Investors guide to buying Binance Coin in the UK
The Binance Coin or BNB was originally conceived to be a type of discount coupon for the Binance crypto exchange, which continues to be the largest cryptocurrency exchange by volume across the globe. Discounts began at a hefty 50% discount in trading fees on the Binance platform but were cut in half with each passing year. As a limited purpose utility coin, BNB did not appear to have investment potential when compared with the likes of Bitcoin or Ethereum, but Changpeng Zhao (CZ), the ebullient CEO of Binance and respected spokesperson in the crypto industry, has always had larger plans for the use of BNB tokens within the Binance ecosystem.
While its discount utility has waned over time, CZ has created a host of other services within the Binance sphere of operations to create abundant demand for BNB ownership, causing the token price to rise astronomically as depicted in the chart below. Originally offered at $0.15 per coin in its 2017 ICO, it hovered about $10 and slightly above from 2018 through 2020. BNB has since commanded a price above $675. Its sudden price rise is attributed to a consistent 20% profit contribution from Binance to reduce supply, the initiation of a separate Binance Smart Chain (BSC), and the launching of Initial Exchange Offerings (IEO) from its platform. In all cases, BNB is the “gas” that runs this expanded service offering. BNB now ranks number three on crypto rankings and has a market cap of $96.5bn. CZ has another winner on his hands.
Where to buy Binance Coin
Why buy Binance Coin?
Binance Coin or BNB has been drawing a great deal of headline press of late in Crypto-land. Its price had hovered well below $40 for three years, but then in 2021, it has been literally shot out of a cannon. Its price at 2020 yearend was roughly $38 and by May 2021 had reached $625, an astonishing appreciation in so short a time period. Conceived as nothing more than a coupon coin to serve the patrons of the Binance exchange, BNB has catapulted to the forefront and amassed a market cap of $96.5bn and a position ranking of number three behind BTC and ETH.
Since BNB is tied to the hip of the Binance platform, it is best to start with it to understand its unique value proposition. Changpeng Zhao began his journey in Shanghai in 2005 by founding a high frequency trading systems company, eventually migrating to the blockchain space in 2013. He may have founded Binance in China, but he left when the People’s Republic clamped down on crypto trading and ICOs. His headquarters hopped between Taiwan and Japan, and now is in Malta. Binance is the leading cryptocurrency exchange in volume.
BNB’s ICO was modest in 2017. 100 million coins raised $15m. Another 100 million coins went to founders and partners, but its prospectus dictated that 20% of the profits of Binance would be used to buy back BNB tokens, a process called “burning”. The intent over time is to burn 100 million BNB, like stock buybacks in the corporate world. Scarcity would lead to higher prices, or so the plan implied.
Fee discounts were sizable, beginning at 50% in 2018 and dropping by one half each year thereafter. In late 2020, Binance launched its version of a decentralized app alternative to Ethereum, Binance Smart Chain (BSC). BNB began as just another ERC-20 token on the Ethereum platform, but it has now migrated to the BSC blockchain, where it is the coin that powers dApps, Initial Exchange Offerings, and a host of other services. There seems to be no limit to Zhao’s ability to create new uses for the BNB token on his global platform.
Is BNB right for you? If you are a believer in the ability of CZ Zhao to innovate and lead the Crypto-verse into its next generation of valued services, then BNB might be worth the bet. It is risky. No other utility coin has approached this niche, but beauty is in the eye of the investor.
Step by step guide
With a crypto ranking of third behind Bitcoin and Ethereum, Binance Coin or BNB is listed on nearly all exchanges, as well as on most online brokers that have entered the cryptocurrency space. For eToro.com, you can invest in BNB is just five simple steps:
Step 1: You will need an account on the eToro website. Press the “Join Now” button, and then answer the questions related to your personal identity and investment profile. Brokers are required to acquire this information by law.
Step 2: Application approval is quick. Your Desktop screen will appear. In order to buy BNB tokens, deposited funds must be in your Portfolio balance. Press “Deposit Funds” to review various payment methods.
Step 3: There may be payment methods that deal directly with your bank account or you may use a credit or debit card option, as depicted here. Decide on your amount of fiat currency, in this case British Pounds, and execute a transfer order.
Step 4: Once funds are posted to your Portfolio account, you may buy BNB. Tab the “Trade Markets” button. Select “Crypto” from the upper heading and scroll down to BNB.
Step 5: When you wish to buy BNB is your decision. Click “Buy”, and a market order will be displayed, as below. Enter your desired amount of cash, and then click “Open Trade”. The website platform will take if from there and do all the necessary accounting in the background. Your units of BNB, once purchased, will be shown in your Portfolio.
Concluding remarks
The BNB Binance Coin is unlike any other cryptocurrency in existence today. Its value is intrinsically tied to the success of the Binance cryptocurrency global exchange network, which happens to be the largest in the world and growing. The popularity of its founder and CEO, young CZ Zhao, is unmatched in the industry, and his drive for innovative ideas seems limitless. To date, he has been able to create his empire without much US and EU regulatory interference, but only because he has skirted those markets or offered very limited service that complies with local law.
Can the value of BNB tokens continue to rise in value? CZ has managed to tie the value of BNB coins to the overall profits of his enterprise in a very clever way that has escaped attacks from regulators for appearing like a dividend payment for stock ownership. He has also launched an amazing list of ancillary services on the Binance platform that require BNB for access and the payment of fees and rewards. If this consortium approach can keep adding value, then higher values for BNB are in the cards, but critics will always claim BNB is overvalued. It’s your call.
