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Is Binance Coin (BNB) a Good Investment? • Benzinga – Benzinga


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Binance coin (BNB) may be an excellent choice if you want to invest in a major cryptocurrency other than Bitcoin or Ethereum. On CoinMarketCap, Binance coin is now ranked #3 in terms of market capitalization, with a market cap of around $100 billion. The Binance coin ticker symbol is BNB, and the acronym BSC is used in reference to Binance Smart Chain.

BNB is the utility token of both the Binance exchange and the Binance.US exchange. It’s also used as a utility token for Binance Smart Chain (BSC). Traders use BNB to pay for trading fees, and by using BNB, they receive a 25% discount.

What Is Binance Coin (BNB)?

BNB was founded over 4 years ago through an initial coin offering (ICO) from June 26 to July 3, 2017. The exchange Binance.com debuted 11 days later. BNB was used to pay transaction fees on the new exchange. BNB was initially launched as an ERC-20 token on the Ethereum blockchain. Eventually, Binance created a public blockchain, and on April 23, 2019, BNB was migrated to the Binance blockchain.

  © Image credit: Binance

Over the years, BNB’s use case has expanded. It is now used to pay transaction fees on Binance and send tokens via BSC (Binance Smart Chain). BNB can also be used to generate passive income on BSC and as collateral for a crypto loan. You can also use BNB as a payment source for the Binance Visa debit card. Other use cases include paying for travel, shopping, gaming and buying real estate. 

Binance released BNB with a total supply of 200 million tokens, but the company has initiated a burn program since the ICO. So far, the program has consumed 33,198,852 BNB, bringing the entire supply down to 166,801,148. Binance has committed to burning 50% of the initial total supply, or 100 million BNB before the program ends, which should be beneficial to the price of BNB.

Binance Coin (BNB) Price History

BNB has had an incredible run in the years since its ICO. The initial price per BNB token during the ICO was $0.15. An all-time high price of $691.80 so far was reached on May 10, 2021. That price increase equates to an increase of over 46,000%. 

However, looking at the price chart below, you can see that most of the price appreciation has occurred during 2 periods, the 2017 and 2021 bull markets. During the 2017 bull market, the price of BNB increased from around $1.50 to $25.20 for a gain of over 1600%. During the 2021 bull market, the price increased from approximately $35.00 to $691.80 for a gain of over 1,850%.

BNB experienced little price appreciation from early January 2018 through mid-2020 because of the cryptocurrency bear market. Following the peak on May 10, 2020, the price of BNB dropped by 69% over the next 2 weeks, hitting a low of $211.70 on May 23. Over the next 7 months, the price has slowly climbed back up near the all-time high, coming to within $23 of it on November 7. 

Currently, BNB is rated #3 by market capitalization on CoinMarketCap, with a market cap of about $100 billion. On Nov. 29, 2021, the price of BNB is $584.10, with a total supply of 166,801,148 tokens. 

Binance Coin (BNB) Competition

What other cryptocurrencies compete against BNB for investors’ money? Other than the large-cap cryptos like Bitcoin and Ethereum, it would most likely be competitors of the Binance exchange. Competitors to BSC are also listed below.

BNB Token competitors:

  • Crypto.com (CRO)
  • FTX Token (FTT)
  • Kucoin (KCS)
  • Huobi Token (HT)
  • OKB Token (OKB)
  • Solana Token (SOL) — BSC competitor
  • Avalanche Token (AVAX) — BSC competitor

As you can see by the table above, Binance has a considerable advantage over the other exchanges when it comes to 24-hour volume and weekly visits. If you believe that the Binance ecosystem will continue to expand, increasing the use case for BNB, then that would be bullish for the price of BNB.

The inflationary aspects of each competitor appear below. 

