- FalconX network has purchased Arbitrum tokens worth $1.65M from Binance.
- Arbitrum’s native token has surged over 10% amid the report.
- The retention rates of Arbitrum’s native applications were higher than those of Optimism.
Arbitrum, the Layer 2 scaling solution for Ethereum, has seen a surge in the price of its native token, $ARB, following reports by Lookonchain that a major institution has bought a significant amount of it from Binance.
According to reports, FalconX, a digital asset trading platform, purchased 1.65 million $ARB tokens, worth around $2.06 million, from Binance earlier today.
Another institution(@falconxnetwork) bought 1.65M $ARB ($2.06M) from #Binance today.https://t.co/pJV8MKkx7s pic.twitter.com/WaKNcz1bPQ— Lookonchain (@lookonchain) March 29, 2023
This news has caused a significant increase in the price of $ARB, which rose by over 10% in a matter of hours.
ARB/USD price chart, source: Coinmarketcap
According to experts, this investment by FalconX is seen as a significant vote of confidence in the Arbitrum network, which has received media attention over the last several weeks. Reputable analytical firms like Messari have additionally heightened speculation on Arbitrum due to the excitement around its environment.
The argument behind Messari’s remarks is that new protocols are recognized as a significant revenue generator that often acts as an appealing offering to members of their society.
As #Ethereum’s L2s continue to gain momentum, there has been an accelerated adoption of native protocols.A main driver of this trend has been the wealth effect that new protocols can create.They can issue new tokens and distribute them to users, generating positive sentiment. pic.twitter.com/NPNTwz6xUp— Messari (@MessariCrypto) March 28, 2023
Messari’s accompanying charts also show that the retention rates of Arbitrum’s native applications were higher than those of Optimism, another L2 scaling solution. Specifically, Arbitrum outperformed Optimism in ecosystem benchmark and network application coverage areas.
Further, according to market watchers, the purchase of such a large amount of $ARB tokens by a major institution like FalconX is a strong signal of the growing interest in the network and its potential for future growth. Crypto proponents also believe this has led to speculation that other institutions may follow suit and invest in $ARB tokens, further driving up the price.
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