Why invest in BNB? What are Binance investment pros and challenges? Here is everything you need to know about BNB investing.
Binance Coin is arguably the most basic and non-innovative cryptocurrency there is. But, this digital coin is one of the most popular - with a current market capitalization of well over $85.6 billion.
After all, it is backed by one of the largest cryptocurrency exchanges in the space - Binance. As such, if you want a piece of the action, you can easily invest in the Binance Coin from the comfort of your home.
In this guide, we explain the safest and most cost-effective way to invest in the Binance Coin (BNB). We also explore what the future holds for this digital currency, how you can make and lose money, and which platform you should consider making the investment with.
How To Invest In Binance Coin (BNB) In 5 Easy Steps
If you want to know how to invest in Binance Coin right now, follow the five simple steps outlined below.
Step 1: Open an account with a regulated cryptocurrency exchange
Step 2: Deposit funds
Step 3: Choose how much you want to invest in Binance Coin
Step 4: Confirm the investment
Step 5: Leave your BNB Coins investment stored
End-to-end, the above steps should take you no more than 5 minutes to complete. As such, the process of how to invest in Binance Coin could not be simpler!
What is Binance Coin?
As the name implies, Binance Coin (BNB) is a digital currency backed by the popular exchange platform of the same name. For those unaware, Binance is the largest cryptocurrency exchange in terms of market capitalization.
In the prior 24 hours alone, the platform facilitated almost $2 billion worth of trading activity. These numbers are simply astonishing when you consider that the exchange was only launched in 2017.
In order to capitalize on its huge customer base, Binance made the decision to create its own cryptocurrency. Initially, there was nothing proprietary about the underlying technology, as the Binance Coin was an ERC-20 token built on top of the Ethereum blockchain.
However, Binance Coin has since made the transition over to the Binance Chain Mainnet. In terms of its sole purpose, the Binance Coin allows users of the exchange to benefit from lower trading commissions.
Initially, this was set at a reduction of 50% but currently stands at 25%. Although this might not sound overly appealing, it really is for serious online traders - especially those engaged in day trading, high-frequency trading, or scalping.
How Does the Invest in Binance Coin (BNB) Process Work?
It is important to note that you don’t need to use the Binance exchange to reap the rewards of this digital currency. On the contrary, you can make financial gains much in the same way as any other cryptocurrency.
Put simply, the Binance Coin has a real-world, market value that goes up or down on a second-by-second basis. In this sense, it’s no different to traditional stocks and shares - insofar that the value of Binance Coin is dictated by market forces.
As such, as more and more invest in Binance Coin, demand will outweigh supply and thus - this should see its value increase. In turn, if you are able to sell your Binance Coin holdings at a higher price than you originally paid, you will walk away with a profit.
To illustrate how a Binance Coin investment works in practice, check out the simple example below:
- You open an account with an online broker that sells Binance Coin
- You deposit $750 and invest the full amount into Binance Coin
- At the time of the purchase, Binance Coin is worth $513
- You hold on to BNB coins for three years
- When you get around to cashing out, Binance Coin is worth $1,026
- This translates into a price increase of 100%
As we have highlighted above, you initially paid $513 for each BNB coin and cashed out when the digital currency was worth $1,026. As such, a $750 invested at gains of 100% works out at a realizable total profit of $750.
In order to facilitate the above trade in the safest and most convenient way, you are advised to use a regulated online broker. We discuss the ins and outs of how this works a bit later on.
Why Should you Invest in Binance Coin (BNB)?
At first glance, you’re not alone in thinking that Binance Coin is far from an innovative invention. However, there is more than meets the eye with this top 3 cryptocurrency - which we elaborate on in more detail below.
Exchange Volumes Continue to Rise
Make no mistake about - Binance is home to more trading volume than virtually every online stockbroker in the space. As we briefly noted earlier, the platform facilitated almost $10 billion worth of buy and sell orders in the past 24 hours alone.
