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Is Binance Coin A Good Investment?

20 Min Read
Last Updated March 27th 2021

Binance Coin (BNB) is the latest crypto in the investment space which is rallying at an alarming speed. This rally comes after a DeFi protocol which runs on its Binance Cryptocurrency Exchange; PancakeSwap surpassed Uniswap from Ethereum to become the largest Decentralized Exchange (DEX).

If you want to buy Binance Now, check out eToro Exchange!

Binance Coin: What Is It?

trading binance coin

Binance Coin (BNB) is a popular cryptocurrency to investors who have been in the investment game for a long period of time. Currently, it is becoming popular among novices in the trading fraternity and skimmers of financial information as a result of its bullish run.

Binance Coin is now touted as the third crypto after Bitcoin (BTC) and Ethereum (ETH) to make gains or serve as a hedge for investors. Several discussions have started cropping up on multi-asset brokerage platforms such as eToro with regards to the future of the coin in terms of growth and potential in the market. Such a huge rise in interest is the resultant effect of the bullish run which has galvanized the crypto world after the miracles of the two most popular and largest cryptocurrencies by market capitalization (Bitcoin and Ethereum).

Binance Coin is a cryptocurrency that can be used to trade as well as pay fees on the Binance Cryptocurrency Exchange (BCE).

Aside from the primary use of the coin on BCE, it can also be used as digital currency when investing in Exchange Traded Funds (ETFs), stocks as well as other assets.

Who Created Binance Coin and When did it Start Trading?

Chanpeng Zhao founded Binance in 2017. He is a developer who has been extensively involved in the creation of high-frequency trading software. Zhao has previously served as OKCoin’s Chief Executive Officer and was a part of Blockchain.info’s development team.

Why was it created?

The coin was created with the intention of operating a native crypto asset called BNB which is meant to offer an alternative way to pay for fees charged to traders using the Binance Cryptocurrency Exchange (BCE).

Where was it created?

Initially based in China, Zhao moved Binance’s servers and headquarters to neighbouring country Japan as a result of strict regulations from the Chinese government which ultimately banned the trading of all forms of cryptocurrency in September 2017. Japan was supposed to be a safe haven for the crypto company but the country’s Financial Security Agency (FSA) announced that “with effect from June 2018, there will be an outright ban on all cryptocurrencies which provide a sufficient degree of anonymity”. Binance as a result set up offices in Taiwan and before Japan’s ban announced in March 2018 that BNB had intentions of opening an office in Malta. After signing a Memorandum of Understanding (MOU) with the government of Bermuda, Binance did the same with Malta Stock Exchange to develop a platform for trading security tokens. Currently, the headquarters of Binance is in Malta.

How many Binance Coins are in Supply?

After the initial coin offering (ICO) was launched in July 2017, BNB tokens were distributed among three participants (Binance Founding Team, Angel Investors and General Public).

A total of 200 million Binance Coins were distributed, 50% which is represented by 100m for Public Sale, 40% which is represented by 80 million for the founding team and 10% which is represented by 20 million for angel investors.

Due to token burning which is carried out by the Binance Team, the total and maximum supply of Binance Coin is 170, 532,785 BNB with a current circulation of 154, 532, 785 BNB.

Binance Coin: Will It Be A Good Investment In 2021?

Binance Coin is a good investment in 2021. According to Arslan Butt, Index Analyst for FX Leaders “Binance is in the middle of a product development drive which will see the launch of several new cryptocurrency products” which will see the exchange compete for a bigger share of the Decentralized Finance (DeFi) market.

Digital Coin Price predicts that BNB will be trading at a price of $409.81 at the end of June and will likely end the year with a trading price of $881.64. This bullish trend will be backed by Binance’s Decentralized Exchange (PancakeSwap) which has so far in 2021 given Ethereum’s Uniswap great competition as to which Decentralized Exchanged (DEX) will dominate DeFi in the near future.   

So, is Binance Coin a good investment?

