Binance Coin (BNB) has in the last two years of its creation grown by 900%. This is evident as the coin is currently the third-largest cryptocurrency with a market cap of over $97 billion. However, the sharp rise of Binance Coin’s popularity can be owed to the successful growth of the Binance exchange and the development of its updated blockchain, Binance Smart Chain.
With the growing market value of BNB, it is a business norm that crypto traders would be tickled with the interest of investing in it. But before concluding this mull of Binance Coin investment, here are some factors to put into consideration and knowledge.
1. Binance Is Confronted With Regulatory Challenges
Binance is reputed as one of the crypto exchanges in the world, with its array of services and currencies being trumped to earn the level of popularity it has today.
Recently, the United Kingdom placed a ban on one of Binance affiliates. Also, Binance is not authorized to operate in Japan, including the pullout of its operation from Ontario, Canada at the war of a crackdown on other crypto exchanges in the country.
It is rather apparent that different authorities around the world are coming stiffly on crypto-related services. In their worry, some of them opine that the digital currency could easily be used for money laundering and cover up criminal acts. In another quarter, there is a fear of multiple streams of risk im using advanced trading tools for cryptocurrency investment.
Amid these safety and credibility tests that Binance Coin has been subjected to, Binance says its regulatory responsibilities are taken seriously. On the heels of this regulatory concern, Binance is reportedly investing in compliance.
It is believed that the growth of Binance Coin would be hampered if other top crypto exchanges are licensed to operate where the Binance is not authorized. This is bound to give a heavy blow to Binance Coin in earning consumer confidence if there is an inability to send and withdraw that currency.
2. Binance Owns CoinMarketCap
It could be recalled that the popular cryptocurrency data site, CoinMarketCap, was bought by Binance in 2020, although the two companies have independent operations. Due to this acquisition, the crypto site that is used by millions of people can further bring Binance to the spotlight of retail investment in the crypto space.
3. Binance Coin Is More Than Trading Token
Belonging to the same family, Binance Coin can be used by Binance customers to cut trading fees while earning interest. This is also applicable to the Binance Smart Chain, which is a blockchain designed to work on smart contracts. The interesting thing about the smart contract is that tiny pieces of self-executing code can be easily stored on the blockchain.
It should be noted that Ethereum was the first cryptocurrency to launch smart contracts, the leadership it still retains in that regard. Even at this feat achieved by Ethereum, its network is always congested with high transaction fees. In a bid to topple this glitch encountered on Ethereum births an innovation from Binance which can be easily used by new investors on the Binance network.
4. Binance Coin Price Has Increased by 900% In Two Years
The price of Binance Coin has experienced inflation such that a Binance Coin being bought in 2019 is today going rallying over $100,000. This shows how fast and high its price has grown in the last two years. Yes, Binance, like a crypto exchange and programmed ecosystem jostles the crypto market with many competitors, but harnessing the two with a formidable team proposes a strong investment capability for Binance Coin.
5. Binance Does Not Have Headquarters
There are Binance offices across the globe with over 2,000 employees, but there is no physical structure that houses all these employees and their respective jobs. This idea is hinged on the company’s ethics that cryptocurrency should be borderless.
Nonetheless, Binance is a licensed business entity in the United States, a proposition the company presented to the U.K. government before the withdrawal of its application.
In all these, Binance is operating with the core principle of launching Bitcoin as a decentralized and open currency. But this principle might in a way be compromised if it wants to be accessible to crypto investors as it performs its functions.
As the cryptocurrency market continues to develop, leading crypto exchanges like Binance have room to grow and which in turn affects the value of Binance Coin. Binance has also promised to use 20% of its profits to buy Binance Coin into circulation until it reaches a total of 50%. This is expected to boost the price of BNB in years to come.