As such, this is hugely beneficial for those investing in Binance Coin for several reasons. Firstly, the more money that is changing hands at the platform, the higher the likelihood that traders will look to reduce their commissions by holding a stash of BNB Coins.
As trading volumes increase, this in itself creates demand for the cryptocurrency. Secondly, Binance as an exchange doesn’t need the wider cryptocurrency markets to be in an upward swing. On the contrary - and much like traditional brokerage sites, Binance benefits from increased volatility.
In other words, whether the cryptocurrency space is in a rising or falling market, Binance will still benefit. After all, it will continue to collect its trading commissions irrespective of which way traders decide to speculate!
Binance Coin ‘Burning’ Program
Any seasoned economist will tell you that if an asset has a limited supply, then, in theory, its value should continue to rise over the course of time. This is no different from gold, silver, or even oil.
In the case of Binance Coin, the overall supply will be capped to just under 180 million. At the time of writing, there are more than 155 million coins in circulation.
However, it is crucial to note that the supply of Binance Coin is actually moving in the opposite direction. This is because of the exchange’s ‘burning’ program.
In a nutshell, the team at Binance is committing to repurchasing outstanding BNB coins and subsequently burning them. This means that the coins no longer exist and thus - the supply is reduced.
And when the supply of an asset gets smaller - naturally, this should have a positive impact on its price.
Huge Price Action Since Binance Coin was Launched
When it really comes to it, one of the most effective ways of assessing a cryptocurrency from an investment perspective is to look at its historical price action. This allows us to gauge how the value of Binance Coin has changed over time.
After all, there are thousands of cryptocurrencies that went through an initial, parabolic upward swing, only to then lose 95% of their valuation. Very few of these cryptocurrencies have ever recovered.
In the case of Binance Coin, it’s been up, up, and away ever since it was first launched in 2017. Back then, those backing the digital currency would have paid a measly $0.10 per coin.
Fast forward to mid-2019 and the very same Binance Coin was worth over $37 dollars. This means that in two years of trading, BNB Coin increased in value by over 36,000%. In other words, had you invested just $100, your Binance Coins would have returned you over $36,000 at its peak.
With that said, Binance Coin then took a turn for the worse, hitting lows of just under $10 in March 2020. Since then, there has been no stopping Binance Coin, with the digital currency surpassing $675 in March 2021. This translates into a growth of 6650% in just 1 year.
Read Also: Binance Coin Price Prediction Forecasts
Would You Consider Investing in Binance coin BNB?
How to Invest in Binance Coin (BNB) - Various Options Available
Unlike other popular cryptocurrencies - such as Bitcoin, Ethereum, or Ripple - you won’t have the option of using a specialist ATM to invest in Binance Coin.
This subsequently leaves you with just two options - obtain the digital currency from a cryptocurrency exchange or an online broker.
Let’s explore how these two options work.
As Binance Coin has held its own as a top 3 cryptocurrency in terms of market capitalization, it makes sense that heaps of exchanges support it. In most cases, this is traded against Bitcoin or USDT (Tether).
By opting for the exchange route, you will likely need to fund your account with another cryptocurrency. This is because most platforms do not support fiat currency methods - such as debit/credit cards or e-wallets.
If you’re wondering how to invest in Binance Coin via a third-party exchange, the process works as follows.
- You join a cryptocurrency exchange that supports BNB
- You deposit funds with another cryptocurrency - such as Bitcoin
- You then head over to the trading arena and exchange Bitcoin for Binance Coin
- You’ll pay a tiny commission - usually between 0.1% and 0.5%
- You then withdraw the BNB coins to a private digital wallet
As you can see from the above example, using a cryptocurrency exchange to invest in Binance Coin is somewhat cumbersome.
This is because you first need to fund your account with a cryptocurrency, exchange this with BNB, and then withdraw the coins out to a private wallet.
In turn, you will be 100% responsible for storing your Binance Coin holdings. Then, when it comes to cashing out your Binance Coin investment - you need to repeat the above process but in reverse.
