Binance Coin is one of the biggest cryptocurrencies by market cap and the latest upgrades to the new Binance Smart Chain have opened up a world of opportunities for its native token. So is now the best time to buy BNB?
2021 was a very interesting year for cryptocurrency, with the emergence of new projects and some record-breaking price runs. Bitcoin led the charge, seemingly cementing its place as the top crypto on the market, but since then sentiment seems to have shifted and many have speculated that the era of Bitcoin dominance might be drawing to a close.
As DeFi is increasingly taking the limelight, attention has turned to blockchains that can support a range of smart functions, rather than just value exchange, as is the case with Bitcoin and other first-gen cryptocurrencies. One such blockchain is the Binance Smart Chain, which supports numerous DeFi projects, as well as the creation of NFTs.
Binance Coin also has the advantage of being backed by the largest decentralised exchange in the world - which means that the coin can boast a certain degree of stability that other cryptocurrencies simply cannot match.
In the following article, we’ll list five reasons why now might be a good idea to add Binance Coin to your crypto portfolio.
5 Reasons Why Binance Coin Could Double Your Money
1. The Binance Exchange
The Binance Exchange is always going to be one of the biggest drivers of BNB’s value. We have already mentioned that the Binance Exchange is the world’s top crypto exchange with an estimated 28.6 million users.
In fact, recently the exchange has experienced such a surge in new users that the organisation behind it has struggled to hire enough servers to cope with the traffic! At the time of writing, Binance Exchange is the market leader, supporting more than 1.4m transactions per second.
BNB is the native token of the Binance Exchange. Whilst it can be used as a valid means of payment across numerous digital platforms, much of its value is to be found within the Binance projects themselves. Most importantly, BNB can be used to get discounted fees on the Binance Exchange.
This gives BNB a certain degree of utility and investors can have confidence that not only does the ongoing success of the Binance Exchange provide its native token with a degree of stability, but if it continues to grow its user base it is highly likely there will be higher demand for BNB, which in turn could push up its price.
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2. Binance can compete with Etheruem
It is very much looking like DeFi represents the future of cryptocurrency and many industry insiders have speculated that crypto projects that cannot offer smart capabilities may become obsolete in the near future.
At the time of writing Ethereum is unquestionably the king of DeFi, playing host to over 213 projects including some of the top names in the space, such as Uniswap and AAVE. Not to mention, numerous popular crypto tokens are now built using the ERC20 protocol, meaning they are designed to run on other Ethereum projects.
However, if there is one project that can rival Ethereum’s DeFi dominance, then it is Binance Smart Chain. In fact, in early 2021 Binance actually overtook Ethereum in terms of transaction count across DeFi projects hosted on the network, processing over 7.3 million on 1 May - 6 times the 1.4 million handled by Ethereum.
Binance Smart Chain also has some technical advantages over Ethereum. Its dual chain architecture makes it more suitable for multi-layer DeFi projects, not to mention numerous other applications. BSC also has much lower usage fees than Ethereum and when you are looking at DeFi - which requires high volumes of transactions - this is a major factor. Last year, several DeFi projects actually abandoned Ethereum due to its high fees.
Whilst Ethereum is in the process of its much anticipated 2.0 upgrade, at the time of writing Binance Smart Chain is a faster, cheaper alternative and BSC-based DeFi projects like PancakeSwap, Cream Finance and Peach Swap, are slowly gaining ground on their Ethereum-based rivals.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
3. Exchange Coins are Big Business
Exchange coins was amongst the best performing cryptocurrencies in 2021.
BNB itself has seen huge price growth in Q1, starting the year at around the $40-mark, it soared to an all-time high of $690 in May - equating to growth of over 1600%. Some of this was off the back of Ethereum’s congestion woes towards the end of 2020 and going into 2021, but many exchanges have reported increasing traffic - not to mention renewed interest in their native tokens.
The native tokens of OKEx and KuCoin have also experienced high trading volumes recently, with KuCoin Token (KCS) almost beating its record price of 2018 in April. Similarly, the OKEx token, OKB, soared to an all-time high in May. This marks a stark change from 2020, when KuCoin was trading for less than a dollar and OKB under $5.
In fact, many crypto analysts were ready to write exchange coins off as recently as autumn 2020 - before prices suddenly skyrocketed. It has been speculated that exchange coins have gone up in value in line with the growing popularity of DeFi, as the usage cases of the tokens within their parent networks may soon start to evolve.
This is certainly the case with Binance Coin and Binance CEO Changpeng Zhao has more or less acknowledged DeFi as the future and his firm intends to support emerging projects on the Binance Smart Chain. It remains to be seen exactly how BNB will fit into these plans, but it’s likely that it will have a positive impact on the coin’s value.
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4. Binance Coin’s Tokenomics
The points covered so far certainly suggest the Binance Coin could be a worthy addition to your crypto portfolio, but ultimately they all related to the success of the Binance Exchange or smart network. However, BNB itself actually has a pretty strong economic model and was already competing with the crypto heavyweights before the Binance Smart Chain was launched.