Most investments come down to the risk vs reward factor. In other words, do the potential rewards outweigh the possible consequences of the risks? Binance Coin certainly has some risk factors, but it is becoming more and more mainstream and has the product development and the DeFi market to . 

Put simply, Binance Coin is low-risk asset with lots of potential rewards. It’s something you should definitely do some research before you consider adding it to your portfolio. 

BNB has all of a sudden become numerous investors pick as the crypto asset which will get closest to or break the $1000 price milestone in 2021.

The main drivers of Binance Coin have to deal with investors doing everything in their capacity to find other options of trading in the Decentralized Finance (DeFi) space. For the time being, several investors wholesomely believed in Ethereum’s upgraded platform which is called Ethereum 2. 0.

Ethereum’s platform made use of Decentralized Finance and had Uniswap as its lead protocol which was making extreme waves in the crypto stratosphere in terms of lending, borrowing and investing.

Uniswap empowers traders, developers and liquidity providers in a financial marketplace which is accessible and open to all. Uniswap’s decentralized exchange (DEX) hit $100 billion dollars in trade volume on Monday, February 15.  This is the first Decentralized Exchange (DEX) to reach this whopping number. In January 2021, Uniswap hit $20 billion in monthly volume for the first time. In a twist of events within a short period of time, investors have been searching for new ways to trade and make great returns on their investments.

Fortunately, many of them have found another Decentralized Exchange (DEX) called PancakeSwap which brings a direct competition to Ethereum’s Uniswap. On February 19, Binance’s PanCakeSwap became the first Decentralized Exchange (DEX) to have trade volumes of $1.6bn passing through its platform daily, according to CoinGecko.

The DEX which runs on the Binance Smart Chain posted numbers of PancakeSwap surpassing Uniswap on Twitter which were represented by $1,298,899,262 and $1,297,138,344 respectively. PancakeSwap’s trade volumes have been extremely impressive. It has shot up from $37 million on 1st January 2021 to $1.1 billion on 17th February 2021 which is represented by a 2,800% increment.

Binance Coin (BNB) ended 2020 on a high with a trading price of $37.38 on December 31. The novel token was trading at $44.31 on the 1st day of February, 2021 and closed at $332.62 on Friday, February 19. As at the time of writing this article, the coin was trading between $280 and $295. Binance Coin which is the native cryptocurrency of the Binance Smart Chain has a market capitalization of $45.652bn. 

Read More: Pros And Cons Of Investing In Binance Coin, Will It Be A Millionaire Maker?

Binance In Comparison To Ethereum

binance coin

Network Speed

Ethereum made an upgrade to its platform to increase security and transaction speed. It introduced Ethereum 2.0 which employs a proof of stake (PoS) mechanism whereas Ethereum 1.0 (old platform) used a proof of work (PoW) mechanism. The network in Ethereum 2.0 supports 100,000 transactions per second whereas the network in Ethereum 1.0 supported up to 30 transactions per second. Additionally, most proof of stake (PoS) networks have decreased network security because it comprises a small set of validators which makes it more centralized. But the new upgrade is secured because it is decentralized and requires a minimum of 16,384 validators.

Binance’s Smart Chain (BSC) facilitates more than 1.4 million transactions per second which has made Binance the world’s largest cryptocurrency exchange.

Cost

The increase in the number of trade volumes in PancakeSwap (Binance) has led to investors finding a relatively cheaper platform to carry on their trading activities.

Ethereum’s bullish run so far had one major drive which is the cost of processing through its Decentralized Exchange, Uniswap, which has hit double figures. It has been a blessing and a curse at the same time. As a blessing, miners of Ethereum (ETH) have been minting huge sums of money which sounds good. Unfortunately, this is putting a huge dent in the financial resource of Decentralized Investors. A simple transfer from one wallet to another wallet will set you back at least $10. Data from BIT INFO CHARTS reports that “the average transaction fee is upwards of $10 and can sometimes cost more than $20”. As William Foxley of CoinDesk puts it, “gas fee is pushing numerous investors into other DeFi projects”.

