Bitcoin
Here’s Why Binance Coin (BNB) Could Be A Top Three Coin Within Three Years
An exchange issuing its own cryptocurrency seems a little bit strange at first glance. Binance has done just that, however, and over the last month or so the coin has caught fire. At the time of writing (early morning ET), Binance Coin (BNB) goes for $8.33, having traded as low as $0.70 a piece back at the start of the final quarter of this year.
From the start of the quarter lows to highs recorded last week just shy of $11 a piece, this one gained closed to 1500%.
BNB Daily Chart
Sometimes, the logic behind a long-term thesis on these sorts of young, relatively low market cap cryptocurrencies can be a bit murky. They are reliant on companies developing technologies that are experimental at best and, beyond that, the technologies finding (and successfully growing into) its target marketplace.
None of this is true of Binance Coin.
This is one of the clearest and simplest long-term strength arguments we’ve seen in the sector to date and – as such – we don’t expect this one to hang around at current levels, even given the gains outlined above, for long.
How can we be so confident?
Well, Binance (as many reading will already be aware) is one of the most popular cryptocurrency exchanges in the world. As of today, it’s got more than 3 million registered users and it’s built a reputation for being one of the most secure, reputable and user-centric exchanges on the market. To put this another way, if there’s an exchange out there right now that we would expect to be one of the, if not the, fastest growing exchange over the next five years, it’s Binance.
And where does Binace Coin come in to all this?
The coin was issued earlier this year for one (primary) purpose – to allow Binance users to pay fees in a native cryptocurrency, as opposed to using something like BTC or fiat. And why would users want to pay in BNB as opposed to BTC? Because Binance offers a discount (and a steep one, at that) for any user that covers their trading and platform fees with its native coin.
Specifically, when a user pays fees in BNB, they receive a 50% discount on fees for the first year of fee payment. This then reduces to a 25%, a 125.5% and a 6.75% discount for the second, third and fourth years respectively.
And here are the economics of our prediction:
- Assumption one: as Binance increases in popularity, more and more users are going to want to pay fees in BNB so as to reduce the costs associated with their trading.
- Assumption two: in order to pay fees in BNB, users have to buy BNB.
- Assumption three: an increased demand for BNB that arises on the back of Assumption one and Assumption two, as outlined above, will push up the price of the token.
It’s really that simple.
Combine this with the fact that the company is buying back tokens and burning them every quarter and we get a reducing supply input to turbocharge the above-discussed set of assumptions.
The company also has plans to build a decentralized version of its current platform, as part of which BNB will be used as one of the key base assets as well as gas to be spent.
So, really, the only way that this coin isn’t going to increase in value is if Binance goes under. This is cryptocurrency, so that’s not a risk we can take lightly, but as far as risk reward profiles go in this sector right now, that which Binance Coin (BNB) offers is one of the most solid we’ve seen.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Image courtesy of Binance
Bitcoin price dumped hard on Monday, briefly slipping below $41,000, erasing gains recorded in the previous week. The premier cryptocurrency seems to have exhausted its recent rally propelled by industry vulnerabilities. At the time of writing, the world’s largest cryptocurrency was trading slightly lower at $41,385. Bitcoin’s total market cap has dipped by 2% over the past day, while the total volume of BTC tokens traded over the same period climbed by 58%.
Fundamentals
Bitcoin price has been facing retracements and a rollercoaster over the past few days after recently rocketing to a 20-month peak. On-chain data has suggested that many investors used the opportunity to take some profits, leading to a decline in the asset’s price.
Bitcoin’s price slump is mirrored in the wider crypto market, with the global crypto market cap decreasing by 1.85% over the past 24 hours to $1.55 trillion. The total crypto market volume has increased by 32% over the same period. The Crypto Fear and Greed Index has plunged from a level of extreme greed to a greed level of 70, suggesting a decline in risk appetite.
Ethereum, the largest altcoin by market capitalization, is currently trading at $2,167, down almost 3% for the day. Meme coins have been hit hard by the market slump, with Dogecoin and Shiba Inu down by more than 4% over the last day.
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Economic Outlook
Bitcoin price has been trading sideways over the past few days, suggesting a pause in its recent rally towards $45,000. The premier cryptocurrency has decreased by 4% in the past week but remains 15.22% higher in the month to date. The digital asset has staged a significant recovery this year after a torrid 2022 in which a string of scandals, including the collapse of FTX, led to a market meltdown, undermining the credibility of the sector.
The crypto market has been buoyed by the Fed’s latest interest rate decision. The US Federal Reserve on Wednesday held its key interest rate unchanged for the third consecutive time, in line with market expectations. With the easing of the inflation rate, members of the Federal Open Market Committee (FOMC) voted to keep the benchmark overnight borrowing rate in a targeted range between 5.25%-5.5%.
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Fundamentals
Bitcoin price has posted significant gains over the past few days, climbing to its highest level since April 2022, before the crash of a stablecoin that started a litany of company failures, pummeling crypto prices. The world’s largest cryptocurrency briefly topped the crucial level of $44,000 on Wednesday amid rising momentum despite being massively overbought.
According to analysts, with no spot bitcoin ETF approvals yet and the halving event five to six months away, the market is riding on FOMO. Capital has been flowing in the Bitcoin market amid enthusiasm that the launches of spot ETF will bring in billions of dollars of new investment into the crypto sector.
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