How Binance inflated the value of it’s coin by 36%… by posting 1 tweet.
Today popular cryptocurrency exchange, Binance, announced that it would be developing their own blockchain, aptly called “Binance Chain”. As soon as Binance tweeted about this, the company’s token ($BNB) immediately increased in value by 36%.
How it happened
1. Binance Blog: 1:23pm — Price: $8.05
Binance firstly update their blog announcing the new blockchain:
As a public blockchain, Binance Chain will mainly focus on the transfer and trading of blockchain assets, as well as provide new possibilities for the future flow of blockchain assets. Binance Chain will focus on performance, ease-of-use, and liquidity. Binance Coin (BNB) will be upgraded to exist on its own blockchain mainnet, becoming a native coin.
2. Binance Tweet: 3 mins later — Price: +0%
As few people monitor the Binance blog, when the Tweet was posted 3 minutes later, the price of 1 $BNB was still $8.05.
3. Binance CEO tweet: 10 mins later — Price: +6.8%
Moments after the official announcement, $BNB’s value sharply increased. This increase accelerated when the CEO of Binance (casually) Tweeted that there would be “more news to follow” in the coming days.
4. $BNB tops out: 1 hour, 17 mins later — Price: +36%
The announcement, combined with the CEO’s promise of more news eventually increased the value of $BNB by 36%, within an hour and 17 mins of the first blog post.
Should cryptos be able to announce market moving news in such an informal way? Is this acceptable?
You wouldn’t see Apple unexpectedly announcing the launch of a new iPhone on Twitter during trading hours.
Likewise, you wouldn’t see their CEO, Tim Cook, shilling the latest Macbook — so this begs the following questions:
- Should cryptocurrencies announce news (with prior warning) in a more formal way?
- Should markets be temporarily closed during this period?
- Do cryptocurrencies need news regulation?
- Or does regulation instead hinder the development of a coin? i.e. is the stock trading PR driven model outdated?
Feel free to leave your opinion in the comments below.
This article was collated by Scoop Markets.
Scoop is the breaking news & analytics dashboard for cryptocurrency traders.
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