Coincidentally, they seem to have found one in competitor Binance’s Decentralized Exchange, PancakeSwap. On Friday, February 19, 2020, The BNB price surged another 50% flipping Tether (USDT) as the third-largest cryptocurrency by market capitalization. The most appealing aspect of investing in BNB for you as a trader is that there is a discount of 25% for making transactions with BNB on the Binance’s Exchange. This discount was far better when it first launched its Initial Coin Offering (ICO) as it stood at 50%. Overall, Binance and Ethereum are similar in many ways but differ slightly in terms of network speed and average transaction costs.

Will Binance Coin Continue To Soar In 2021?

Binance Coin started 2021 on a very bullish note, and that trend seems set to continue for the cryptocurrency.

Most experts agree that Binance’s price could cross $1000 by the end of 2021, and going by recent trends; it seems to be on track to meet or even surpass those expectations.

BNB will continue to soar in 2021 as more companies continue to integrate the coin into their system to be used as an option of payment. Additionally, BNB is being used as collateral for crypto-backed loans which has seen a spike in the number of people who are patronizing DeFi especially on its PancakeSwap protocol.

After the successful sale of Fetch.AI (FET) token and BitTorrent Token (BTT) and Celer Network, “Binance plans on reviving initial coin offerings by generating quality tokens with strong user cases. This will in the long run encourage massive participation which increases trade volume, increases the token’s adoption and results in an increase in price.

According to Messari (an online database for the crypto industry), “the return on investment for Binance in the last six months increased from 154% in the last year to 560%.” 

According to experts on Long Forecast, BNB will be worth $565 by the end of 2021 and up to $835 by 2025. Digital Coin Price predicts BNB will hit new all-time highs of $449.41 a year from now. 

So what comes next for Binance Coin? 

Binance launched its first BNB Exchange Traded Product on the Swiss Stock Exchange (Ticker: ABNB), further proving BNB is a great instrument for crypto and traditional markets. BNB serves other functions such as being used on different merchants across the world. The token can be used for purchasing lottery tickets, virtual gifts and serves as a myriad of purposes in the world of entertainment.

Moreover, BNB can be used for payments across several industries which include 217 shops and markets, 27 e-sports and fantasy gaming networks, 12 gambling websites, 66 business services, 37 web marketing and development services, 17 tourism, travelling and renting (hospitality services), 222 internet services, 128 business services and 25 offline services.

Popular among all these industries are travelling and hotel booking websites Travala.com, Greitai, Xceltrip and Clube Turismo, clothing company Park and Finch, online security website WPSec.com, web hosting company HostMeNow Limited, finance company Biteris, jewelry store Rudraxis and cryptocurrency payment processor Coin Payments.

Several new companies have joined the Binance family and accept tokens as payments and they are consulting and design firm My Tiny Enterprise, art shops Bobby Gongs and Dope! Gallery, sports and entertainment company Xtreme Spirit & Partner Brands and pharmaceutical company BCHLIX Inc.

The novel token can also serve as collateral for loans on platforms such as YouHodler. YouHodler is a Swiss-based company and through its YouHodler FinTech platform which is focused on crypto-backed lending with “stablecoin” loans (PAX, USDT, USDC and TUSD), fiat (EUR and USD), crypto (BTC), high-yielding savings accounts as well as crypto/crypto and crypto/fiat conversions. In 2019, YouHodler welcomed BNB to its list of collateral and conversion options. CEO of YouHodler, IIya Volkov stated that “BNB does a great job integrating crypto into the traditional finance world, so BNB will grow in importance over time and now, our users can take advantage of this.”

Another FinTech Group which has been serving millions of people across Europe for more than ten years, Nexo has also added Binance Coin as Collateral for Instant Crypto-Backed Loans and this was made possible from July 1, 2018. Nexo is backed by Credissimo which has always operated under strict compliance with supervision by several European banking and financial services regulators. What Nexo does is to assist investors to unlock the value of their wealth by providing them with instant loans in USDT (Tether), USD and EUR against their crypto-holdings. Rather than sell their assets, investors can pledge them to Nexo and obtain immediate liquidity and as well keep the future value of the increment in price of their tokens and cryptocurrencies.

