Is BNB Worth Investing in 2024?
Analysts believe BNB shows promise if held long-term due to its growing utility and Binance's expanding ecosystem, though risks like regulation must be weighed.
As the native currency of major exchange Binance, BNB has carved out a unique role for itself by providing users with trading discounts and fueling a bustling ecosystem of opportunities. Upon closer examination, one finds a sophisticated token economy enhanced by regular burn events, as well as innovative use cases emerging every day across DeFi, entertainment, and beyond.
In this comprehensive analysis, we reveal the inner workings of BNB and assess its trajectory as both a utility asset and a potential investment in 2024.
What is Binance?
Binance, founded by Changpeng Zhao (CZ) in 2017, has emerged as one of the largest cryptocurrency exchanges worldwide, providing a robust platform for users to engage in cryptocurrency trading. With support for over 360 cryptocurrencies and virtual tokens, including popular options such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Dogecoin (DOGE), and its own native coin, BNB, Binance facilitates crypto-to-crypto trading with convenience and efficiency. In addition to trading services, Binance offers a secure crypto wallet to store users' digital assets, and it extends its offerings to encompass various features like earning interest, conducting transactions, aiding miners, and assisting traders in making informed investment decisions. While Binance enjoys a global presence, it is worth noting that regulatory limitations exist in certain countries, such as the U.S. and U.K.
Furthermore, Binance's headquarters shifted from China prior to the imposition of cryptocurrency trading regulations by the Chinese government. Overall, Binance presents a comprehensive suite of services encompassing trading, listing, fundraising, de-listing, withdrawing cryptocurrencies, and supporting initial coin offerings (ICOs) for cryptocurrency projects.
What is the Binance Coin (BNB)?
Binance Coin (BNB) is a digital currency specifically designed for use within the Binance cryptocurrency exchange. As the world's largest exchange in terms of trading volume, Binance handles a staggering number of transactions, exceeding 1.4 million per second. BNB serves multiple purposes within the Binance ecosystem, including providing users with fee discounts on the exchange, enabling seamless exchange and trading with other cryptocurrencies like Bitcoin, Ethereum, and Litecoin.
Initially launched in July 2017 through an Initial Coin Offering (ICO), Binance Coin was initially based on the Ethereum blockchain as an ERC-20 token. However, as Binance expanded its offerings and gained prominence, it developed its own blockchain known as Binance Chain. In 2019, Binance conducted a token swap, allowing users to convert their ERC-20 BNB tokens to the new native BNB coins built on the Binance Chain.
During the ICO, the public sale of 100 million BNB tokens took place, with each token priced at 15 cents. The ICO successfully raised $15 million in Bitcoin and Ethereum. The funds generated were allocated for various purposes: 35% for platform and exchange system upgrades, 50% for branding, marketing, and education initiatives, and the remaining 15% as a reserve for emergency situations.
The evolution of Binance Coin reflects the growth and development of the Binance exchange itself. Starting as an ERC-20 token, it eventually transitioned to become the native currency of the Binance Chain. This transition provided enhanced functionality and utility to BNB, solidifying its position as a key component within the Binance ecosystem.
BNB token profile
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Total supply: The initial total supply of BNB was defined as 200,000,000 coins, and as of April 2024, the circulating supply was around 149,532,965 BNB
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1-year price low: $203.66
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1-year price high: $641.48
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All-time high: $690.93 on May 10, 2021
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Current price: As of April 23, 2023, the current price of BNB is around $605
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Market cap: $90,469,258,825
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Markets: BNB is traded on various cryptocurrency exchanges, including Binance, BitMax, and НТХ (Huobi)
How does Binance Coin (BNB) work?
Binance Coin (BNB) operates through a unique mechanism that involves regular token burns and serves a multitude of purposes within the Binance ecosystem. While the initial ICO offered 200 million Binance tokens, the current supply is lower due to the quarterly token burn process. Every quarter, Binance allocates one-fifth of its profits to repurchase and permanently eliminate BNB coins held in its treasury.
Originally created as a utility token to provide discounted trading fees, Binance Coin has expanded its utility across various platforms. It serves as a means of payment for transaction fees on Binance.com, Binance DEX (decentralized exchange), and Binance Chain. When developing the BNB chain, Binance specifically optimized it for trading on-chain, and the newly formed chain became the foundation for Binance DEX. Within the BNB chain, transactions are powered by a blockchain gas token known as BNB, which was previously referred to as Binance Coin, with BNB standing for "Build and Build".