This is why - from a convenience and security perspective, the best way to invest in Binance Coin is through a regulated online broker.
Binance Coin Broker
If your primary objective of investing in Binance Coin is to make financial gains, then why waste your time going through a third-party exchange? The process is slow, cumbersome, and often fraught with hidden fees.
Instead, by using an online broker to invest in Binance Coin, you will enjoy a smooth and cost-effective experience.
First and foremost, you will be using a regulated online broker - meaning that you will benefit from investor protections, KYC checks, and an all-around safe and secure environment.
In turn, as your chosen broker is licensed by the appropriate bodies, it can accept fiat currency deposits and withdrawals.
For example, online broker eToro - which is licensed by the FCA, ASIC, and CySEC - as well as being registered with FINRA, supports debit/credit cards, bank transfers, and even e-wallets like Paypal.
This means that you can open an account and deposit funds in a matter of minutes. If that wasn’t enough, eToro also allows you to invest in Binance Coin commission-free. The only fee that you need to consider is the 0.5% FX currency conversion for non-USD deposits.
Finally, and perhaps most importantly, you don’t need to worry about withdrawing your BNB coins to a private wallet. Instead, eToro will securely store your Binance Coin investment until you are ready to cash out.
How To Choose A Platform To Invest In Binance Coin
Although we would argue that eToro is by far the best online broker to invest in Binance Coin, it’s also a good idea to perform some research yourself. After all, no-two brokers are the same, so it’s best to check a few things off before you choose a provider.
The most important metrics to consider are listed below:
Licensing and Reputation
As we noted above, regulation is crucial when you invest in a cryptocurrency like Binance Coin. The previously mentioned bodies - namely the FCA, CySEC, ASIC, and FINRA - are heavily involved in the traditional brokerage industry. This means that they have strict conditions that they require all of their licensees to follow.
For example, licensed brokers are required to:
- Keep client money in segregated bank accounts
- Have their books audited
- Apply KYC controls on all new account holders
- Clearly display the risks of investing in crypto assets
All in all, by using an unregulated online broker to invest in Binance Coin, you are putting your capital at risk.
Fees to Invest in Binance Coin
As is the case with any asset you wish to buy, investing in Binance Coin will attract a trading fee of some sort. Your chosen broker is likely to charge this as a variable fee - which is multiplied against the amount you choose to invest in Binance Coin.
For example, the platform in question might charge a commission of 0.5% per slide. If you chose to invest in Binance Coin at a stake of $500 - you would pay $2.50. If you sold your Binance Coin investment when it was worth $2,000 - your 0.5% commission would amount to $10.
As we covered earlier, eToro doesn’t charge any commission to invest in Binance Coin - so you can save heaps of money.
In addition to trading commissions, you also need to consider transaction costs. For example, the Binance exchange itself charges 2% to deposit funds with a debit or credit card. eToro charges 0.5% - and nothing on USD-denominated payment methods.
Minimum Binance Coin Investment and Payments
You also check what the broker’s policy is on account minimums. This starts at the very offset with a minimum deposit amount. This is usually higher on debit/credit card deposits than it is on bank wire transfers.
However, the latter is super-slow - often taking 3-7 days for the transaction to show up in your account. Debit/credit cards and e-wallets, however, are processed instantly.
Once you’ve crossed off the minimum deposit, you also need to check what the minimum Binance Coin investment amounts to.
As always, this will vary from broker to broker. But, at eToro, the amount stands at just $25. This means that as long as you meet this small minimum, you can invest in Binance Coin at any amount of your choosing.
Storage and Cashing Out
We mentioned earlier that investing in Binance Coin via a third-party exchange will mean that you need to withdraw the coins out to a private wallet. Actually, you are not obligated to do this, as you can keep the coins in the wallet of your chosen exchange.
However, it is to our knowledge that the vast majority of exchanges supporting BNB coins operate in an unregulated manner. This includes Binance itself - which is still yet to obtain a conventional license from the likes of the FCA or ASIC.