Nexo users were already borrowing huge amounts by using NEXO’s Dividend Token, Ethereum (ETH) and Bitcoin (BTC) before the Binance coin was added.

Binance Coin (BNB) provides borrowers with a discount of 50% and entitles them to a 30% dividend from the net profit of the company.

In June 2020, Kava Labs’ DeFi Lending Platform went live with BNB Collateral Support. The platform allows network participants to earn rewards, USDX (Kava’s crypto-backed stablecoin) loans and Binance Coin (BNB Collateral).

A representative from the company said, “With this launch, Kava Labs aims to open the doors of Decentralized Finance to the BNB community and soon it plans to do the same for the greater crypto space”.

In October 2019 INLOCK Platform announced that BNB can now be used as collateral for loans. INLOCK claims it's one of the safest places when it comes to crypto-backed loans. This is backed by providing a platform whereby customers can store a combination of their cryptocurrencies in a single contract to lessen the negative effect of short-term price fluctuations. INLOCK was on the ERC-20 network with BNB in February 2019 but dropped the ERC network support and switched to Binance Smart Chain.

Binance VISA Card has also been introduced to serve as another option of payment to enable you buy the things you love with crypto. Available on more than 60 million merchants, you just transfer crypto from your spot wallet to your card wallet and you are ready to buy whatever you want anytime and anywhere in the world. 

In 2020, Binance announced Bundle, an African-focused social payments systems app for crypto and cash which allows users to send, receive and request from their peers.

In July 2020, Binance acquired Swipe (a multi-asset digital wallet and VISA debit card platform which allows users to spend, buy, convert and sell cryptocurrencies for an undisclosed amount). Swipe and Binance want to help bridge the gap between digital assets and fiat currencies by pushing for the adoption of cryptocurrencies in the mainstream. This will enable purchases and payments to be made purely through traditional financial systems.

With such acquisitions and use across a diverse range of industries, there is a huge potential for growth in the near future. Binance Coin (BNB) also thrives on other factors such as PancakeSwap which is making huge gains in the Decentralized Exchange space and goodwill of the performance of the largest cryptocurrencies (BTC and ETH). With that said, Binance’s Exchange is reaching trading volumes which was not expected before and has demonstrated that it can survive on its own as part of DeFi growth and the quality of its projects.

Binance Coin Price Prediction In 2021 And Beyond

And what are experts saying in terms of Binance Coin (BNB) price predictions?

As an investor, taking your eyes off the crypto world now is like throwing a pot of gold into the ocean. Every second, minute and hour counts. You can make strong gains within a giving day and a huge sell-off leaves you in the red the following day.

binance coin price prediction chart

According to Digital Coin, Binance Coin will trade in the price of $1,201.33 up to $1,481.37 in the future. It sees the novel token having a closing of at least $460.37 at the end of 2021. 

The Wallet Investor does not believe Binance Coin will cross $1,000 in 2021

In a case study approach by Crypto Market experts, Coinpedia reported that BNB may be trading at $500 by the end of the year. 

BNB will hit $727.53 by the year’s end, according to Gov. Capital

“BNB will reach new highs and will definitely hit $600 per coin in 2021 or in the early months of 2022”, Digital Coin Price

The mean price of all the predictions made by experts who contribute to these investment websites is $637.506. This means that there is growth in the novel token.

On the other hand, there are numerous experts such as Sarah Smith of Investor Place who made bold claims about Binance Coin having $200 as its milestone on Thursday, February 18, only to see the digital asset trade between $223.342 and $309.086 during the weekend of 20th and 21st of February, 2021.

Crypto assets are volatile but monitoring daily news and more importantly, comments from other investors will help you better determine its price so that you wouldn’t suffer any form of losses along the way. 

Don't miss: Binance Coin Price Predictions 2021-2025

How Do I Invest In Binance Coin?

