Why did Bitget Token (BGB) rise even in a bear market?
Many cryptocurrency exchanges, both centralized and decentralized, have their tokens:
- Binance Coin (BNB) at Binance,
- UNI for Uniswap,
- CAKE from PancakeSwap,
- Mantle (MNT) by ByBit and many others.
Other already-known and developing crypto exchanges do not want to lag behind the leading trading platforms and, therefore, also issue their tokens.
What is a Bitget Token?
BGB is a native token of the popular Bitget exchange. The token is issued on the Ethereum blockchain by the ERC-20 standard. Bitget Token is an updated version of its predecessor token, Bitget DeFi (BFT). 10% of the issued BGB tokens are directed to the Bitget protection fund, intended to pay compensation in case of user damage.
Like in Binance Coin, Bitget Token developers provided a deflationary mechanism that reduces the maximum number of BGB tokens (issuance). This mechanism consists of burning and repurchasing Bitget tokens.
The token was issued in July 2021, before the beginning of a prolonged bearish trend in the crypto market. However, despite this, the token's exchange rate has shown a primarily positive trend since its launch, closely related to the growing number of cryptocurrency exchange users. According to the authors, creating the BGB token was to unite the ecosystems of centralized (CeFi) and decentralized finance (DeFi).
The Bitget token developers aimed to create a simple, secure, and accessible Web3 ecosystem for decentralized applications, NFT, and other DeFi categories.
The BGB token does not have its blockchain and is part of Bitget's centralized and Web3 ecosystem. CEX exchange users mainly receive the benefits of owning BGB. Still, this token is practically not involved in the DeFi market, except for its platforms: it is not yet supported by third-party decentralized exchanges, cross-chain bridges, NFT marketplaces, and lending protocols like Aave and Compound.
BGB token utilization and market data
BGB tokens endow their holders with various privileges, such as:
- Discounts on trading commissions;
- VIP level upgrade for additional privileges;
- Free withdrawal of funds;
- Participation in lotteries from the exchange;
- Opportunity to brand (receive) free trial assets for trading on the exchange, which allows you to get real profit without risking your funds;
- Discount coupons for buying popular cryptocurrencies;
- Increased profitability in Earn;
- Participation in the exchange's launchpads (getting new tokens for staking BGB).
Users can stake the BGB token on the exchange and receive income on the passive. As you can see, the token has a lot of uses, but all the functions are limited only by the Bitget exchange ecosystem, which, at the same time, is a disadvantage of BGB.
The capitalization of the BGB token is $871 million, according to CoinMarketCap. According to this indicator, the token ranks 70th among all cryptocurrencies. A total of 2 billion tokens were issued, of which 1.4 billion circulate on the market.
The price of the BGB token at the time of writing was $0.62 — 9.5% below the all-time high reached in December 2023. The token went public in August 2021 and was trading at $0.07. Despite the general bearish trend on the crypto market, BGB's rate has been growing steadily all this time: since listing, BGB's price has increased almost 9 times. Probable reasons for this were a competent marketing campaign of the exchange and high interest from investors.
Prospects for the Bitget token
The main problem with the BGB token is that it directly depends on the well-being of the crypto exchange. In other words, if something happens to the exchange — it will be closed or hacked — it will affect the BGB rate. Users' activity also has a strong influence: if the demand for the exchange increases, the demand for the BGB token will also increase and vice versa.
From this follows another disadvantage of exchange tokens such as BGB. Crypto exchanges compete with each other, so they do not always support the assets of competing companies. For example, the well-known crypto exchange OKX does not support deposits and withdrawals through the BNB Smart Chain. Besides the Bitget exchange, the BGB token is only available for trading on Bitfinex and MEXC, but they have relatively low liquidity. BGB is not listed on decentralized exchanges like Uniswap and Sushi and only supports the Ethereum network.
However, in terms of prospects, Bitget Token has some positive points. Considering that Binance may lose market share due to legal proceedings with regulators, this may positively impact the development of the Bitget crypto exchange and, as a result, the growth of the BGB token rate. In its forecast, the well-known investment company VanEck noted that Binance will lose the title of leader, and its closest competitor, Bitget, will fight for market dominance.
It's also worth noting that the company is developing its own DeFi ecosystem, which already includes:
- web3 Bitget Wallet;
- decentralized exchange (DEX) with support for Bitget Swap cross-chain swaps, which supports more than 100 blockchain networks;
- Bitget NFT trading platform;
- a host of integrated dApps.
All this means that the scope of BGB will only expand, which may positively affect the token's exchange rate, which will compete with other exchange-traded digital assets of the crypto market.