Is Binance Coin A Good Investment? You Should Know

Preface

Among cryptocurrencies, Binance has slowly become popular over time, and many investors have turned their attention to Binance. So is Binance coin a good investment? In this article, we will analyze whether Binance is worth investing in from different perspectives.

What is Binance Coin

Before understanding Binance is worth investing, let us first understand what Binance is.

Binance exchange created the Binance coin cryptocurrency and it is traded under the symbol BNB. The Binance coin was launched in July 2017 as part of an initial coin offering (ICO) with a cap of 200 million BNB tokens. Binance provided 10%, or 20 million BNB tokens, to angel investors, 40%, or 80 million, to the founding team, and the remaining 50%, or 100 million, to the various participants through the initial coin offering process.

Almost half of the funds raised during the initial coin offering were intended for Binance branding and marketing, with the remaining one-third going toward building the Binance platform and making essential updates to the Binance ecosystem. It is important to note that Binance currency was originally based on the Ethereum blockchain and followed the ERC 20 standard. In addition, the Binance coin has subsequently become the Binance chain’s native token.

As a result, Binance exchange was the world’s largest cryptocurrency exchange as of June 2021, with over 1.4 million transactions per second.

Is Binance Coin A Good Investment

Binance coin’s price history

2017

On July 25th, Binance coin’s opening price was $0.12 which is a really meagre figure. In contrast, Binance coin closed the year 2017 trading at a very high price of $8.64.

2018

 Binance coin opened the year 2018 trading at $8.63. Later, on January 6, 2018, Binance coin did even better and surpassed the $20 hurdle to trade at $23.51.

Nonetheless, just like every other cryptocurrency, Binance coin is highly volatile. For example, the minimum price of Binance coin in 2018 was $4.19. However, Ethereum finally closed the year 2018 trading at $6.16, which was not a bad price.

2019

During the first quarter of the year, the Binance coin price dived a little bit to trade at $15.05 on March 14th, 2020.

However, on 22nd June, the Binance coin improved significantly and recorded the highest price that year to trade at $39.57.

After that, the price range remained relatively stable. For example, on 7th September the price of a Binance coin was $22.57. 

Again on 11th November, the Binance coin was trading at $20.13. Certainly, this was still a good price.

As the year was coming to a close, the price took a severe beating. It was at its lowest on 17th December at a dismal price of $12.18.

2020

The year started off well. Binance coin trading prices made a slight improvement to trade at $25.44 as of 13th February, 2020.

However, on 10th May the price of the Binance coin dropped sharply and registered a dismal figure of $14.72. Please note that this was the lowest price that was registered the whole of that year.

It is important to note that like every other cryptocurrency, Binance exhibits sharp rises and sharp drops. For example, on 14th September the price shot up to trade at $33.49.

The price improved again and on 12th November 2020, the Binance coin was trading at a promising price of $27.61.

It is an undisputed fact that 2020 was a particularly unique year due to the Covid-19 pandemic. However, the price continued improving till the coin closed the year at a very good high price as indicated above.

1st January-11th September 2021

The year did not start very well for the Binance coin. Despite the coin having an opening price of $37.37 on 1st January, it recorded the lowest price at $37.05 on this same day. 

However, the price improved even though at a slow rate to trade at $115.13 on 9th February.

Later on, the Binance coin price shot up to $311.43 on 30th March. This very dramatic increase is just how we would expect the prices of cryptocurrencies to behave. Nonetheless, this was a significant improvement from the prices recorded during February.

Again, on 7th July the Binance coin surpassed all the expectations to trade at a high price of $339.17.

However, on 8th August the Binance coin experienced another dramatic swing. This time the price dropped sharply to trade at $342.06. Even so, the price was still significantly good.

