Is it Worth Investing in Binance Coin Now?

Binance Coin is a top investment choice right now

Last Updated July 23rd 2021
5 Min Read
    • Binance Coin is the utility token of the Binance Exchange and fuels the Binance Smart Chain’s DeFi ecosystem.
    • BNB could be worth between $2,542 and $3,628 by the end of 2021 according to various price forecasters.

Binance Coin (BNB) is indeed worth buying right now with the third-largest market cap.

At the time of writing, Binance Coin has a market cap of $105,369,070,522, and a price of $685.49. This is not too shy of its recent all-time high of $690.93.

Binance Coin is most certainly the success story of 2021. Starting the year at $37.62, it has become one of the most in-demand cryptocurrencies right now.

But let’s look more closely at what Binance Coin is and why it could be your best investment of 2021.

What is Binance Coin?

Binance Coin is used to get a discount on fees on the Binance Exchange and fuels the Binance Smart Chain.

The Binance Exchange is the largest crypto exchange in the world. With a 24-hour trading volume of $58,816,657,165, it dwarfs Coinbase’s $7,111,103,474, the second-largest exchange.

Binance Coin was created in 2017 to encourage more crypto traders to use the exchange. It is essentially a discount token. If you pay with it, you get a discount on your trading fees.

But that’s not all. In September 2020, Binance launched the Binance Smart Chain (BSC). A parallel chain that can host DeFi (decentralised finance) projects.

Check Out: Is Binance Coin A Good Investment?

Should you buy Binance Coin in 2021?

Yes, Binance Coin has broken several all-time highs in 2021 already and looks like it will continue to grow.

The BSC became a major hit in February 2021 when many projects left Ethereum because of high transaction costs.

According to YCharts, average Ether fees peaked on the 23rd of February 2021 at $39.49! Since then, it has remained very volatile with sharp swings upwards. This is mostly because the Ethereum network has become very crowded over the last few years.

Binance Coin, on the other hand, has remained much cheaper making it easier for DeFi projects to operate.

Read also: Bitcoin vs Binance Coin: Which Crypto Should You Buy

Why you should buy Binance Coin

You should buy Binance Coin in 2021 because its DeFi ecosystem is expected to grow tremendously this year. This is big news because it will increase the demand for BNB.

The Binance Smart Chain is the second most used to host DeFi projects. According to DeFiprime.com, there are 31 DeFi projects on the BSC, five more than Bitcoin’s 26.

On top of that, remember that cryptocurrencies are currently going through a bull market. As more traders rush to buy cryptocurrencies on the Binance Exchange, they will want to use BNB for fees.

Increased buying at the Binance Exchange could increase demand for BNB and increase the token’s price.

Are Binance Coins risky?

Binance Coin could be a risk when Ethereum finishes its transition to proof of stake, which should happen in 2021.

This is risky because this will significantly lower transaction fees on the Ethereum network may encourage numerous projects to return.

But there is also a second issue. The Binance Exchange is a centralised exchange and by working with DeFi projects, it may be aiding in its demise.

This is because DeFi has brought with it DEXs (Decentralised Exchanges), which cut out the middleman. DEXs could potentially make the Binance Exchange redundant in the future.

Even Changpeng Zhao (‘CZ’), CEO of Binance, has acknowledged this possibility.

Furthermore, traders should know that BNB is a centralised cryptocurrency that is completely controlled by Binance. For some crypto enthusiasts, this is a major turn off.

And finally, you need to consider the legal issues Binance has gone through over the years. Regulation has led the company to relocate several times.

Originally founded in China, Binance moved to Japan to evade China’s ban on crypto trading. Not long after, Japan also introduced strict laws and again Binance had to move, this time to Malta.

However, in February 2020, the Malta Financial Services Authority announced that “Binance is not authorised by the MFSA to operate”.

And so, we could again see Binance relocating. This could be a problem if they are unable to find a country friendly to their exchange.

Read Also: Is Binance Coin Expected To Reach $1,000 Or More In The Next 5 Years?

What will Binance Coin be worth in 2021?

Binance Coin could be worth as much as $3,628 by the end of 2021, an increase of +437%, according to Coin Price Forecast.

The Economy Forecast Agency is similarly bullish on BNB, though they give a lower estimation of between $2,151-$2,542.

Meanwhile, DigitalCoin forecasts BNB could reach $1,059.15 in 2021. WalletInvestor seems to agree with this prediction, giving a one-year forecast of $934.134.

Trading Beasts provides the most conservative prediction, believing the highest price BNB can reach in 2021 is $717.569. Even the lowest prediction looks promising!

Conclusion: Is Binance Coin worth buying?

Yes, Binance Coin is likely worth buying, especially in 2021. It benefits from increased trading at the Binance Exchange and a growing DeFi presence.

In 2021 alone, BNB has broken several all-time highs. And many price predictions are positive, with some even suggesting it can break through $3k this year.

Of course, while there are risks you need to be aware of, the positives are strong. 

Binance Coin is worth buying if Ethereum transaction fees stay high and traders keep buying from the Binance Exchange. For the near future, it looks like that is the case.

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Key points

    • Binance Coin is trading near its all-time high of $690.93.
    • BNB is a utility token used on the Binance Exchange to pay for fees and fuels the BSC DeFi ecosystem.
    • Binance Coin is primarily up in value because of high transaction fees on the Ethereum network. High fees have led many projects to swap to the Binance Smart Chain.
    • High trading activity at the Binance Exchange can also boost demand for BNB.
    • There are plenty of risks associated with Binance Coin. You should be aware of them before investing.
    • BNB could reach a high of $3,628 by the end of 2021, or a low of $717.569.
    • If Ethereum transaction fees stay high, and the Binance Exchange remains busy, BNB will likely continue to rise.
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