BNB/USD Technical Analysis
About Binance Coin (BNB)
Binance Coin (BNB) is a digital currency created by Binance - the world's largest cryptocurrency exchange, to be used for trading and paying fees on the exchange. Conducting transactions on the Binance exchange using BNB tokens gives users a discount on transaction fees, and can also be used to trade other cryptocurrencies or fiat currencies on the exchange.
In February 2021, the Binance token BNB rate experienced considerable volatility, soaring from under $50 at the beginning of the month and crossing the $250 level in less than three weeks. On the basis of market cap, BNB has crossed USD Tether to become the third largest cryptocurrency in the world.
BNB has benefited immensely from the rally in cryptocurrencies which sent Bitcoin towards record highs. The Binance Coin rate increases on the basis of increased activity on the Binance exchange, and the rising volatility in cryptocurrencies has spurred trading activity on the exchange, driving the BNB rate higher as a result.
Binance Coin is a derivative cryptocurrency which was pre-mined in the form of 200 million tokens at launch. Initially launched as an ERC-20 token on the Ethereum blockchain, BNB tokens moved into their own blockchain in April 2019 - Binance Chain, via a phased transition to avoid disruption of operations.
The cryptocurrency exchange Binance also uses BNB tokens to support a cryptocurrency incubator, Binance Launchpad, where upcoming blockchain projects can conduct ICOs and raise funds. While BNB's main purpose is to be used to pay for transactions within the Binance exchange, with discounts to incentivize its adoption, it can also be used like other cryptocurrencies to purchase goods and services online via payment merchants.
BNB tokens can also be used to make payments towards Binance's charity initiative, the Blockchain Charity Foundation. Through this initiative, Binance aims to raise funds for social causes using blockchain technology, letting users donate directly towards causes and even individuals, instead of wasting money on administration.BNB Price Prediction
Binance Coin History
Binance Coin was first issued and launched in 2017 during an ICO, putting up 50% of all tokens - 100 million, for sale to the general public while the founding team held on to 40% of the tokens and gave 10% to angel investors. The ICO was successful in ensuring the sale of all 100 million tokens, helping its team of founders raise $15 million in the form of Bitcoin and Ethereum.
Since then, its team has used the money raised to upgrade and develop the Binance exchange, embark on branding and marketing efforts as well as educating new innovators. The Binance exchange uses 20% of its profits to buy back and destroy BNB every quarter to control its supply and increase the BNB price periodically.
As of February 2021, the latest quarterly burn happened during Q4 2020 successfully destroyed 3,619,888 BNB tokens, taking down the total supply of Binance Coin to 170,532,825 BNB. Since then, its team has decided to accelerate the rate of burn; however, the pace could change in the future based on fluctuations in the Binance Coin price, market conditions, and other issues.Binance Price Chart History
Binance Price Factors
Unlike most other cryptocurrencies, the BNB price changes whenever there is increased activity in the overall crypto market and in the number of transactions taking place on the Binance exchange. Binance Coin can be considered a facilitator for ramping users into other cryptocurrencies - as the number of cryptocurrencies that can be exchanged for BNB rises, the Binance Coin rate continues to grow.
The Binance Coin price also depends on the burn rate set by the Binance team. A higher burn rate reduces the number of available BNB tokens at a faster pace, creating a more severe shortage of supply, thereby further increasing its value. A slower burn rate eases the value of BNB tokens. The team behind BNB periodically adjusts the burn rate on the basis of overall activity and interest in trading cryptocurrencies and other market conditions that influence the BNB rate.
In addition, Binance's ICO platform - Binance Launchpad, also drives fluctuations in the Binance coin price. When more blockchain projects launch their ICOs on the platform, the interest goes up, the BNB price rises higher.
Trading Binance Coin
Unlike most cryptocurrencies, BNB can only be exchanged against other cryptocurrencies and cannot be traded for fiat currencies. An overwhelming majority of the trading volume of Binance Coin takes place in the form of BNB/USDT and BNB/BTC. Other popular cryptocurrencies BNB is traded against include ETH, XRP and TRX.
Trading Binance Coin (BNB) requires expertise and knowledge about the overall cryptocurrency market and all the latest developments related to the Binance exchange as well. As discussed above, whenever the Binance team releases new cryptocurrency products and services, it affects the BNB rate and drives volatility in the market - making it an exciting time to place trades in this crypto token.
Keep yourself updated about all the latest developments related to the overall cryptocurrency market, especially related to Bitcoin - the most popularly traded crypto on Binance. These developments are likely to dictate trends in the Binance Coin rate and can be considered as important fundamental drivers to note when trading BNB.Binance News
BNB/USD - FAQs
Binance coin is the digital token issued by the world's largest cryptocurrency exchange Binance, which can be used to trade cryptocurrencies and pay transaction fees on the exchange. Binance offers users a discount for transacting using BNB tokens, increasing the attractiveness of BNB.
You can buy BNB tokens by creating an account on Binance and exchanging your capital in the form of any cryptocurrency to purchase a corresponding value of BNB tokens. Since Binance does not accept payment in fiat currencies, you can only purchase or trade BNB using other cryptocurrencies on the Binance exchange.
You can store BNB coins in your account on the Binance exchange or move them to a digital wallet. Binance's official wallet is the Binance Chain Wallet, which is integrated with the exchange. You can also use other digital wallets that support BNB tokens for secure storage.
While BNB was initially launched as a form of payment within the Binance exchange, its rising popularity has led to it being accepted as a payment method by several businesses and merchants worldwide. You can use Binance Coin to make hotel bookings, buy music, games, purchase online services, and even take out loans. For more information on how to use BNB, please click here.
Cryptocurrency transactions are legal in most countries around the world, where you can buy Binance Coin with complete security. However, in some countries, including Algeria, Bangladesh, Bolivia, Ecuador, Nepal and Macedonia, it is considered illegal to buy and sell Binance Coin and other cryptocurrencies.
The UK is yet to regulate cryptocurrencies, including Binance Coin, although it does permit the buying and selling of digital currencies. However, it does not recognize BNB and other cryptos as legal tender, and has recently imposed a ban on the sale of crypto derivatives due to highly volatile and unpredictable nature of the market.
While most cryptocurrencies are based on a decentralized model, Binance Coin is a completely centralized token created by cryptocurrency exchange Binance as a form of generating more profits, and does not have the same amount of recognition or acceptance outside of the exchange. As a pre-mined token that is majorly owned by Binance, it is more vulnerable to speculation and higher downside risks than most other cryptocurrencies. In addition, since it is owned by a private company, BNB tokens could potentially be subject to security laws in the US.