YearMaximum PriceMinimum Price
2017$11.30$0.10
2018$24.91$4.19
2019$39.57$5.49
2020$39.48$8.68
Jan-Oct 27th 2021$690.93$36.95
Is Binance Coin A Good Investment

Is Binance Coin A Good Investment 1: Comparison between Binance and other cryptocurrencies

Is Binance Coin A Good Investment vs Is Bitcoin A Good Investment

The new Binance Smart Chain purports a block creation time of as little as 3 seconds, which, let’s face it, blows Bitcoins ten-minute block time out of the water. Of course, the faster time is achieved through innovation within the two-chain system and the use of the faster proof-of-stake consensus mechanism. Additionally, Binance coin also offers much lower trading fees than the Bitcoin blockchain, so all in all, there really is no comparison of Bitcoin vs Binance Coin when it comes to transactions. 

It is important to know that the total supply of Bitcoins is limited to 21 million coins. Further to this limitation on overall supply, the reward metered out to successful Bitcoin miners is reduced by half at regular intervals. A process known, unsurprisingly, as halving. Of course, this effectively increases the scarcity of free Bitcoin tokens in the network, which in theory will boost the value of Bitcoin in the years ahead. 

As far as supply, Binance Coin also has an in-built deflationary mechanism, though it differs a great deal from that of Bitcoin. Specifically, once a quarter, Binance uses 20% of its profits to buy back BNB and ‘burn’ it, which basically means permanently deleting it from the network. 

In fact, this process is set to continue until 100 million Binance coins have been bought back and burned – accounting for 50% of the total 200 million supply. Of course, the practice increases the scarcity of BNB and also, in theory, its value.

Binance coinBitcoin
3 seconds block time.10 minutes block time.
Has a maximum cap of 200 million coins.Has a maximum cap of 21 million coins.
Relies on proof-of-stake protocol.Relies on proof-of-work protocol.

Is Binance Coin A Good Investment vs Is Ethereum Coin A Good Investment

It is true that the utility of Ethereum is unrivalled for the most part. This is because outside of direct payments, the Ethereum ecosystem offers a range of utilities.

While BNB is divided, offering two main utilities. Specifically, it provides a centralized finance (CeFi) system, which is its central platform, the Binance cryptocurrency exchange. As well as that, BNB has decentralized finance (DeFi) utility, offering the native token of Binance Smart Chain.

Binance coinEthereum
Two main utilities.A range of utilities.
Handles 12 million transactions per day.Can only handle up to 1.75 million transactions per day.
Average block time of 3s.Has an average block time of 13s.

Is Binance Coin A Good Investment vs Is Cardano A Good Investment

First and foremost, the main difference between Cardano and Binance is that the native token of Cardano is ADA while the native token of Binance is BNB and BSC. Also, Binance goes through the Proof of Stake protocol while Cardano follows POSA protocol that is the Proof of Stake Alliance mechanism.

Additionally, Cardano is faster to process transactions than Binance. In fact, on average, Cardano takes about 5 to 7 minutes to complete a transaction, while Binance takes about 30 to 60 minutes approximately to complete an exchange or withdrawal transaction.

Moreover, the transaction fees on Binance are only 0.1% – 5%, depending on the type of transaction. Of course, this is pretty cheap compared to its competitors.  On the other hand, Cardano’s transaction fees are higher than those of Binance.

Binance coinCardano
Has 1 second block time.A total of 20 seconds block time.
Supply of BNB is capped at 200 million coins.The maximum supply is 45 billion coins.
Can be mined.Does not support mining.

Is Binance Coin A Good Investment vs Is Litecoin A Good Investment

Both Litecoin and Binance Coin are known for their quick transaction speeds specifically 2.5 minutes for Litecoin vs 1 second for BNB. While BNB is much faster than Litecoin, both are very quick compared to the transaction speed of Bitcoin, for example, at 10 minutes.

Additionally, just like Litecoin, Binance Coin both has a limited number of coins. In fact, there are 84 million LTC available, while Binance has capped the BNB supply at 200 million.

It is true that Litecoin users can expect to pay around $0.03 or $.04 on average in transaction fees. On the contrary, since Binance Coin was created for internal exchange purposes, there is no fee directly associated with the network. However, if you make any other trade on the Binance exchange, you will pay 0.1% but you will also get a 50% discount if you pay for trades with BNB (0.05%).

Binance coinLitecoin
Supply of BNB is capped at 200 million coins.Has 84 million coins available.
Has 1 second block time.The block time is 2.5 seconds.  
Supports only one type of mining.Can be mined in three different ways.

