Is Binance Worth Investing in 2024?

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Binance Coin (BNB) is the native cryptocurrency of the Binance exchange. It has multiple uses within the Binance ecosystem, including paying for transaction fees and accessing various services.

Binance Coin (BNB) is a digital cryptocurrency that operates on the Binance blockchain platform, one of the largest and most popular cryptocurrency exchanges in the world. Serving as the native token of the Binance ecosystem, BNB has gained significant attention and utility due to its versatile functionalities, such as discounted trading fees, participation in token sales, and governance rights. With the continued growth of Binance's user base and its innovative projects, the question of whether BNB is a good investment in 2023 arises. In this context, it becomes crucial to explore the various factors influencing BNB's potential, including its historical performance, market dynamics, and Binance's roadmap for the future.

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What is Binance?

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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

Max supply: The total supply, as of June 2023, is 155,851,405.16 BNB

Total supply: The initial total supply of BNB was defined as 200,000,000 coins, and as of June 2023, the circulating supply was around 155,851,405.16 BNB

1-year price low: The 1-year price low for BNB was $213.67 on June 30, 2023

1-year price high: The 1-year price high for BNB was $388.72 on June 30, 2023

All-time high: The all-time price high for BNB was $690.93 on May 10, 2021 (As of June 30, 2023)

Current price: As of June 30, 2023, the current price of BNB is $256.35

Market cap: As of June 30, 2023, the market cap of BNB is $37,210,140,745

Markets: BNB is traded on various cryptocurrency exchanges, including Binance, BitMax, and Huobi Global

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. In 2023, the 23rd and second quarterly BNB burn was completed, resulting in the auto-burn of 2,020,132.25 BNB, with an approximate value of around $676,744,304 USD.

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 $534.82 $594.25 $653.68
February 2025 $554.08 $615.64 $677.2
March 2025 $571.19 $634.66 $698.13
April 2025 $588.31 $653.68 $719.05
May 2025 $609.7 $677.45 $745.2
June 2025 $620.4 $689.33 $758.26
July 2025 $637.51 $708.35 $779.19
August 2025 $641.79 $713.1 $784.41
September 2025 $652.49 $724.99 $797.49
October 2025 $669.6 $744 $818.4
November 2025 $686.72 $763.02 $839.32
December 2025 $705.97 $784.41 $862.85

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

Binance Coin (BNB) performance till date

BNB price chart

BNB price chart

Binance Coin (BNB) has had a varied performance history, reflecting the volatility of the cryptocurrency market. In early 2021, during a bullish phase, BNB reached an all-time high of approximately $690.93 on May 10, 2021.

However, throughout the summer of that year, BNB struggled to maintain its momentum, trading mostly below $400. There was a brief recovery in November 2021 when the price surpassed $600. However, geopolitical tensions, specifically Russia's invasion of Ukraine, caused a decline in the market, leading BNB to drop to $371.37 on January 24, 2022. The price continued to decline, reaching $361.23 on February 24.

Subsequently, BNB experienced some upward movement, reaching a peak of $408.48 on March 1, 2022, before falling again to $360.30 on March 14. It then saw a temporary rise to $459.81 on April 5. However, on May 12, 2022, as the cryptocurrency markets experienced a significant sell-off following the depegging of the UST stablecoin, BNB plummeted to $216.36. Although the price recovered to $336.67 on May 25, it faced further declines afterward.

In June 2022, the U.S. Securities and Exchange Commission (SEC) initiated an investigation into whether Binance's initial coin offering (ICO) of BNB in 2017 violated securities regulations. This news had a negative impact on BNB, causing a 4% drop in price, briefly dipping below $200 on June 15. The price partially rebounded to $222.83 the following day but subsequently fell to a low of $186.22 two days later.

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 Ethereum-based tokens, as BNB is an Ethereum token. Options include hardware wallets like Ledger Nano S or Trezor, as well as software wallets like MyEtherWallet or MetaMask

How to buy Binance Coin

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

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

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

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 2023, 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.

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.

Team that worked on the article

Chinmay Soni
Contributor

Chinmay is a certified Investment Analyst and Portfolio Manager by the National Stock Exchange (NSE) Academy. He is currently associated with a $75 million VC fund and assists them in identifying and researching investable sectors and start-ups. He has completed his Bachelors of Business Administration from the Institute of Management, Nirma University and is currently pursuing MBA majoring in Finance from the same. He has 4 years of hands-on investment experience in a variety of asset classes and his professional qualifications include being a CFA Level 2 candidate and NSE Certified Market Professional Level 2.

He finds writing as a way to express his thoughts and share his knowledge with people eager to learn. He himself happens to be an avid reader of personal finance books and on top of his recommendation list are the international bestsellers ‘The Psychology of Money’ and ‘Think and Grow Rich’

He has this one strong belief as his motto: Life is what you make of it.

Dr. BJ Johnson
Dr. BJ Johnson
Developmental English Editor

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.

The topics he covers include trading signals, cryptocurrencies, Forex brokers, stock brokers, expert advisors, binary options. He has also worked on the ratings of brokers and many other materials.

Dr. BJ Johnson’s motto: It always seems impossible until it’s done. You can do it.

Mirjan Hipolito
Cryptocurrency and stock expert

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). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.