The BNB chain comprises two main components: the BNB beacon chain and the BNB Smart Chain. The BNB beacon chain focuses on governance, allowing BNB holders to actively participate in staking and voting processes. On the other hand, the BNB Smart Chain serves as a consensus layer that is compatible with the Ethereum Virtual Machine and incorporates hubs for multi-chain functionality. This architecture enhances the capabilities and flexibility of the BNB chain, catering to the diverse needs and requirements of the Binance ecosystem.
What is BNB used for?
Trading: Binance Coin (BNB) can be traded for a wide range of cryptocurrencies on various exchanges. Depending on the specific rules and regulations of each exchange, users can engage in trading activities by exchanging their BNB for other digital assets. This flexibility allows users to diversify their cryptocurrency portfolios and take advantage of different investment opportunities.
Transaction fees on Binance exchange: BNB serves as a convenient means to pay for transaction fees on the Binance Exchange. By using BNB to settle fees, users can enjoy discounted rates, making it an attractive option for frequent traders or those looking to reduce their trading costs. This incentive encourages the use of BNB within the Binance ecosystem and offers users a tangible benefit for holding and utilizing the coin.
Credit card payments: BNB can be used as a form of payment to settle crypto credit card bills on platforms such as Crypto.com. By allowing BNB as a payment option, users can seamlessly pay their credit card bills using their BNB holdings, providing greater flexibility and convenience in managing their financial transactions.
Payment processing: Merchants have the opportunity to accept BNB as a means of payment for their goods and services. This integration of BNB into payment processing systems allows customers to have more options when making purchases, and merchants can tap into a broader customer base that values the ease and efficiency of transacting with cryptocurrencies.
Booking travel: BNB can be utilized for booking travel-related services, such as hotel accommodations and flights, on select websites. By accepting BNB as a payment option, these travel platforms cater to the growing demand for cryptocurrency payments, enabling users to conveniently use their BNB to plan and book their travel arrangements.
Entertainment: BNB holds utility in the realm of entertainment. Users can leverage their BNB holdings to purchase virtual gifts on various platforms, engaging with content creators and supporting their favorite online personalities. Additionally, BNB can be used to participate in online lotteries or gaming platforms, offering users an immersive entertainment experience with the added convenience of using their cryptocurrency holdings.
Investment: Binance Coin opens up investment opportunities beyond traditional cryptocurrency trading. Through specific platforms and services, investors can utilize BNB to invest in stocks, ETFs (Exchange-Traded Funds), and other assets. This expansion into traditional investment avenues allows BNB holders to diversify their investment portfolios and explore additional wealth-building opportunities using their cryptocurrency holdings.
Loans and transfers: BNB can be used as collateral for obtaining loans on certain platforms, providing users with access to capital without needing to sell their BNB holdings. This borrowing capability gives users the flexibility to leverage their BNB assets for various financial needs. Additionally, there are applications that facilitate easy bill splitting and payments to friends and family using Binance Coin, simplifying the process of transfers and enabling seamless transactions between individuals.
BNB price prediction 2025
TU analysts have prepared Binance Coin price prediction for 2025.
| Month | Minimum Price | Average Price | Maximum Price |
|---|---|---|---|
| January 2025 | $587.63 | $652.92 | $718.21 |
| February 2025 | $591.74 | $657.49 | $723.24 |
| March 2025 | $595.88 | $662.09 | $728.3 |
| April 2025 | $600.05 | $666.72 | $733.39 |
| May 2025 | $604.25 | $671.39 | $738.53 |
| June 2025 | $608.48 | $676.09 | $743.7 |
| July 2025 | $612.74 | $680.82 | $748.9 |
| August 2025 | $617.03 | $685.59 | $754.15 |
| September 2025 | $621.35 | $690.39 | $759.43 |
| October 2025 | $625.7 | $695.22 | $764.74 |
| November 2025 | $630.08 | $700.09 | $770.1 |
| December 2025 | $634.49 | $704.99 | $775.49 |
However, you should be aware that all forecasts are subject to adjustment due to changes in fundamental factors.