As we have already noted, BNB holders get a trading discount on the Binance Exchange. The discount is hardly negligible either - traders can save up to 25% by using the exchanges native currency. Given that most crypto traders are looking to maximise profits and with Binance being the biggest crypto exchange in the world, it’s safe to say that demand for BNB is likely to remain high in the foreseeable future.
When it comes to supply, BNB has taken a slightly unusual approach. The platform is committed to a token burn every three months, which sees it remove 20% of profits from the proceeding quarter from circulation. Effectively, this is a means to reduce inflation and in theory, create BNB scarcity. If demand remains strong, then economic fundamentals tell us that as more coins are burned, the price of BNB should rise.
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5. Binance Coin price predictions all point to growth
It’s fair to say that Binance Coin has the necessary credentials to continue to compete with the top cryptocurrencies on the market. However, as we have seen in recent months, a token’s technical credentials - or lack thereof - are often unrelated to its price movement. Fortunately, most crypto analysts are predicting growth for BNB.
WalletInvestor, for example, is predicting a substantial increase in value for BNB by the end of 2023. According to its technical analysis, Binance Coin will reach potential highs of around $1,042 by the end of 2023 and $3,169 in five years - representing a growth of 516.54% on the price at the time of writing. Simply put, WalletInvestor believes BNB will double your money in one year if you choose to invest now.
Meanwhile, DigitalCoinPrice is also predicting growth for BNB. It believes that Binance Coin will be trading above $739.27 by the end of 2023. The platform expects BNB to be worth above $1,060 per token by the end of 2025.
Of course, these Binance Coin price predictions are only speculative, but it is certainly a positive sign that two of the top analytical platform are forecasting such positive trajectories for BNB.
What Experts Are Saying About Binance Coin
Market sentiment is everything when it comes to cryptocurrency, so its always a good idea to keep your ear to the ground and listen to what key figures in the industry have to say about a particular token or project.
Writing for Investment U, crypto author Matthew Makowski says that “the BNB crypto – not unlike Ethereum – serves a purpose beyond sheer value,” referring to Binance Coin’s role as the “crypto to buy crypto with”. He also points out that during the time it took Bitcoin to double, BNB crypto has gone up more than 1,300%. “That’s not because [it is an] excellent store of value like Bitcoin. It’s because of [its] real-world functionality.”
Elsewhere, researcher Roberto Talamas believes the success of the Binance Smart Chain, which has “quickly become the most used smart contract platform next to Ethereum” and “accelerated volumes and earnings fueled by white-hot crypto markets”, has “created the perfect environment for BNB to reach new all-time highs.”
Finally, BNB received an unlikely endorsement from KISS legend Gene Simmons earlier last year. He announced via Twitter that he had “just bought 300k of BNB”. Whilst the glory days of glam rock may be over, Gene has long been held in high regard for his financial savvy and his support is a definite vote of confidence in Binance Coin.
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Conclusion - Is Binance Coin A Good Investment In 2023?
So can Binance Coin double your money in 2023? Well, as we have seen, two of the industry’s leading analytical platforms certainly believe so and given that BNB is currently sitting around the $570 mark and the fact that in 2021 the coin returned more than 1,300%, it doesn’t need to break any records to yield 100% profit for investors.
Whilst the crypto market is always volatile, Binance Coin also offers a certain degree of stability. That isn’t to say that it is a safe investment, by any means, but being the native token of the largest crypto exchange in the world comes with a certain cachet.
If you are thinking to invest in Binance Coin, then you’ll need to keep abreast of developments in the world of DeFi, as Binance Smart Chain and Ethereum are effectively in direct competition as to which network has the most to offer these emerging projects.
All things considered, Binance Coin might not double your money in 2023, but it certainly looks to be one of the better investments in the crypto space.
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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
FAQs
Is Binance Coin a good investment?
Any investment in the cryptocurrency market carries inherent risk, but we think that Binance Coin has stood the test of time and has the potential for some serious price growth in the coming months. However, only invest what you can afford to lose, as the market is notoriously unpredictable.
Will Binance Coin double my money in 2023?
There are no guarantees when it comes to crypto trading, but some analysts are predicting that BNB could quite literally double in value by the end of 2023. WalletInvestor, for example, believes in one year, Binance Coin will be worth around $1080.
How do I invest in Binance Coin?
If you want to invest in Binance Coin, then you’ll need to do so through a reputable exchange. We recommend eToro for most users, as it offers a highly accessible trading platform as well as plenty of learning resources to help you get to grips with the market.
What is Binance Coin used for?
Binance Coin was originally intended as a means for paying for services on the Binance Exchange. However, BNB has since become one of the most versatile cryptocurrencies that can be used across numerous DeFi projects and other online platforms.