The Lowdown on Binance Coin Predictions
It’s hard to predict something, but at the same time it’s necessary to have expectations. Expectations go a long way in helping you make educated decisions and figuring out the cryptocurrency market can be a lucrative process. Becoming the world’s largest cryptocurrency exchange valued at over $6 billion, Binance has grown at an exceptionally fast rate.
So fast, in fact, that millions of users per week are signing up to become part of the trading.
This, of course, meant that the market had to launch their own ICO, in the form of Binance Coin. The token itself is an ERC-20 built on Ethereum, giving it the assurance to run on the Ethereum blockchain and with it, added security and features.
For those that missed it, the name comes from a combination of binary and finance, which is fitting considering how the platform only deals in digital assets, not fiat currencies. Just how much up can the Binance token look to make within the coming years?
To Predict, You Must Understand Binance Coin
Before you can go creating spreadsheets and data-driven analysis of any crypto, you need to grasp just what makes that coin valuable. In this case, you’re looking at Binance coin and how it plays into the crypto market.
BNB, as it’s called, is the native cryptocurrency used on the Binance system. The company started out back in 2017, founded by Chinese business man Changpeng Zhao. The currency is currently used to fund trades and fees produced from trading on the Binance platform.
Where Does Binance Coin Go from Here?
This is the big question that every investor wants to know. The major question mark of getting involved with BNB is whether you should buy some now. Doing so will allow you more freedom and less dues paid, over time, stretching your investments even further. Even though your primary trade volume may not be composed of Binance coin, there is still reason to own it.
Some might question owning more than a typical amount of BNB and maybe for a good reason, if you’re playing the short game. Over the past few weeks, Binance coin has dropped quite a bit in terms of market value, losing almost four dollars in a matter of weeks.
Considering, though, that the currency has only been around for one year, there are going to be lull periods. At some point, trends must go down. These times prove that, even though lines dip and profits fall, investment is still at an all-time high, and cryptocurrencies must battle themselves to survive.
The Forecast Could Be Bright for BNB
One’s things for certain regarding BNB: the total supply of tokens will decrease over time. Binance Coin launched with 200 million coins, but Binance itself destroyed 100 million of the currency over time. This brought the total amount of tokens to 100 million.
While some may argue that destroying coins could help build a quick value, as that means less people will have a hold of the currency, others might look at the opposite view. Remember that Binance allows users a trading fee discount when paid with BNB, but this percentage decreases over time. Year one may be a nice 50% discount, but by year five, the number drops to a flat zero. In between, you have year two at 25%, year three at 12.5%, and year four comes in at 6.75%.
Thus, arguing the value goes down as the fee rebate does could play a crucial role in the overall trading of Binance Coin. Right now, however, the trend is downward. The current number of circulating supply is sitting at 98 million coins, meaning not all the coin is purchased. Less users owning shares in the token will drive the value down, as there isn’t any clear-cut demand because of that.
Overall, though, the Binance looks to create a stable price and market for their BNB. Again, most of the value comes from decreased trading fees, so if the company can obtain a full 100% supply ownership, the value could easily increase in the long-term with a nice positive outlook.
Using BNB to Invest in Other ICOs
While the main purpose of BNB, currently, comes from fee payments, the secondary area it shines is investing in new ICOs. Binance has their own launch program, aptly titled “Launchpad,” for ICO. The program allows those you want to invest Binance Coin into a new token can do so, and once the ICO is over, the tokens are automatically available on the marketplace. The whole system provides a seamless marketplace experience from ICO to exchange.
Because of this, new startup tokens can be had for cheaper than normal if using BNB to purchase them and if you’re within the first four years of using Binance – though everyone is at this stage. If you’re the type of investor that believes in having multiple cryptocurrencies at once and is willing to take the plunge on outliers, this is a good way to do so.
How Binance Chain is Aiding in BNB Outlook
Even though cryptocurrency is a secure network, that doesn’t mean problems don’t arise. Most of the time, you find this with hacking incidents. Almost every crypto exchange faces the issue of someone, or party, hacking into the system. The more often this happens, the less likely investors are to get onboard with sinking funds into that exchange and market.
Binance’s response is a decentralized exchange, which is touted as a community-based system, not company. This new system, Binance Chain, looks to start their own tailored blockchain. The point here is that Binance’s new platform is built on blockchain technology. This means that Binance Coin is the primary coin of use within the market.
What this means for the exchange is simple: when investors join Binance Chain, there will be automatic demand for the currency. This works by using BNB as a token of exchanging value, which is different than its primary use today. Other tokens, such as Bitcoin or Ethereum, already trade like this, and once running the decentralized exchange should provide added value to the coin.
The system isn’t live yet, but when it does see full launch sometime soon expect Binance Coin to jump in value accordingly.
There are Always Risks with Cryptocurrencies
It may seem easy to invest in a cryptocurrency, especially one that’s home to the biggest exchange on the market today. It’s also easy to get caught up in what you think will happen with what could happen, in terms of valuation.
While BNBs value looks upward, that number can just as easily fall back down. Even so, the short-term value doesn’t have a lucrative nature to it, either. You can attribute this to the approaching first year trading fee coming to an end. Even though 25% off trading is a solid deal, that is a far cry from the initial 50% offered.
Also, remember that while there can be plenty of models, data, and predictions out there, nothing is every certain with cryptocurrency. That’s part of the reason that makes the hunt and trade very exciting and profitable, but also risky.
Binance Coin is Ready to Grow
Everything considered, Binance Coin has set itself up for a solid future if everything works out accordingly. Binance has built a platform for the token to see its value increase due to the nature of the trading system, while the total supply of shares has decreased by 50% within the last six months.
This is normal, and was a planned venture, mainly to secure a steady price for the crypto, but also to increases of the value of its current investors. Of course, all this is ingrained into one of the best exchange software you’ll find.
The market value of BNB has been the same, or slightly lowering itself, over time, but always seems to find a quick turnaround for value. This could be the case with Binance Chain launching, and if the currency hits a 100% circulation rate at any given time the returns could explode. The company knows what it’s doing, and to keep their token alive and thriving they will continue to improve their trading platform. BNB is the world’s 15th largest coin with a market cap of $1.7 billion, so there is room to improve.
Even though Binance Coin has dropped in value the past couple of months, expect a resurgence shortly, especially once it has become the gas of the decentralized Binance exchange.