The future price of Binance Coin (BNB) can be influenced by a range of factors that shape the cryptocurrency market. These factors should be considered when assessing the potential future value of BNB:
Market demand and adoption:
The widespread adoption and increased usage of BNB can have a positive effect on its price. As more individuals and businesses adopt BNB for various purposes, such as trading, payments, and investments, the demand for the token may rise, potentially driving up its price
Overall cryptocurrency market conditions:
BNB's price is interconnected with the overall conditions of the cryptocurrency market. Factors like market sentiment, regulatory developments, and macroeconomic factors can impact not only BNB but also the entire cryptocurrency industry. It's important to consider these broader market trends when evaluating BNB's future price movements
Binance ecosystem developments:
BNB's price can be influenced by the progress and innovations happening within the Binance ecosystem. Updates, partnerships, and the introduction of new features by Binance can enhance the utility and demand for BNB. Positive developments within the Binance platform may contribute to price appreciation
Burning of BNB tokens:
Binance employs a token burning mechanism, where a portion of BNB tokens is permanently removed from circulation. This process reduces the token supply, potentially increasing the scarcity and value of BNB over time. The regular burning of tokens by Binance can have a positive impact on the price of BNB in the long run
Investor sentiment and speculation:
Investor sentiment and market speculation can significantly influence the price of BNB. Positive news, announcements, and optimistic sentiment within the cryptocurrency community can drive up demand for BNB, leading to price increases. Conversely, negative sentiment or market uncertainty can result in price declines
Market manipulation and whale activity:
Like many cryptocurrencies, BNB is susceptible to market manipulation and the actions of large holders, commonly known as "whales". Significant buy or sell orders from these influential entities can create volatility and affect the price of BNB. It's important to be aware of such activities and their potential impact on the market
opBNB and BNB Greenfield: Innovations Fueling BNB's Potential
Beyond its established role within the Binance ecosystem, BNB's price is increasingly influenced by innovative developments like opBNB and BNB Greenfield. These advancements expand the capabilities and utility of the BNB Chain, potentially driving demand and value for BNB.
opBNB: Scaling for the Future
opBNB is a layer-2 scaling solution built on top of the BNB Smart Chain (BSC). It leverages Optimistic Rollup technology to address scalability challenges faced by BSC, enabling faster and cheaper transactions. Key benefits of opBNB include:
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High Throughput: opBNB significantly increases transaction processing capacity, allowing for greater scalability and accommodating a larger user base
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Reduced Fees: By processing transactions off-chain and only submitting the final results to the BSC mainnet, opBNB drastically reduces gas fees, making it more cost-effective for users
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Enhanced User Experience: Faster transaction speeds and lower fees contribute to a smoother and more efficient user experience, attracting more users and dApps to the BNB Chain ecosystem
The implementation of opBNB is expected to attract more developers and users to the BNB Chain, potentially increasing the demand for BNB as the native token for gas fees and network interactions.
BNB Greenfield: Decentralized Storage Solutions
BNB Greenfield introduces a decentralized storage infrastructure within the BNB Chain ecosystem. It allows users and dApps to store data securely and efficiently on a distributed network, offering several advantages:
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Data Ownership and Control: Users retain full ownership and control over their data, eliminating reliance on centralized storage providers
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Enhanced Security: Data is stored across a decentralized network, reducing the risk of single points of failure and enhancing data security
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Interoperability: BNB Greenfield integrates seamlessly with other BNB Chain components, enabling dApps to leverage decentralized storage capabilities
By providing a robust and decentralized storage solution, BNB Greenfield expands the possibilities for dApp development and data management within the BNB Chain ecosystem. This increased functionality can attract more projects and users, potentially driving demand for BNB as the native token for accessing and utilizing the storage infrastructure.
Combined Impact on BNB Price
Both opBNB and BNB Greenfield contribute to the growth and evolution of the BNB Chain ecosystem, making it more scalable, efficient, and versatile. These advancements can attract a larger user base and stimulate increased demand for BNB, potentially leading to price appreciation.
Pros and cons of BNB
👍 Pros
• Utility token excellence:
BNB stands out as one of the top utility tokens in the cryptocurrency industry. Its versatile functionality and wide range of uses make it highly valuable to users within the Binance ecosystem
• Innovative burndown policy:
BNB implements a unique burndown policy, wherein a portion of the token supply is permanently removed from circulation. This mechanism helps maintain scarcity and potentially drives up the value of BNB over time
• Discount benefits:
BNB serves as a discount coupon on the Binance exchange platform. Users who hold and utilize BNB for transaction fees can enjoy discounts, providing a cost-saving advantage when engaging in trading activities
👎 Cons
• Regulatory impact:
Regulatory developments within the cryptocurrency space can impact the holding and trading of BNB. Changes in regulations or government policies may introduce limitations or requirements that affect the accessibility and usage of BNB in certain jurisdictions
• Limited to Binance exchange:
BNB's progress and reputation are closely tied to the Binance exchange. Any issues or negative developments related to the exchange can directly affect the perception and value of BNB
How to buy the Binance Coin?
