Binance burned $68 million worth of BNB in Q2, and the next burn will take place tomorrow. With all this in mind, Binance Coin is definitely one of the top cryptocurrencies to buy now.

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Zhiyuan Sun owns shares of Binance Coin, Bitcoin, and Ethereum. The Motley Fool owns shares of and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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