In the case of eToro, you can safely store your coins with the broker and not worry about internal malpractice. Once again, this is because the platform is regulated on three fronts - plus it is registered with FINRA. The latter is crucial for those of you based in the US.
Check Out: Will Binance Coin Make Me Rich?
Are You Ready to Invest in Binance coin BNB?
How to Invest in Binance Coin (BNB) Today - Step-by-Step Walkthrough
Got your finger on the pulse and want to know how to invest in Binance Coin (BNB) right now? If so, follow the steps below to get your hands on some BNB coins in less than 10 minutes - commission-free!
Step 1: Open an Account
Visit the eToro website and open an account. You’ll need to provide some information pertaining to your identity and financial standing. This should take you less than 5 minutes to complete.
Step 2: Upload Some ID
You will need to upload a copy of your passport/driver’s license and proof of address. This can be a utility bill or bank account statement.
Note: If you are not investing more than $2,250 into Binance Coin right now, you can upload the above documents at a later date.
Step 3: Make a Deposit
You will now need to meet a $50 minimum deposit, which you can facilitate with the following payment options:
- Debit Card
- Credit Card
- Bank Transfer
If you want to invest in Binance Coin instantly, opt for any payment method listed above - apart from, a bank transfer.
Step 4: Search for Binance Coin (BNB)
eToro offers thousands of financial instruments on its platform, so it’s best to search for ‘Binance Coin’. When the result pops up, click on the ‘Trade’ button.
Step 5: Complete Binance Coin Investment
All you need to do now is enter the amount that you wish to invest in Binance Coin. Click on the ‘Open Trade’ button to complete your commission-free investment at eToro.
Step 6: Cashout Your Binance Coin Investment
You can sell your BNB coins at eToro 24 hours per day, 7 days per well. Simply head over to your portfolio from the main dashboard area, and click on the ‘Sell’ button next to your Binance Coin investment.
The cash will be placed into your eToro account instantly - which you then withdraw out.
eToro – Buy Binance Coin BNB With 0% Commission
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
How to Invest in Binance Coin - The Bottom Line
As we have noted throughout this guide, there is nothing overly innovative or revolutionary about the Binance Coin. In fact, the digital currency has little use outside of the Binance exchange.
However, this hasn’t stopped the value of Binance Coin from increasing by a substantial amount since it was launched in 2017. This is because the Binance exchange is now facilitating billions of dollars worth of trading activity each and every day.
For as long as this remains the case, the Binance Coin will remain in demand for large-scale investors that wish to reduce their trading costs. And of your course, you can easily invest in Binance Coin on a speculative basis - meaning that you can profit if its value continues to rise.
If you’re wondering how to invest in Binance Coin right now - you can complete the process in less than 10 minutes with regulated broker eToro - and not pay a single cent in commission.
How much should I invest in Binance Coin?
You should only invest an amount that you can realistically afford to lose. After all, like most investments, there is no guarantee that you will make money by purchasing Binance Coin. With that in mind, it’s worth considering eToro - which allows you to invest in Binance Coin at a minimum of just $25.
Is Binance Coin BNB a good investment in 2022?
After hitting lows of $10 in March 2020, Binance Coin has since surpassed the $600 mark. This means that the digital currency has had a great 2020-2021. In terms of what 2022 holds for the project, this is largely dependent on the trading volumes that Binance is able to generate.
How do I start investing in Binance Coin?
By using eToro to invest in Binance Coin, the process takes minutes. Simply open an account, instantly deposit some funds, and invest at least $25 into Binance Coin.
Can I invest $100 in Binance Coin BNB?
Yes, as eToro has a minimum investment policy of just $25. As such, you can invest any amount into Binance Coin as long as you meet the minimum!
Can you lose money on Binance Coin?
Yes, if the value of Binance Coin goes down, you can and will lose money. This is no different from any other investment class.