Anyone with even a passing familiarity with cryptocurrency will know that Bitcoin is by far the most famous coin of them all. It was the original cryptocurrency and is today the biggest in terms of market capitalisation - and by a considerable margin.
However, Bitcoin is not without its flaws and as the advantages of blockchain become more and more widely recognised, several altcoins have emerged with improvements on Satoshi Nakamoto’s original whitepaper. Amongst the most successful of these is Binance Coin.
If you’re looking at crypto investment opportunities other than Bitcoin, then Binance Coin could well be the top alternative for 2021. In the following comparison, we’ll weigh up the key features of Bitcoin vs Binance Coin and see how the industry rates each one’s potential growth for the coming months.
Can Binance Coin take Bitcoin’s Crown?
Binance Coin has garnered a lot of attention recently and is one of only a handful of altcoins that has attracted large-scale support from outside of the cryptocurrency sector. Binance Coin’s market cap soared to an unprecedented $40bn in February after a remarkable price surge, allowing it to overtake Litecoin as the third world’s biggest digital currency and sparking renewed speculation that BNB could be the token that finally topples Bitcoin.
Back in 2019, Weiss Ratings suggested Binance Coin was having such a significant impact on the crypto market, that it could ultimately replace Bitcoin.
It wouldn’t be the first time an altcoin has been touted as the Bitcoin-slayer, so such predictions should always be taken with prudence. However, an altcoin on the move often presents a better investment opportunity - especially in the short term.
So should you invest in Binance coin or buy Bitcoin in 2021? We’ve put together the following comparison to see how each coin measures up against one another, as well as how they slot into the wider crypto market.
Bitcoin vs Binance Coin: A Comparison Between BNB and BTC
Whether you invest in Binance Coin or buy Bitcoin in 2021, both are tipped to grow in the coming months and both are likely to remain in the top bracket of cryptocurrencies for the foreseeable future. But to take an objective view of Bitcoin vs Binance Coin, we first need to look at each coin’s development.
Binance Coin Vs Bitcoin: What Are The Key Differences Between Them
Here are the most important ways the two assets differ:
Bitcoin was the first cryptocurrency and was more or less single-handedly responsible for putting blockchain technology on the map. Developed in 2009, Bitcoin was tipped to revolutionise the world of finance and quickly attracted interest from forward-thinking investors.
Few people outside of IT circles had heard of blockchain before Bitcoin. The technology allows for secure, peer-to-peer transactions without the need for a central authority, like a bank or government. The intention behind Bitcoin was therefore to offer an alternative payment method for retail and institutional transactions.
Whilst some mainstream financial figures were initially apprehensive about Bitcoin’s ability to hold value, opinions soon changed when early investors started seeing huge returns - in 2013 alone, the value of a single BTC token soared from around $150 to well over $1,000.
Binance Coin (BNB) is the name of the native cryptocurrency used for transactions made on the Binance cryptocurrency exchange. The coin was originally developed on the Ethereum blockchain, but migrated to its parent network when the Binance decentralised exchange was launched in 2017.
Being the native token of the Binance Exchange is a pretty big deal in itself. At the time of writing, the exchange was the biggest in the world in terms of trading volume, processing over 1.4 million transactions per second.
Binance Coin is used as a medium for exchange on the network, meaning the token experiences a very high trading volume itself, but it is also widely supported as a peer-to-peer payment option and, whilst it is not supported by PayPal, the Binance network has recently unveiled BinancePay - a rival platform for retail transactions.
Transactions and Speed
When comparing Bitcoin vs Binance Coin it’s important to understand several key differences. One of the main features that marks one token out from another is how their respective networks handle transactions. If you’re planning to invest in Bitcoin, for example, then you should be aware that this is one area in which the coin has faced a degree of criticism over the years.
Bitcoin relies on the proof-of-work protocol, in which computers on the network compete solve complex equations to verify new blocks on the chain - a process known as mining. It takes approximately ten minutes for new blocks to be created on the Bitcoin network, which is considerably longer than some other cryptos.