There is a time to read highly researched articles about crypto and there is a time to put all the information together and take action which is to invest in the novel token. In the online world, there has been a boom in the finance world which has led many individuals into developing high frequency trading platforms. 

Inasmuch as you would like to get on with your investments, you must take a painful decision that is realistic to thoroughly research about online brokerages before you trust them with your money. 

At Trading Education, it is our hallmark to deliver the best trading tips and ideas to our readers and among all the brokerages, the one which ticks all our boxes in terms of security, scalability and quality is eToro.

There are two ways to purchase Binance Coin on eToro.

The FIRST WAY involves four (4) different phases.  

In order for you to get any account online, the first step you have to take is to SIGN UP. Kindly ensure that the details you provide are authentic. But it is crypto investing, can’t I remain anonymous? You should note that if you decide to use the coin’s parent company Binance Exchange to purchase coins, you will need a verified account. Unfortunately, this leaves a footprint digitally of your information and lessens your quest for anonymity. Additionally, it heightens your preconceived mindset of the crypto space being a world which can only be viewed in Incognito Mode. The brokerage (eToro) has been around for too long and adds that layer of security to your account and purchased coins.

The next phase of the account creation process is VERIFICATION. As part of company policy to prevent scamming from anonymous individuals, you will go through Knowing Your Customer (KYC) process. You will be required to upload your government-issued identification cards which have your full name, date of birth, signature and date of expiry (This includes drivers license, national identification cards and passport). Additionally, you must provide bank or credit card statements or internet bills which are not more than 6 months old to help prove your address as well as your overall identity.

DEPOSITING FIAT CURRENCY is the third phase of the process. As someone who is poised in purchasing your first coins, you will go through the verification process successfully. After this, you need to upload what we know as money (fiat currency) (EURO, GBP or USD) which is an essential step towards making the purchase of BNB possible.

The last step is to BUY YOUR BINANCE COIN. Navigate to the “Binance Coin” page and your first purchase will be processed and stored on your account.

The SECOND WAY involves just a single phase which is to head straight to the “Binance Coin” page and follow the SIGN UP process which has been earlier on discussed and make your first BNB purchase.

Conclusion: Is BNB a Good Investment and How Much Will Binance Coin Be Worth?

There’s no denying that Binance coin is a very special technology that could completely change the world as the interest of Decentralized Finance has taken over the crypto space. Due to this, experts and analysts are both expecting Binance coin projected growth to reach extreme highs.

It is amply clear that Binance Coin is going to experience significant growth over the next few years. If you consider 2021 alone, the reasons stated above are enough to understand why BNB could explode in 2021.

Overall, Binance Coin (BNB) provides investors with seamless transactions and high security. The interest of Decentralized Finance has taken over the crypto investment space and has prices soaring to new highs daily. There is a huge chance that BNB will hit $1,000 at the end of the year based on crypto speculation. There is another chance that the price will range from $150 to $350 or far below. 

With Binance (BNB) using 20% of the company’s profits to burn coins quarterly, in the not-so-distant future, the total volume of coins being traded will be relatively small, capped at 100 million. This will ultimately lead to the laws of the demand and supply where the lesser the supply of coins and the higher the demand for it, price will automatically soar to new milestones novice and expert investors never predicted.

The below figures outline some of the Potential high and low of Binance Coin price prediction forecasts in 2021, 2022, 2023, and 2025 offered by industry experts. You can get an easy look at the minimum and maximum price forecast for BNB.

Year High Low
2021 $1072.00 $290.30
2022 $1223.50 $378.30
2023 $1585.00 $474.20
2024 $1821.00 $682.00
2025 $2495.00 $1275.00

 

Binance Coin is here to stay and serve as payment options for all manner of persons. You as an individual must make a decision as to whether this coin is a good investment or not because all forms of investments are risky. With what is happening in the crypto world, Binance Coin is a good investment because it has the market (trade volume) and is poised to become one of the big hitters in 2021. 

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