Is Binance Coin A Good Investment vs Is XRP(Ripple) A Good Investment

Indeed, XRP (Ripple) is a financial settlement and repatriation technology built for banks and financial networks. While Binance coin on the other hand is a cryptocurrency that was created to be used to pay for goods and services.

Interestingly, XRP has a max supply of 100 billion coins whereas Binance coin has a maximum supply of 200 million coins.

Binance coinXRP (Ripple)
Maximum supply of coins is 200 millionHas a max supply of 100 billion coins.
Can process up to 100 transactions per second.Processing speed of 1000 transactions per second.
Has 1 second block time.The block time is 3-5 seconds.

Is Binance Coin A Good Investment 2: What do other people think of Binance coin

It is true that over the past four years, Binance has grown to superstardom. In fact, Binance offers a vast variety of cryptocurrencies and trading features to its clients, so it is a bit like the Amazon of crypto exchanges. It is important to note that Binance focuses mainly on traders who are looking to buy in and out of cryptocurrency over a shorter time period than long time period investors. Additionally, the platform has features that entice trading, including high-risk leverage and complicated investment products such as futures and options.

Because of this, Binance has become a ‘go-to’ exchange for many crypto enthusiasts and traders, with 2020 crypto exchange volume of around $2 trillion. Believe it or not, this trading volume is continuing to grow. In fact, in 2021, the total trading volumes have bounced between $60 to $90 billion a day. Of course, this means Binance could be on track to north of $20 trillion in trading volume this year.

FAQ

How to buy Binance coin

If you want to buy Binance coin first you will need to open an account with Binance.

It is important to note that before you begin trading, you must first transfer money into your exchange or brokerage account. Of course, this transfer could be from a checking account, a savings account, a wire transfer, or even a PayPal transfer.

Once you have successfully deposited enough money, you can then buy Binance coins after searching the term Binance coin or its ticker symbol BNB on the exchange trading or transfer platform. Typically, you can either choose the number of dollars you will put in or the number of BNBs that you want. The purchase will go through immediately.

Should I buy Binance coin

Yes. We assure you there are certainly really good reasons why Binance coin could do very well. First and foremost, it is the native cryptocurrency for Binance, the biggest crypto exchange in the world by trading volume. Additionally, it is used to pay transaction fees on the Binance Smart Chain, a programmable blockchain that is rapidly growing in popularity.

What is the future trend of Binance coin

According to Longforecast prediction, the price of Binance coin will experience some highs and lows in the coming years. In that light, we have summarised their predictions by picking out the highest and lowest prices of the Binance coin for the next five years and highlighted them in the table below.  For more details, please read this article.

YearMaximum PriceMinimum Price
27th Oct- 31st Dec 2021$605$377
2022$1042$345
2023$1464$909
2024$1834$643
2025$1563$1359

Summary

It is true that the Binance coin is expected to boost the operation of the Binance exchange and its ecosystem. Especially, since it supports multiple utilities such as trading fees, exchanges fees, listing fees, and any other fees on the Binance exchange. Additionally, the Binance coins have garnered support from various partnerships that have helped in its usage spread.

However, for all its utility Binance coin is not a security. Of course, this is not a bad thing. In fact, Binance coin can be broadly applicable to the blockchain industry. Additionally, the price of Binance coin is rising daily. Moreover, apart from the high price, the following are some of the other factors you should consider before investing in Binance coin.

Firstly, the Binance coins can be used to invest in certain initial coin offerings that are listed through Binance’s launch-pad program. Secondly, the new cryptocurrencies will be listed on the Binance exchange, and the use of Binance coins will give a seamless marketplace for dealing in a variety of virtual tokens. Thirdly, Binance coin will ultimately become the primary currency of the decentralized Binance exchange. Finally, the Binance coin is also supported by the VISA debit card of Monaco, the pioneering payments and cryptocurrency platform and, the mobile app.

All in all, there are a lot of reasons why you should consider investing in Binance coin. We cannot exhaustively analyze all of them.

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Conclusion

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