With Binance capturing a majority of the market share of trades, it is no surprise that their native coin, Binance coin, is doing well. What most investors would consider an extremely high risk asset in comparison to historical exchange activity (Mt. Gox), Binance coin has proven to be a worthy investment.
Binance Coin Price Development Over Time Via CoinMarketCap
If you invested in Binance coin during the December crash after the BCH and BSV conflict, then you would easily have over 6 times your investment today. With those kind of gains and decoupling from Bitcoin price movement, BNB is moving into a digital asset class of its own.
What to expect coming up
With the price heavily inflated, BNB holders should be considering to hedge their portfolio. Although, the launch of Binance Chain in April 2019 seems to be signalling towards a continual climb of the asset price.
Most recently, the project has started to capture a majority of the Initial Exchange Offering market. By using BNB as the only investment vehicle on each monthly listing, BNB’s use cases are growing tremendously. Additionally, there is a strong pull towards margin trading for the platform. There have been several photos showing the margin trading platform, and on June 13, Binance tweeted about the new trading vehicle. Sign up now if this is something you are interested in for early access!
As big as this is for Binance, there are multiple things that are contributing to the BNB price success. Now, let’s look at my top reasons why Binance coin will soon become a top 5 cryptocurrency.
The total supply of Binance coin is approximately 189 million from CMC metrics with a circulating supply of around 141 million. This is just a small amount compared to most projects across the space. In addition, CZ has made a point to make quarterly token burns of this circulating supply from the internal revenue vehicles like exchange fees.
The token burns are scheduled to take place at the end of each quarter of the year. This is huge for asset price because this cuts the circulating supply and increases demand naturally from the deflationary system applied. In short, the price should organically rise from the continued coin burns.
Initial Exchange Offerings
Beside the diminishing supply, the Binance Launchpad, which is mentioned above, is the platform on which initial exchange offerings take place. Specifically, this platform gives the BNB coin even more utility then it already has. For every project launched on this platform like BitTorrent (BTT), investors are forced to buy into the offering by holding a sufficient amount of BNB coins. Investors that do not get in early enough or do not have a large enough stake are entered into a lottery system due to the surge of applicants.
The surge of applicants will continue to grow into this next bull market. Hence, more and more traditional traders are going to gravitate towards crypto to capitalize. From being the largest liquidity provider, traders and funds will naturally hone in on the exchange with the lowest fees to manage assets. Binance will clearly be one of the top choices.
In sheer volume alone, every fund will have an exposure base to this exchange in the next bull market to capture gains and short efficiently. This increased amount of trading activity will multiple revenue which should in turn increase the token burn at the end of each quarter.
On top of all the other use cases, projects are slowly but surely starting to migrate towards the Binance Chain. The benefits of basically partnering with the worlds largest exchange are endless, but simply it helps cement your project in the crypto scene by moving your token to the Binance Chain.
After the launch of the chain, an upcoming endeavor is now the launch of the Binance Dex. As a decentralized exchange with a functioning and thriving eco-system, the Binance Coin should appreciate naturally from the continual use and revenue spikes. A article from Global Coin Report had this to say about the upcoming Dex:
Every transaction within the DEX will require BNB in some amount, and the coin will be larger than ever. In fact, many view it as one of the biggest coins in the future, which will serve on the biggest exchange, and be paired with every coin which enters the exchange.Global Coin Report
Decoupled Price Movements
In addition to being a great investment, any coin that can decouple itself from the Bitcoin price movements is highly sought after. In the recent surge, it seems more or less that Bitcoin has left all of the altcoin market behind as it pushed to new levels not seen since early 2018.
Binance coin is an exception to the altcoins in that it seems to be growing organically at an astounding rate. With it being almost completely decoupled from the rest of the market, traders can now look to trade this coin independent of the market sentiment.
Asset Cash Flow
A common theme among many wealthy traditional investors like Kevin O’Leary and Mark Cuban is that they like to invest in projects that have a substantial amount of cash flow. Cash flow is vitally important to the success of any project as without it, the project can not survive stagnant markets. Clearly throughout the bear market, Binance not only survived but thrived. This is a huge indicator of long-term success for the platform as a whole.
Finally, the market overall has a good amount of brand trust in the Binance name and in the CEO, CZ. Both of which have consistently proven themselves to be loyal, open and transparent hosts to the crypto community. From internal hacks, system malfunctions, announcements, and even to Craig Wright, Binance and its leader continue to build a reputation of dependability which will in turn reap benefits for their coin and platform.
BNB CAN BECOME A TOP 5 CRYPTOCURRENCY
With everything listed above, BNB is already setting greater standards than almost any coin that has come before. For BNB to reach the top 5 coins in the market, it only has to get to a $7 billion market cap which would currently put the price of one coin over $50. This is easily obtainable as we move into Q3 of 2019 and a token burn is fast approaching.
Nothing above should be taken as financial or investment advice. Do your own due diligence and research before investing. In full disclosure, I do not own any BNB.