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Is Investing In Binance Coin a Good Decision In 2020?

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Introduction

Binance coin is a widely known cryptocurrency made by the Binance exchange. It is by far the world’s largest cryptocurrency exchange and offers a wide range of crypto-to-crypto pairs. This cryptocurrency runs on the Ethereum blockchain with ERC 20 standard. Binance coin is also responsible for expanding the scope of the operation of the Binance exchange because the currency supports various utilities on the platform like paying for exchange fees, trading fees, listing fees, and other fees that are payable on the Binance exchange. 

It was made available to the users for the first time during an Initial Coin Offering (ICO) on July 25, 2017. Angel investors were offered 10% of the BNB tokens, the founding team was offered 40% of the tokens, and the various other participants were offered the remaining 50% of the tokens through the ICO process. The funds raised through the ICO process were planned to be allocated for various purposes like: 

  • Branding and marketing of Binance
  • Development of the Binance platform.
  • Upgradation of the Binance ecosystem. 

During April 2018, the market cap of the Binance coin was $1.4 billion.

The Binance coin has also collected support with the help of partnerships that have helped the usage period of the coins. One such partnership was done with Uplive, a premier live-video streaming platform of Asia that sells virtual gifts to the users in exchange for BNB tokens to an extensive user base of 20 million on Uplive. 

Is Binance Coin a Good investment or not?

There are a lot of factors that help to determine whether an asset will be a good investment or not. Market structure, daily trade volume, and USPs (Unique Selling Points) are some of the most relevant factors to make this judgment. Market structure can be defined as the macro price activity of an underlying asset. In the case of BNB, the market structure seems promising.

The currency took off in the year 2019 at an approximate price of $6 and climbed its all-time high price of $38.54 as of June 21, 2019. After that, the price has been significantly retraced along with the rest of the cryptocurrency market and has maintained a good price. Also, at any point in time, the price action of BNB coin remains above the key price levels as well as market structure. 

The daily trading volume of BNB is also impressive. At the time of writing this article, the last 24-hour trading volume $2,193,941,846. Apart from the market structure and daily volume, there is an important factor, i.e. tokenomics, that can help to determine whether an asset will be a good investment or not.

Tokenomics means the design of the cryptocurrency and its characteristics that impact its value. These characteristics include game theory, economic incentives, computer science, and cryptography. The tokenomics of Binance coin are very strong. It has been designed in a way that allows easy adoption and utilization, which increases the price of the coin even more. 

Conclusion

Binance Coin (BNB) is a popular cryptocurrency and can always be found ranked on the top 10 spots of the CoinMarketCap platform. It is a leading token in the crypto exchange ecosystem and is utilized on a large scale on the Binance platform. If Binance will continue to invest efforts in expanding the products, it has to offer and onboards new users. Then there won’t be any reason to classify Binance coin under the ‘not a good investment’ category.

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