The price of BNT, Bancor’s native token, rose 86% from $ 1.02 to $ 1.919 in just two days. The rally was fueled by a combination of Coinbase listing BNT and the growing volume of Bancors DEX.
Coinbase listing was the main catalyst behind BNT’s strong 48-hour rally. Almost immediately after its announcement, the token’s price jumped around 16% after rising to $ 3.70. Coinbase said on December 16:
“As of today, Coinbase supports Aave (AAVE), Bancor (BNT) and Synthetix (SNX) on Coinbase.com and in the Coinbase apps for Android and iOS. Coinbase customers can now buy, sell, convert, send, receive or store AAVE, BNT and SNX. “
Although the surprise price served as a short-term catalyst, BNT has rallied since early November on the momentum of Bancor.
What is bancor and why is it rising?
Bancor can be described as a decentralized exchange (DEX) and an automated market maker (AMM). In the Bancor network, everyone can trade ERC 20 tokens and various crypto assets in a decentralized ecosystem.
With the resurgence of decentralized finance (DeFi), Bancor’s daily volume and liquidity have steadily increased.
On November 19, Bancor announced that the protocol had reached a total suspended value of $ 60 million. The team said:
“Bancor has exceeded $ 60 million in TVL! Thousands of LPs now enjoy: one-sided AMM exposure; inconsistent loss protection; BNT Liquidity Mining. “
According to data from CoinMarketCap, Bancor has completed trades worth $ 14 million in the past 24 hours. For a decentralized on-chain liquidity protocol, a daily trading volume of over $ 10 million is relatively high.
For comparison: SushiSwap and Uniswap, the two largest DEXs on Ethereum, process USD 44 million and USD 275 million per day, respectively.
BTC breaking $ 20,000 will power DeFi
Decentralized applications and DEXs in the DeFi space would have more room for growth if Bitcoin and Ethereum started a rally in the short term.
Right now, both Bitcoin (BTC) and Ether (ETH) are consolidating below major resistance levels. However, several market analysts expect new all-time highs soon amid several bullish signals.
Additionally, economist and trader Alex Krüger cited the ongoing $ 20,000 retest and low futures funding rates as the likely catalysts to push Bitcoin past its record high. He said:
“The more time BTC spends below 20,000, and the lower the funding and futures base as the price approaches 20,000, the stronger the upward move once it occurs. It will come. “
Of course, if Bitcoin and Ethereum recover, the demand for DeFi would increase. Many DeFi users often provide cryptocurrencies like Wrapped Bitcoin and Ethereum as collateral to add additional risk to cryptocurrencies.
If the market entered a clear bull cycle, the demand for DeFi services would continue to grow as the volume of credit and trading increased. Also, the risk of adding more collateral in Ethereum to secure the margin increases when the price of Ether goes up.
As of December 16, the total value of all DeFi protocols is just under $ 15 billion, its all-time high.