Binance Coin or BNB hit a new all-time high of $583 earlier today after the cryptocurrency surged 67% in a week to become the third-largest in market cap after Bitcoin and Ethereum.

What Happened: BNB rose over 25% overnight and reach its new high. According to CoinMarketCap data, its trading volume even exceeded Bitcoin’s over a 24-hour period.

The token has surged 1454% year to date, fuelled by the increased popularity of the digital asset ecosystem Binance Smart Chain.

A popular Twitter trader suggested, there might be even more upside for the coin this week if it successfully breaches few critical support levels.

Why It Matters: After gas fees on the Ethereum blockchain reached record highs, smaller retail traders begin to look for alternative chains to execute cheaper transactions.

Binance Smart Chain (BSC) provided a viable option for these traders, and daily transactions on the chain have grown exponentially in the past few months, eclipsing Ethereum’s by three times.

“What started as a simple utility token has evolved into something much more complex. BNB’s simple purpose of paying discounted Binance trading fees was only the beginning,” said Binance in a blog exploring BNB’s rise to the top.

According to crypto analyst Joseph Young, BNB could capture a “relatively untapped market” as BSC continues to gain popularity in Southeast Asian countries due to its low fees.

The token has a maximum supply of 170 million BNB while its current supply in circulation is around 154 million. Binance plans to reduce its circulating supply on a certain schedule with regular “token burns” which will make BNB more scarce with time.

"The long-term vision for BNB is for it to become the native token on multiple application-specific blockchains. BNB was never intended to replace Bitcoin or Ethereum.

To become a true mass-adopted application, BNB must be able to facilitate billions of transactions per day. In its current form, we still have a long way to go. We are working on it," said Changpeng Zhao, CEO of Binance.com.

Image: Courtesy of Binance