  • OKB Token: Total Supply = 300 million, circulating supply = 60,000,000 (Only 20% of the total supply is in circulation)
  • HT Token:    Total Supply = 500 million, circulating supply = 159,308,566 (32% of the total supply is in circulation)
  • FTT Token:   Total Supply = 335,608,561, circulating supply = 139,739,225 (40% of the total supply is in circulation)
  • KCS Token:  Total Supply = 177,118,638, circulating supply = 80,118,638 (47% of the total supply is in circulation)
  • CRO Token:  Total Supply = 30,263,013,692, circulating supply = 25.26 billion (83% of the total supply is in circulation)
  • SOL Token:   Total Supply = 509,801,423, circulating supply = 303,912,528 (60% of the total supply is in circulation)
  • AVAX Token:  Total Supply = 394,683,526, circulating supply = 223,841,684 (31% of the total supply is in circulation)

Looking at the total supply and circulation data above, 5 out of the 7 have less than 50% of their total supply in circulation.There is still a sizable amount of the total supply that could be introduced over time, causing dilution and downward pressure on the token price. 

Now compare this to BNB, where 100% of the total supply is in circulation, and more BNB tokens are burned every quarter. 

How To Buy Binance Coin (BNB)

If you are interested in buying BNB tokens, the most obvious place to buy BNB would be Binance. You can also buy BNB from FTX and Gate.io. Binance will have the most liquidity, but you will have to use Binance.US to purchase BNB tokens if you live in the United States.

Buying is straightforward: open an account at whatever exchange you choose, link your bank account, transfer fiat into your account, buy BNB, choose a wallet to store your BNB and transfer your BNB into your wallet. The last 2 steps are optional, but it will help secure your digital assets from online hackers.

1 Minute Review

Binance is the largest cryptocurrency exchange in the world by trading volume. In fact, it tops the ranks of cryptocurrency exchanges maintained by CoinMarketCap, which are ranked based on 24-hour trading volumes, exchange score and average liquidity. Binance triumphs over exchanges like Huobi Global and Coinbase, which follow closely in 2nd and 3rd places, respectively. 

Previously based in Malta, the Binance Group is now based in the Cayman Islands. Binance has several locations and entities registered across the globe. In the United States, it’s known as Binance.US. The exchange in the U.S. uses the same cutting-edge technology and trading services as its global counterparts with the difference being U.S. regulatory compliance. It is operated by San Francisco-based BAM Trading Services.

Binance.US ranks 9th on CoinMarketCap’s list of the top 10 exchanges based on metrics like 24-hour trading volume, exchange score and average liquidity. Binance could be a good platform for you to invest in cryptocurrencies if you are a U.S.-based trader who trades frequently, doesn’t intend to pay high trading fees and needs access to a large number of cryptocurrencies. 

Best For

  • US Citizens
  • Frequent day traders
  • Users interested in Binance Smart Chain (BSC) and Binance Coin (BNB)
Pros

  • Low trading fees
  • Easy-to-use platform
  • Wide selection of altcoins — it offers 51 cryptocurrencies apart from Bitcoin (BTC)
  • Good customer service
  • High liquidity because of large trading volumes
Cons

  • Only residents of 43 states in the U.S. can trade on Binance.US. You cannot trade on this platform in New York, Connecticut, Hawaii, Texas, Vermont, Idaho and Louisiana
  • Despite the wide selection of altcoins, the number of tokens offered on the U.S. platform is not comparable to the hundreds of choices available on the Binance global platform
  • There is no option for telephonic customer support

Best Hardware Wallet For Binance Coin (BNB)

Let’s face it. The crypto space is still a massive target for hackers and scammers. That being the case, you need to take every precaution possible to protect your crypto assets. The most obvious and first step is not to leave meaningful amounts of crypto on exchanges. It’s no secret that crypto exchanges represent irresistible targets to hackers. Most of the exchanges do everything they can to ensure the safety of their customer’s crypto, but why take the chance? 

Investors and traders who stored their crypto on the Cryptopia exchange undoubtedly wish they hadn’t after a hack caused the exchange to close. The hack in January 2019 led to the liquidation of Cryptopia in May 2019. Over 2 years later, many customers still have no idea if they will ever recover their crypto assets. Besides the possibility of losing crypto to a hack, when you store your crypto on an exchange, you don’t even have control of the private keys. If you don’t control the private keys, is it really your crypto?

Best Hardware Wallet: Ledger (Nano S or Nano X)

Hands down, the safest place to store your crypto is in a hardware wallet, also known as a cold storage wallet. A big reason why hardware wallets are so secure is that they are only connected to the internet while you are using them. The fact that hardware wallets aren’t connected to the internet makes it difficult, if not impossible, to hack.