BTC mining also requires a huge amount of computing power and is very resource-intensive, so miners are rewarded for their work with Bitcoin tokens. More information on Bitcoin mining can be found here.
Binance has recently launched the Binance Smart Chain for the development of decentralised apps. This dual-chain architecture has revolutionised how the Binance network processes transactions and massively improved its scalability.
The new Binance Smart Chain purports a block creation time of as little as 3 seconds - which, let’s face it, blows Bitcoins ten-minute block time out of the water. The faster time is achieved through innovation within the two-chain system and the use of the faster proof-of-stake consensus mechanism. BNB also offers much lower trading fees than the Bitcoin blockchain, so all in all, there really is no comparison of Bitcoin vs Binance Coin when it comes to transactions.
Supply and Demand
If you are yet to invest in Bitcoin, you might be wondering how a currency that can be generated via a computer network can hold any real value. The answer to this question lies in Bitcoin’s in-built deflationary mechanism.
The total supply of BTC is limited to 21 million coins - there will never be more than this. Further to this limitation on overall supply, the reward metered out to successful Bitcoin miners is reduced by half at regular intervals - a process known, unsurprisingly, as halving. This effectively increases the scarcity of free Bitcoin tokens in the network, which in theory will boost the value of BTC in the years ahead.
Demand for Bitcoin shows no signs of slowing down either. In fact, at the end of 2020 PayPal started to support BTC, opening the cryptocurrency up for its 300 million users.
As we’ve noted, Binance Coin is the native token of the world’s biggest crypto exchange, so it stands to reason it is in extremely high demand. In fact, at the time of writing, BNB had a trading volume of around $6,773,230,572, putting it well within the top ten cryptos for this factor alone.
As far as supply, Binance Coin also has an in-built deflationary mechanism, though it differs a great deal from that of Bitcoin. Once a quarter, Binance uses 20% of its profits to buy back BNB and ‘burn’ it, which basically means permanently deleting it from the network.
This process is set to continue until 100 million Binance coins have been bought back and burned – accounting for 50% of the total 200 million supply. The practice increases the scarcity of BNB and also, in theory, its value.
Binance Coin vs Bitcoin: Which Is The Better Investment?
Technical particulars are all well and good, but as anyone familiar with the cryptocurrency markets know, the best cryptocurrency from a technical perspective does not always make for the best investment. So how else can we decide between Bitcoin vs Binance Coin?
When weighing up whether to invest in Bitcoin or buy Binance Coin in 2021, we need to consider a variety of factors. Firstly, analysis of historic price movements can offer clues to how a coin’s price is affected by certain market forces. We can also consolidate the technical analysis of leading crypto platforms to build an idea of what to expect in the coming months.
Finally, it’s also worth paying attention to what key finance industry figures have to say. Sometimes, comments from a leading authority like Mike Novogratz or Elon Musk are enough in themselves to drive prices up, other times, comments are made off the back of some of the most in-depth analyses available.
Bitcoin Vs Binance Coin: Price History
The price history of coins is the only 100% reliable information we have, so it should always be included in any price prediction. If nothing else, it can indicate how coins have weathered particular political or economic events and thus how they may be affected by such events in future.
It’s fair to say that Bitcoin has experienced some pretty impressive growth throughout its existence. Like almost all cryptos, it started trading for pennies and didn’t even reach parity with the US dollar until 2011.
Check Out: Why Bitcoin Is Going To Explode In 2021
However, since then BTC has experienced a meteoric rise. Between 2011 and 2013 the price of a single Bitcoin token surged as high as $1,242 - which meant those who chose to invest in Bitcoin early on saw huge returns.
BTC then hit another record price of $19,783.06 in 2017, which is when mainstream institutional investors started to take notice and add crypto to their portfolios. Whilst the price has tumbled several times since 2017, at the time of writing Bitcoin has smashed its previous record and in February 2021 had peaked at just over $50,000.
Binance Coin has not had a typical price trajectory, in that it has stayed within a reasonably narrow price range for most of its existence. BNB also surpassed the US dollar in a surprisingly short amount of time - within its first year of trading. By January 2018, it had reached a high of $23.91 - not a huge sum per token, but still impressive growth for a year of trading.
