Is BNB Worth Investing In?

Last Updated January 16th 2023
4 Min Read

Even though the crypto markets are experiencing some severe turmoil and downside, investors are still accumulating tokens that have strong potential. Many consider Bitcoin and Ethereum to be strong contenders as a store of value, but they aren’t the only ones. 

One of the blue-chip tokens of the crypto ecosystem is BNB, the cryptocurrency issued by the Binance centralized exchange. This token has risen into the top 5 cryptocurrencies in the past few years and is showing some incredible strength and adoption among the community. 

This article will serve as a guide that helps you understand the fundamentals behind BNB. We will cover its key features and benefits and provide a price prediction to see whether you should convert Binance Coin to Bitcoin or the other way around. 

 

Key Features Of Binance Coin

The BNB token was launched through an ICO aimed at funding the operations of the Binance exchange. The success was immediate as it happened during the peak of the bull market in 2017. 

Initially, the BNB token was an ERC20 token that ran on the Ethereum network. It was only in 2019 that it migrated to its own chain. Over the years, BNB gained multiple use cases. 

At first, it was uniquely used as a token for paying the trading fees on the Binance centralized exchange. Traders that paid fees with BNB got significant rebates, which made the token very popular. 

However, this limited utility increased exponentially when Binance launched its own blockchain, where BNB was used as gas. Finally, in 2020, Binance launched its smart contract-capable blockchain, the BSC, where BNB literally exploded in use cases. 

 

Benefits Of Buying BNB

There are multiple advantages of holding BNB in your portfolio that span from its fundamentals. BNB is profusely used as a trading pair on Binance. 

Moreover, the BNB chain is one of the most frequented blockchains in the space. Many blue chip dApps continue to launch on this chain, despite the ongoing bear market. BNB serves as gas and powers these applications. 

Finally, because of its popularity, BNB has gained significant adoption with online merchants, allowing you to buy goods and services with it. 

 

BNB Burns

The BNB token is subject to two different burn mechanisms that aim to reduce the total supply by 50%. The first way to burn BNB is by destroying a portion of the tokens that get used as gas fees on the chain. 

The second mechanism includes quarterly burns. Previously, the Binance team bought back BNB tokens from circulation and destroyed them irrevocably. This mechanism is now replaced by an auto-burn feature. Currently, instead of manually burning tokens, the protocol calculates the amount to be burned in correlation with the BNB price and the number of blocks generated on the BNB chain. 

 

Use Cases

One of the strongest points of BNB is its versatility. Its multiple cases are: 

  • Paying for trading fees on the Binance exchange and getting rebates. 
  • Payment currency through the Binance Pay app. 
  • Gas token on the BNB chain powering thousands of dApps. 
  • Smart contract-capable token that can be plugged into DeFi, NFTs, and blockchain games. 

On BSC, BNB became the main gas token and could be seamlessly plugged into the different DeFi and NFT protocols that launched on the chain. Users could provide liquidity with it, lend or borrow it. This made its value skyrocket in the process. 

 

Coin Performance

While BNB hasn’t performed as well as it should considering its benefits, this is true for the entire crypto market. It reached an all-time high in May 2021, going as high as $690. The price has fallen quite a bit since then, currently trading at $235. 

Experts from around the internet like Digitalcoinprice.com still paint a bullish picture, however. The website provides a target of $1,067.55. Priceprediction.net is equally enthusiastic, with a forecast of $942.49 for 2025. 

 

Conclusion

Binance Coin is one of the few blue-chip cryptos that we can see remaining in the top 5 in the following years. The bear market might have opened good opportunities for investors to buy BNB at a low price. And you can do it completely anonymously too, by using https://godex.io/.

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