While most outsiders believe that trading/invest in cryptocurrency is nothing more than just buying and selling Bitcoins. In this article, we’ll discuss how to start investing in Binance coin?
However, when you jump into the crypto world and start trading yourself, you realize there are more than six hundred digital currencies in the crypto market to try your luck in.
So, why invest in Bitcoin only when many good options are having less competition in the market?
Moreover, whenever newbies seek advice from pro crypto traders, one of the most given recommendations will be to “invest in any other currency but Bitcoin”.
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For this matter, one of the most desirable crypto tokens other than Bitcoin is the Binance coin (BNB).
Just in 4 years since its birth, the Binance coin has found its place in the crypto market.
Initially, the offer and trade of BNB were restricted to its parent company but over time, several exchanges have started trading it, including eToro.
Although the price isn’t as high as Ethereum or Bitcoin, yet BNB has its share of devotees and investors. Why? One of the main reasons is because BNB has established itself as the third-largest cryptocurrency in the world.
After Bitcoin and Ethereum, BNB is the only cryptocurrency to achieve the $100 billion market cap.
And currently, Binance coin alone accounts for about 4.5% of the total digital currency market cap.
In January 2021, BNB was trading at $37 but now in just 5 months, it has risen by more than 1750%.
These and some other reasons have made Binance coin the top third digital currency in the crypto market.
Another good reason to trust BNB is the Binance company behind it, which is considered one of the largest crypto exchanges and the main drivers of novel advancements.
In addition, the BNB blockchain is something more than a ledger. The parent company just always strives to find new and novel uses for blockchain technology just as Ethereum does.
However, none of these reasons are enough to invest in Binance. We have to look a little further. So, let’s dive in!
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Potential Reasons to Invest in Binance Coin
BNB Has Real-Life Uses
Binance token has an actual real-life use when it is used and traded to drive transactions on the BNB exchange.
Apart from paying the transaction fees, Binance coin also allows its user’s participation in CEOs by letting them buy coins using Binance.
Also, many CEOs are there who accept purchases with the crypto tokens exclusively, giving these tokens another usage for crypto investors.
Another lesser-known usage of BNB is in Binance DEX as a native coin. Binance DEX is the decentralized arm of the Binance exchange and is different from the main exchange.
While Binance exchange only acts as an intermediary that keeps assets of its users, the Binance DEX, also allows its participants to trade directly with one another and also gives them full control over their own money.
BNB Is Relatively Inexpensive
Due to the somewhat ridiculous prices of Bitcoin, purchasing it has become difficult for newcomers.
While one can naturally purchase a small amount of Bitcoin, many investors don’t like to own very small quantities of Bitcoin.
Here, Binance comes into play since you can get a decent amount of coins without having to invest a huge amount of money.
So with BNB, your investment will get a more tangible presence while spending a small amount of just a few hundred dollars.
Moreover, just having tokens for the sake of having them is foolish. On the other hand, having higher numbers will help as it becomes easier to estimate how much money you have saved.
For example, which is easy to estimate, having 10 coins or having ten-thousandths of a coin? Of course, the 10 coins.
So, this way you will more rapidly understand whether or not your investment is worth it and also make better decisions based on that.
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BNB Has Declining Supply
That is uncommon in cryptocurrencies but the supply of BNB coins is dwindling, becoming smaller and smaller every year.
The token is designed to utilize 20% of income from the transaction to buy back coins and then remove them from existence by sending them to the unusable address.
This way, due to continuous dwindling in supply, an environment is created where BNB coins are expected to gain value instead of devaluing over time. Of course, there is a cap to this too.
Particularly, when half of the total Binance token gets burned, the burning will stop. However, not until this cap is reached, Binance coin is expected to appreciate with each following burn.
BNB Is Taking On Crypto
Binance was born in 2017 and has grown from nothing to a giant in just 4 years span and became one of the largest players in the crypto world.
The crypto market is yet far from large and settled players, but we can expect its full launch in a couple of years.
So, it is always better to invest in tokens that are not likely to fail when the market shifts happen.
For that reason, BNB is the best and safest choice as it is unlikely to lose all its worth even when the new players in the market come with revolutionary proposals.
Moreover, since the value of BNB is naturally tied to that of its parent company, and because the parent company of BNB is almost impossible to become irrelevant, BNB is considered as one of the safest tokens to invest in.
4 Things to Remember Before Start Investing in Binance Coin
Keep in mind, not everything will be beautiful and great when you invest in BNB. However, it doesn’t mean there are dark sides to it but still, there are some reasons to hedge your bet before investing.
Frankly speaking, you have to protect yourself while considering any cryptocurrencies out there, but since we are discussing Binance the coin here, we will be exclusive about what you should be aware of before investing in BNB.