Read Also: Pros And Cons Of Investing In Binance Coin
For the next 18 months or so, the price of BNB bounced around between $10 and $20 before experiencing a bull in the summer of 2019 that saw prices rise to a record high of $38 in July of that year. However, Binance Coin quickly returned to its $10 - $20 bracket and fluctuated within that range until the end of 2020.
However, in the first few weeks of 2021, Binance Coin went stratospheric. An influx of new apps and exchanges developed on its recently released smart network, combined with the cessation of legal proceedings against Forbes saw the price of BNB soar to over $338, making it the third-largest cryptocurrency by market cap.
Bitcoin Vs Binance Coin: Future Predictions
Naturally, the sudden surge in BNB’s price made any existing price forecasts somewhat redundant. However, most leading crypto platforms have endeavoured to re-evaluate things. Bitcoin has also experienced record growth in the opening of 2021, so future predictions are where the competition of Bitcoin vs Binance Coin really heats up.
It’s safe to say that BTC has some fairly positive forecasts for 2021. TradingBeasts, for example, predicts that Bitcoin will hold onto its recent price surge and continue to trade well above an average price of $40,000 for the rest of the year, climbing steadily to $46,143 by December. These are average prices but the platform predicts that BTC could reach as high as $57,000 before the year is out.
One of the more optimistic predictions comes from The Economy Forecast Agency. The platform believes that BTC will not only hold its recent growth, but actually continue on a similar trajectory, breaking $100,000 per token by the end of the year.
DigitalCoinPrice lands somewhere in between TradingBeasts and The Economy Forecast Agency, predicting that Bitcoin will reach a very respectable average of $84,000 per token by December 2021.
Despite some considerable divergence, most of the top crypto analysts are predicting growth for BTC so anyone who has sought to buy Bitcoin in 2021 can reasonably expect a positive return on their investment.
DigitalCoinPrice has been quick out of the blocks with its revised Binance Coin price prediction. The platform has the coin’s impressive bull run tapering off slightly in the run-up to the summer, before rallying again to $435 in September. The platform then sees Binance Coin finishing the year at $372.51 - an increase of almost 44% on its price at the time of writing.
Meanwhile, WalletInvestor is predicting that BNB will actually continue its run of success and continue to climb throughout 2021. The platform has the price of Binance Coin growing steadily month by month, until reaching a high of $468 by the end of December.
Once again, The Economy Forecast Agency is remarkably bullish on Binance Coin, with its analysis suggesting that BNB will more than double in price between now and the end of the year, closing December on a high of $696.
Bitcoin Vs Binance Coin: What the Experts Say
The final section of our Bitcoin vs Binance Coin analysis canvasses what some of the world’s leading financial and cryptocurrency figures have to say about each token.
Bitcoin received a huge boost when Elon Musk’s Tesla revealed a $1.5 billion BTC acquisition. in February 2021. The news spurred Bitcoin on towards its record-breaking run, which saw the coin reach an all-time high of over $54,000.
Bitcoin has also received plenty of backing from some fairly prominent voices from the mainstream financial world. Financier Mike Novogratz - a long-time Bitcoin proponent - believes that BTC is well on its way to breaking the $100,000 barrier. “It feels like we’re going to consolidate a little bit in this US$50,000 area ... but the next big leg is up to US$100,000,” said the founder and chief executive officer at Galaxy Digital Holdings Ltd.
Meanwhile, Visa’s CEO Al Kelly has also weighed in on the Bitcoin debate, describing the cryptocurrency as “digital gold” and suggesting that BTC could potentially be added to his company’s payments network.
This is all great news for anyone who has chosen to invest in Bitcoin, but what about Binance Coin? Suffice to say the altcoin doesn’t have quite the extensive backing of Bitcoin, but it isn’t without its celebrity supporters.