Here are the steps to buy Binance Coin (BNB):
Choose a Binance Coin compatible wallet:
Select a wallet that supports Binance Smart Chain (BSC). Options include hardware wallets like Ledger Nano S or Trezor, as well as software wallets like MyEtherWallet or MetaMask
How to buy Binance Coin
Create an account on a cryptocurrency exchange:
Sign up and create an account on a reputable cryptocurrency exchange that supports BNB. Popular exchanges for buying BNB include Binance, Coinbase, or KuCoin
How to buy Binance Coin
Complete the account verification process:
To comply with regulations, most exchanges require users to complete a verification process by providing personal information and identification documents. Once your account is verified, you can proceed to buy BNB
Deposit funds:
Add funds to your exchange account using available payment methods such as bank transfers, credit/debit cards, or third-party payment channels, depending on the options provided by the exchange
How to buy Binance Coin
Buy Binance Coin:
Once your account is funded, access the trading section of the exchange and search for the BNB trading pair (e.g, BNB/USD, BNB/BTC). Specify the desired amount of BNB to purchase and follow the exchange's instructions to complete the transaction
How to buy Binance Coin
Transfer BNB to your wallet:
After buying BNB on the exchange, it is recommended to transfer your BNB to your personal wallet for enhanced security. Follow your wallet's instructions to receive the BNB by providing your wallet address. This step ensures that you have full control over your BNB and reduces the risk of potential issues or hacks on the exchange
Is BNB a good investment in 2024?
In 2024, Binance Coin (BNB) shows potential as a favorable investment option for long-term investors. However, it is crucial to approach investment decisions with caution and conduct comprehensive market analysis. The cryptocurrency market is known for its volatility, which means that investors should be prepared for substantial gains as well as losses. Therefore, it is advisable to carefully evaluate the factors affecting BNB's price, such as market demand, ecosystem developments, and regulatory conditions, before making any investment choices. By exercising prudence and staying informed about the cryptocurrency market trends, investors can maximize their chances of a successful investment in BNB.
Expert Opinion
I believe Binance Coin shows strong potential as both a platform token and a long-term investment.
BNB benefits greatly from its association with the world's largest crypto exchange. However, as we've seen with regulatory uncertainty surrounding Binance in some jurisdictions, the coin's fortunes are closely tied to any challenges that might face the exchange.
One caveat is that at the time of writing this article, BNB is trading close to its all-time high price. Investing substantial sums when a coin is at or near its ATH carries more risk. Prices could flatline or enter a prolonged downtrend as short-term speculators take profits. For new investors, it may be prudent to wait for a healthy pullback before entering sizable BNB positions.
Another factor to consider is BNB's large circulating supply. While burns are reducing this number, it may be harder for BNB's price to appreciate sharply relative to some smaller market cap coins. Steady gains appear more likely than explosive short-term growth.
For investors with a 2-5 year horizon, accumulating BNB during periods of price weakness seems a sensible strategy. I'd emphasize Dollar Cost Averaging to mitigate volatility risk. And always research upcoming exchange developments that could boost the usage of the Binance Coin.
FAQs
What is BNB in Binance?
BNB is the abbreviation for Binance Coin, the native cryptocurrency of the Binance exchange.
What is Binance Coin used for?
Binance Coin (BNB) is primarily used for paying transaction fees on the Binance exchange. It also has various other applications within the Binance ecosystem.
What is the benefit of BNB on Binance?
The main benefit of using BNB on Binance is that it offers users a discount on trading fees when used as a payment method.
Is Binance BNB safe?
Binance takes measures to ensure the security of BNB and the Binance platform. However, it is recommended for users to follow best security practices and safeguard their own BNB holdings.
Glossary for novice traders
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1
Broker
A broker is a legal entity or individual that performs as an intermediary when making trades in the financial markets. Private investors cannot trade without a broker, since only brokers can execute trades on the exchanges.
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2
Cryptocurrency
Cryptocurrency is a type of digital or virtual currency that relies on cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies operate on decentralized networks, typically based on blockchain technology.
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3
Trading
Trading involves the act of buying and selling financial assets like stocks, currencies, or commodities with the intention of profiting from market price fluctuations. Traders employ various strategies, analysis techniques, and risk management practices to make informed decisions and optimize their chances of success in the financial markets.
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Investor
An investor is an individual, who invests money in an asset with the expectation that its value would appreciate in the future. The asset can be anything, including a bond, debenture, mutual fund, equity, gold, silver, exchange-traded funds (ETFs), and real-estate property.
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5
Ethereum
Ethereum is a decentralized blockchain platform and cryptocurrency that was proposed by Vitalik Buterin in late 2013 and development began in early 2014. It was designed as a versatile platform for creating decentralized applications (DApps) and smart contracts.
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Team that worked on the article
Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data. He is also an educator in the field of finance and technology.
As an author for Traders Union, he contributes his deep analytical insights on various topics, taking into account various aspects.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).