Bitcoin has had a solid start to the year in regards to its price movements. The coin is up over 30 percent into the new decade, and a number of factors are pushing it along to what many feels is a burgeoning bull run. This is especially appealing, and unexpected, as the early portions of previous years have been somewhat underwhelming, and often, negative.
However, despite the bullish tendencies of Bitcoin and its general effect on the market as a while, the major cryptocurrency is not the best performing asset of the month. A number of major exchange tokens, which are finding their niche and external value, have benefited far more than Bitcoin.
BitMax Token (BTMX) led cryptocurrency exchange tokens in January with 34 percent gains for the month. Binance Coin (BNB) was the next best in gains with a rise of 31 percent . Other exchange tokens which saw double-digit gains are Gatechain Token (GT) with 25 percent; Kucoin Shares (KCS), also with 25 percent; Huobi Token (HT) with 24 percent; and OKB with 21 percent.
A growing need
The idea of an exchange token is to allow the users of the exchange to access certain services and operations within the exchange via the native token. These utility tokens have become invaluable for some exchanges and are the basis of a lot of their successes.
Now, as the value grows and their worth is better appreciated, it is unsurprising that the gains being seen are even outweighing that of Bitcoin. The value of these tokens comes in their use around exchanges, and by making them a useful tool, exchanges are driving their demand, and thus their price.
More so, these exchange tokens are useful indicators for traders as if trading volume increases exchange tokens tend to rise due to the increased activity on the different platforms.
Good for Bitcoin
While the growth and expansion of the exchange tokens may seem to be at a cost to Bitcoin and its continued success, it should rather be seen as a boost for the entire marketplace. Bitcoin’s own growth helps spur trading and general excitement in the market, which also boosts exchanges and their tokens. This, in turn, comes back to help boost Bitcoin’s price as well.
It must be noted that the growth of Bitcoin’s price is one thing, but the maturation and expansion of the entire cryptocurrency industry are equally important. For exchanges which are an important facet of the space, and often the main go-between for users, there needs to be a good service.
Having functional, worthwhile and valuable utility tokens is one such way that the cryptocurrency will become legitimized, and Bitcoin will grow into a stronger force.