Crypto analyst and trader Nicholas Merten has lauded BNBs “practically non-existent” fees on the Binance Smart Chain. He did speculate that the BNB bull may now be exhausted, but continued to say that investors could add exposure to it if they believe there’s at least a 10% chance of it dominating the DeFi space.
Elsewhere, Binance Coin also has an unlikely backer in KISS rock legend Gene Simmons. Simmons, who is also a successful investor, insisted he was not promoting the coin, but nonetheless took to Twitter to announce he had bought $300,000 worth of BNB.
It looks as though the Bitcoin vs Binance Coin competition is a little one-sided when it comes to expert opinions, but it should be noted that the mainstream financial world is still somewhat behind the times when it comes to the latest altcoins.
How does Binance Coin measure up against other cryptos?
Weighing up Bitcoin vs Binance Coin is one thing, but it should be remembered these tokens have vastly different infrastructures and it could even be argued that their primary use is different. Whereas Bitcoin was intended solely as a peer-to-peer payments system, Binance Coin has taken on a life as an exchange medium.
A more interesting avenue to explore is how Binance compares to other cryptos - not least Ethereum, which is a kind of pseudo-parent for Binance Coin as it originally played host to the newer coin.
Etheruem is the second biggest coin by market cap, so it could well be the next giant to fall in BNB’s wake. Industry experts have mooted a potential “flippening” event, where Binance Coin might topple Ethereum and this is a very real possibility if there is an increased uptake of Binance-based DeFi apps over Ethereum-based equivalents.
The Binance Network currently hosts 67 decentralised applications, which is still far behind Ethereum, but the new Binance Smart Chain offers much lower fees and already plays host to two major players in the DeFi dapps landscape: Venus and PancakeSwap, which have already generated a transaction volume of $14 billion and $1 billion respectively.
What happens between Ethereum and Binance Coin remains to be seen, but it certainly looks as though Litecoin won’t be retaking its place as the number 3 cryptocurrency any time soon.
Binance Coin Vs Bitcoin: Conclusion
It may appear as though Bitcoin vs Binance Coin is no real competition, but the latter has experienced a bigger surge in price in terms of percentage - and after all, it's the percentage that counts for investors.
Whether you choose to invest in Binance Coin or buy Bitcoin in 2021, most analysts believe you can expect to see some fairly impressive growth. Of course, estimates vary hugely but both tokens are tipped for appreciation across most of the coming year.
Whereas Bitcoin is experiencing more mainstream success than ever before, the potential of the new Binance Smart Chain is only beginning to be realised. In reality, arguing for Bitcoin vs Binance Coin is a moot point - the smart investor picks both for their portfolio.
So, is Binance Coin a better investment than Bitcoin?
It is very difficult to compare Bitcoin vs Binance Coin as they operate in very different ways. In terms of investment, it’s better to view them as complementary to each other as part of a diversified portfolio. Ultimately both are tipped for growth and choosing one or the other could prove to be a tough call at this stage.
Binance Coin experienced unprecedented growth in the opening weeks of 2021 and, whilst things calm down a little in March/April, the altcoin is expected to keep appreciating going into 2022. Choosing to invest in Binance Coin now - as part of a diversified portfolio - could well prove to be a good decision.
How to Invest in Binance Coin and Bitcoin
The first thing you’ll need to do is open an account with a reputable broker. For most investors, we recommend eToro as it is one of the leading platforms currently on the market and offers access to a good range of coins. There are also plenty of learning materials available for novice investors.
You can open an account within minutes - all you need is a few personal details and a valid form of ID for verification purposes. Once you’re up and running, you’ll have quick access to the latest crypto prices and can start making trades at the touch of a button.
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What’s the best cryptocurrency to invest in 2021?
The opening months of 2021 have already been a very exciting time for the cryptocurrency market and some coins have surged to record-breaking highs. Most casual observers have probably already thought to invest in Bitcoin, but there are also several altcoins that could prove to be a better investment - these include Dogecoin, Litecoin and Binance Coin.
Where can I buy cryptocurrency in 2021?
One of the best platforms for buying cryptocurrencies is eToro. It offers an intuitive user interface and plenty of tools for monitoring price movements.