Binance Coin (BNB) has outperformed other large-cap crypto assets over the past 12 months – with new developments on the way, is now a good time to buy?
Binance Coin (BNB) is the native token of the Binance ecosystem and the 4th largest cryptocurrency by market cap.
BNB significantly outperformed both Bitcoin (BTC) and Ethereum (ETH), growing over 1,300% in 2021 – researchers expect this trend to continue.
BNB is currently down 46% from its all-time high (ATH) on May 10 2021 and is down 30% year-to-date (YTD).
Most experts are bullish on BNB and expect Binance’s healthy warchest and its focus on new blockchain developments to provide strong long-term price action.
2022 has not been a good year for crypto investors so far. The overall crypto market is down 25.6% from January 1 and BNB coin has further underperformed the market, currently valued at US$393 ($558 AUD) down 30% YTD. As of today, BNB is ranked as the 4th largest cryptocurrency by market cap and is one of the most well-established & widely used digital assets in the cryptocurrency sector.
Table of Contents
What is Binance Coin (BNB)?
Binance Coin (BNB) is the native token of the Binance ecosystem. Quite simply, BNB is used to pay and validate transactions on the Binance Smart Chain (BSC). The 29 million users of the Binance exchange are incentivized to use BNB wherever possible and are rewarded with 10-25% discounts when using BNB for transactions fees and payments.
BNB Tokenomics
BNB is a deflationary token, meaning that the total number of BNB tokens decreases over time. This generally tends to have a positive impact on price long-term, as the total number of tokens becomes more scarce.
Binance reduces the supply of BNB every quarter based on the amount of trading volume. In crypto parlance, reducing the number of tokens in circulation is called a “burn”. Binance states that they will continue the quarterly burns until 100 million BNB are destroyed, which is equivalent to 50% of the total supply.
A total of 31.9 million have already been burned from a total circulating supply of 168.1 million thus far.
A Brief History of Binance
Binance was launched in July 2017 by founder and CEO Changpeng Zhao, affectionately known in crypto circles and on Twitter as “CZ”. CZ said that he decided upon the name “Binance” after combining the words “Binary Finance”. CZ stressed that the name was a signal to investors that a new paradigm of ‘binary’ assets (cryptocurrency) was being ushered into the world of global finance.
Binance is quite well-known, owing to its status as the world’s largest cryptocurrency exchange based on both users and daily trading volume. However, the Binance ecosystem goes far beyond just the exchange and includes a diverse lineup of blockchain-related projects, such as Binance Chain, Binance Smart Chain (BSC), Binance Academy, Binance Research, Binance Labs, Binance Launchpad, and even Trust Wallet.
BNB News & Information 2022
The most important thing that investors need to keep an eye on when it comes to BNB is regulation. Binance was banned from the UK in June last year after regulators concluded that the exchange’s activity could not be “sufficiently supervised”, and now regulatory agencies around the world are beginning to take action against suspicious activity on Binance and other major crypto exchanges.
CZ has stressed on multiple blog posts and tweets that Binance is staunchly “pro-regulation” and is willing to work alongside all domestic regulators to make cryptocurrency as accessible as possible. While this eagerness for transparency and bipartisanship is definitely nice to see from Binance, it means practically nothing to regulatory agencies like the SEC who are looking to shut down anything they consider to be “unregulated” in the crypto market.
Regulation fears aside, Binance had an extremely successful 2021 – introducing the Binance Smart Chain (BSC) and the host of Defi, NFT, and smart-contract applications that came with it. As Ethereum “gas” prices climbed in 2021, the BSC offered a faster, less expensive alternative for those looking to build Defi projects, mint NFTs or create new DApps. Because BNB is the native token for all transactions and payments on the BSC the price soared in response, growing over 1,300% in 2021 alone.
BNB Short-term Price Prediction (1 month):
Analysts at FXStreet are quite bearish on BNB in the short term. If Binance Coin can’t hold steady at its final support level of US$350 ($497 AUD), it is possible that bears will continue to push BNB to new lows, and a further 30% drop from here could be on the cards…
Contrastingly, if BNB can hold strong at its support level of US$350 ($497 AUD) for the coming days and closes above US$417 ($592 AUD) in the next two weeks, then the bearish prediction above is invalidated.
BNB 1-Year Price Prediction (2022)
Short-term technical analysis from both TradingView and CoinCodex remains bearish, with most indicators leaning towards a negative price sentiment for the coming months. The overall analysis of BNB remains bullish for the long-term with automated analysis from WalletInvestor predicting that BNB could feasibly reach a price of US$789 ($1122 AUD) by the end of 2022.
Analysis from DigitalCoinPrice is slightly less bullish and predicts that BNB will be worth US$584 ($830 AUD) by the end of this year. Additionally, CoinQuora suggests that an end-of-year price target of US$700 ($995 AUD) is still on the cards. Finally, analysis from Gov.Capital predicts that BNB will finish the year at a price of $597 ($849 AUD).
BNB 5-year Price Prediction (2026)
Automated analysis from Wallet Investor states BNB could be valued at US$2,450 ($3,485 AUD) in the next 5 years, provided that current macro-trends continue.
Gov.Capital’s algorithmic predictions are slightly less bullish than Wallet Investor but still, put BNB at a value of US$2,183 ($3,105 AUD) come 2026.
How to Buy BNB
So, if you decide to go ahead and purchase BNB you can do so on every major crypto exchange. Unless you are already extremely comfortable with a certain exchange or platform, the best place to purchase BNB is on the native Binance exchange itself, as Binance will charge users lower fees and offer incentives for everything involving BNB.
BNB Price Prediction Conclusion
BNB token has an extremely solid & sustainable foundation for growth and strong performance in the wider crypto market. Because BNB is a high utility token with a host of real use cases, it is arguably one of the safest crypto assets to invest in. It is also the native token in the Binance Smart Chain, which is posing serious competition to the Ethereum platform.
Owing to its current status as the 4th largest cryptocurrency, flexing a substantial market cap of US$62 billion ($87.6 billion AUD), it is unlikely that you’ll ever 100X your money with BNB.
It can be useful to imagine BNB as a large-cap tech stock (like Facebook), except in the crypto market. Binance maintains a strong market-leader status in all of the most fundamental sectors of the crypto market. They have the largest number of users and the highest consistent daily trading volume of any exchange.
While BNB may not ever “moon” from here, it has all the necessary fundamentals to grow sustainably into the future. Investors should keep a watchful eye on all updates regarding regulation as the price of BNB is particularly vulnerable to events that disrupt the performance of Binance and its financial activity.