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Is Binance Coin A Good Investment And Should I Invest In BNB?

12 Min Read
Last Updated March 27th 2021

Investing In Binance Coin : Getting Started

Should I Invest in BNB? Is Binance Coin A Good Investment?

If you are new to the world of Binance Coin investing, you might be wondering if BNB is a good investment or shall I invest in Binance Coin?. Well, let’s break all Binance-related myths circulating online before you consider investing in Binance Coin.

What Is Binance Coin?

Binance Coin is not your average cryptocurrency. 

Binance Coin was created by the popular crypto exchange Binance. Binance Coin had a successful Initial Coin Offering (ICO) of 100 million tokens in 2017 and raised over $15 million (used for further promotion and development of the coin).

Note that, initially, Binance Coin was launched on the Ethereum blockchain but later moved to its own blockchain Binance Chain.

The main purpose of Binance Coin was to offer an alternative way to pay for trading fees on the Binance platform.

Now Binance Coin is one of the best utility tokens that can be employed beyond the Binance ecosystem, across blockchain and non-blockchain companies. 

Binance Coin can be used to pay for goods, property, travel, and online services (e.g., via TravelbyBit). It can be used to get virtual gifts (e.g., on Gifto), in-game rewards, and also to pay freelancers for their work (e.g., on CanWork).

Binance Coin is also recognised by major tech companies that allow users to use BNB through built-in wallets (e.g., Samsung).

Interestingly, it’s not only its properties that make Binance Coin highly appreciated; the popularity of Binance is a factor that we can’t ignore. After all, Binance is one of the leading crypto platforms globally, with deep pools of liquidity, so it’s no surprise that Binance has managed to push BNB adoption further.

How Does Binance Coin Work?

Binance Coin can be used on the Binance platform and is also one of the best utility tokens in 2021.

As stated above, Binance Coin has moved to its own blockchain Binance Chain, which - unlike Ethereum - doesn’t support smart contracts. Binance Chain uses the Tendermint byzantine-fault-tolerant (BFT) consensus mechanism, which involves three types of nodes: validator nodes; witness nodes; and accelerator nodes.

Binance also uses a unique burndown policy to ensure the steady growth of Binance Coin. Binance regularly buys back and destroys BNB tokens till it cuts its supply in half, leaving only 100 million in circulation. This policy is one of the biggest advantages of Binance Coin, designed to overcome the possible depreciation of value.

Another important aspect of Binance Coin is the discount the platform offers for BNB traders. Note that the discount reduces by half each year and ends from the fifth year onwards, which would be 2022.

 What Is BNB?

BNB is the ticker symbol of Binance Coin

We should note that BNB has a total supply of 200 million coins. Currently, there are 144,406,561 tokens in circulation. The good news is that the periodic BNB burn that happens once a quarter is not linked to performance indicators on Binance.

BNB can act as a currency and a medium of exchange, which makes it a rival of some of the biggest cryptos in 2021.

As stated above, BNB has more than 120 use cases and is often referred to as one of the top utility tokens in existence.

On top of that, BNB is one of the safest tokens as it’s almost impossible for its parent company - the giant Binance - to fade away. BNB’s value is closely tied to Binance. Just do not forget that holding BNB is not an investment in Binance; it doesn’t allow you to have a stake in Binance. 

Because of its price, ranging on average between $35.27-$40.49, BNB is an affordable investment even for beginners; with a few hundred dollars, you can get a decent amount of BNB tokens, giving your investment a more solid presence.

Is Binance Coin A Good Investment?

According to crypto experts, Binance Coin is a good investment. With a market cap of $41B , Binance Coin is currently ranking #3 on Coin Market Cap

Let’s not forget that a high trading volume means high liquidity, which is a vital factor for day traders and scalpers.

Furthermore, Binance Coin, being supported by a trustworthy exchange, is a token with an actual purpose: it is used to pay transaction fees and purchase tokens in Initial Exchange Offerings (IEOs). 

It also comes with different advantages and over 120 use cases, which adds an additional layer of credibility and some great opportunities for investors.

That said, investing in Binance Coin can be risky because no highly profitable asset is 100% safe. Cryptocurrencies, in particular, are highly volatile and unpredictable.

This doesn’t mean that investing in BNB is a bad idea, though. Cryptocurrency investors who decide to add BNB to their portfolios should simply consider the risk-reward ratio of BNB and develop an effective risk management strategy.