BNB is Good As Long As It Stays Relevant
Binance coin is relatively safe but as long as the token manages to perform well. This means, if you are going to invest in BNB, you not only have to watch out for the coin itself but also the exchange and its side projects.
Right now, there are no odds for which the company can go down but you can never be 100% sure about it.
Moreover, with Binance exchange bringing out new projects every day such as the already existing BTCB (Binance Bitcoin-pegged token) and planned stablecoins, the chances of both the token and the exchange getting stronger are enhanced.
BNB is Centralized
While Binance DEX is a decentralized arm, the main Binance exchange is centralized, which means it is open for hacks and attacks in ways that are impossible with the decentralized exchanges.
As of the year 2019, most of the transactions on BNB happened through the main exchange, meaning the centralized one.
Also, on the darker side, Binance has already encountered hacking attacks before but luckily no user had to lose their savings in those spasms owing to the company’s insurance policy.
However, a similar situation in the future could be hard on Binance coin holders even if nobody loses their savings, BNB valuation could be damaged.
BNB Has Fewer Platforms
The fact is that almost every crypto exchange tends to trade on Bitcoin and Ethereum, BNB is exchanged over some fewer platforms.
It means that some trading strategies like exchange-hopping, are not possible with BNB, which are otherwise possible with other cryptocurrencies.
If the market for BNB gets crashed, you will have a hard time finding ushers interested in buying your coins since it is not a widely traded currency.
BNB’s Blockchain Isn’t Much Revolutionary
Undoubtedly, the Binance blockchain is moving technology ahead but whether it could ever becoming the leading blockchain is yet mysterious.
Moreover, dApps are fastly growing applications inside the crypto community and because these apps rely on smart contracts, the BNB blockchain doesn’t support them. This can also go against Binance.
How Binance Investment Works?
The Binance (BNB) investment is very much similar to the ways you can invest in other digital currencies.
Purchase and Hold
One of the most recommendable investment methods for Binance coin is simply to buy it when value is low, hold it and sell as the value goes up.
The frequent token burn indicates that supply is getting short, and as the supply gets short, the value will go up.
Staking as a feature is going to be added soon on the platform that will strengthen this method more.
So, the BNB holders will get profit from increasing prices as well as get rewards for holding the token with even more tokens.
Short-term Trading
Even though BNB isn’t perfect for short-term trading, it has high and low periods like any other digital currency.
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That means, you can do short-term trading with it and make a decent profit, only if you’re skilled.
Many short-term trading strategies are likely to work with BNB such as “day trading” in which you get a small but quick profit.
However, on account of having a few platforms, some strategies are difficult to use, say, “Leverage” in which you find someone to lend you money to buy coins.
IRA Investments
The Investment Retirement Account (IRA) is just a variation of purchase and hold, hence, BNB is also viable for IRA.
Since BNB tends to have stable prices, your savings are less likely to lose value. So for the long-term plan, we recommend giving IRA Investment with BNB a shot.
The only problem with that is again having a few exchanges trading it. Since the majority of investment houses aren’t willing to provide you with this long-term service, We recommend managing your IRA Investment account all by yourself.
Steps to Buy Binance Coin
Since not all exchanges allow Binance coin, we will look at the purchasing process through Binance. The process is easy which goes as follows:
- You need to register your BNB account for which you have to provide a username and password.
- Just go to Binance Exchange and make an account.
- You need to verify your account only if they ask you to do it. For that, you might be asked to provide your government-approved ID, or a selfie holding a piece of paper on which “Binance” is written, and/or a proof of residence (mostly the utility bills).
- You will purchase coins using your credit card. For that, select the option of “Buy With Credit Card”.
- A page will appear, now you will select the coin you want to purchase and the amount for it.
- Input your credit card details and your transaction will happen immediately.
- Now you will choose whether to leave your coins parked on eToro or to move them to your BNB wallet. The former option is safer because if the server gets hacked, you will get your money back but if your wallet gets hacked, you will lose all your money.
Final Thoughts
While BNB has some more drawbacks as compared to other digital currencies, we recommend adding BNB to your portfolio since it has a promising future for its blockchain and company.
Also, being relatively stable, BNB makes a good choice to invest in. If you decide to give BNB a shot, always keep an eye on the health of Binance because the token price tends to rise with the company’s fortune.
And if the opposite happens, you will be out of luck. So, if you’re willing to bet your money on a well-doing exchange, Binance is your way to go! Currently, it is hard to believe any BNB investment will lose its value anytime soon.
So, investing in Binance is a safe bet. Then what are you waiting for! Get up to dive into the crypto world where you will get your dreams to come true. We wish you good luck in this wonderful exertion!
In our opinion Binnace Exchange is best for trading. It also gives you token coins free of cost. It also provides many opportunities to earn free coins as well.
If you want to know more about crypto check other blog posts on our website.