Would You Consider Investing in Binance coin BNB?

Should I Invest In Binance Coin?

Binance Coin is definitely worth considering in 2021. Yet, the truth is that the final decision comes down to you. 

What kind of crypto investor do you want to be? Are you interested in the discount rates Binance offers for those who use BNB on their platform? Do you believe that Binance’s burndown policy will provide a steady growth rate of BNB in the long-term? Are you interested in BNB’s trading potential? When you find answers to these questions, you’ll be able to decide if you should invest in Binance Coin.

With different advantages over other cryptocurrencies, Binance Coin can be a good investment for you. We should also acknowledge Binance’s success - with crypto legend Chanpeng Zhao in charge - and its role in the probability of profit on Binance Coin investing.

In the short-term, for instance, it seems that BNB is not going to lose its value as Binance is pushing for adoption and expanding globally.

At the same time, we should mention again that cryptocurrency investing can be risky and you may lose all your funds without the possibility of returning them. 

Before investing, consider the fact that Binance Coin is dependent on Binance, which is a centralised exchange that requires Know Your Customer and Anti-Money Laundering details and that is quite often a target of online attacks.

After you’ve weighed the pros and cons of investing in Binance Coin in order to make an informed decision regarding BNB, remember that cryptocurrency investing shouldn’t be complicated. Cryptocurrency investing can even generate high returns.

How Much Could Binance Coin Be Worth? 

If you decide to invest in Binance Coin, you may want to know how much it could be worth in the years to come. 

Though price predictions remain speculative and depend on crypto news, demand and supply, and market sentiment, past performance and data analysis can help investors and traders to create crypto forecasts. 

To begin with, Binance Coin’s performance is allied to that of Bitcoin and the cryptocurrency market as a whole. In the last two years, just like other cryptos, BNB recovered from a dreadful 2018 and rose to a peak in the mid of 2019. 

In 2019, BNB reached an all-time high of $40.

Interestingly, though the Binance exchange was hacked in May 2019, that didn’t affect BNB too much. Why? Simply because Binance’s reputation is way too impressive to be torn down by a single attack.

According to its price predictions, Binance Coin will manage to recover from the ongoing pandemic and reach a mean of $2500 in the next four years.

What Will Affect Binance Coin In 2021 And Beyond?

Though price predictions remain speculative, we should mention that Binance Coin’s value may be affected by numerous factors.

Macro factors, such as crypto prices, crypto news, demand and supply, and regulations are some of the elements that can affect BNB’s value. 

Besides, there are different bespoke factors, such as the success of Binance Launchpad IEOs, that play a crucial role in BNB’s success.

Binance’s performance, in particular, is one of the most influential factors that should be considered. 

The direction of Binance.US, launched in 2019, needs special consideration as US visitors are among the most active Binance users. Note that US visitors accounted for 8.4% of the Binance exchange traffic as of 2019. 

It’s not only the potential of Binance but its unique policies that affect investing. Discount rates are undoubtedly a factor that attracts traders and investors. Note that for the first year the discount was 50%. 

According to BNB’s whitepaper, however, there won’t be any discounts after the year 2022, which can lead to a decrease in interest.

Investing in BNB is affected by the burning of BNB tokens as well. This practice, as stated earlier, aims to increase scarcity by reducing the number of BNB by 50%.  

Let’s not forget that scarcity refers to the finite nature of the digital coins: the demand should exceed the supply to make a coin more valuable. 

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Key Points

  • Binance Coin is a coin that deserves a second look. Binance was created by the Binance exchange to help Binance users pay for transaction fees on the platform.
  • Binance was initially launched on the Ethereum blockchain but moved to its own blockchain, Binance Chain. Note that Binance Chain doesn’t support smart contracts.
  • Binance Coin is one of the top utility tokens in 2021 and many experts believe its value will increase in the years to come. Interestingly, there are many macro and specific factors that may affect BNB, including Binance’s performance.
  • Binance’s unique burndown policy and the discount rates they offer are also vital to help experts make price forecasts. Some expect that BNB will reach $250 per coin by 2025.
  • Though BNB can be a profitable investment, crypto investing remains a risky venture and one should analyse the reward-risk ratio of the asset they are interested in.

If you enjoyed reading our article Is Binance Coin A Good Investment And Should I Invest In Binance Coin please share it with anyone who might be interested in cryptocurrency trading and blockchain technologies.

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