Table of Contents:
- What exactly is BNB?
- How much does BNB contribute to crypto?
- BNB: A good investment?
- BNB/INR on CoinDCX
- Supporting Binance
- BNB: Investment Report
- Final Verdict & Conclusion:
Before we begin explaining this seemingly counter-intuitive listing, a basic understanding of this addition to our token offering is quite necessary. Binance Coin, or BNB, while highly regarded as a quickly growing cryptocurrency is still often under-appreciated. No one seems to fully comprehend the value additions it brings to the ecosystem. We hope this article changes that outlook.
What exactly is Binance Coin?
Binance, now the world’s leading cryptocurrency exchange; was, in Early 2017, conceptualizing and preparing for a world where cryptocurrencies were as widely used at state-backed monies. Changpeng Zhao, CEO of Binance, hoped to see this revolutionary technology adopted widely, and with this – he birthed Binance.
As the Binance ecosystem grew, it became apparent with almost their entire project line that a native utility token was the next step for this crypto-pioneer. With the original intention of supporting mostly Binancians, the usability of BNB grew rapidly after it’s introduction and saw it used across a vast network of Binance’s partners, now boasting almost 50 use cases.
Binance Coin is Binance’s native token and is expected to fuel the operations of the Binance exchange and its ecosystem.
How much does Binance (and BNB) even contribute to crypto?
Binance, in just 18 short months is now the world’s premier destination for trading cryptocurrencies, with a daily trading volume of near 666 Million USD and offering the ability to trade in 400+ markets.
BNB, most popularly, is used to pay trading fees on Binance. With its daily volumes, it’s no surprise BNB is in high demand and has lead to it reaching #10 (based on market-cap) on CoinMarketCap.
It goes without saying that Binance is the one exchange that, both due to its ever-increasing threshold for innovation and fan-following, seems untouchable – as long as cryptocurrencies are. And if Binance is in high demand, it seems obvious that so is BNB.
While the cryptocurrency community would survive without Binance, it would almost definitely not have made the strides it is proud to have made today. Binance has pioneered the cryptocurrency space, and its innovations prove it will do so in the future as well. Future uses of BNB are discussed ahead, but, with the flexibility cryptocurrencies permit – who knows where BNB might be used next.
Well, is BNB even a good investment?
As far as BNB’s investment potential is concerned, this way of thinking demands a very long-term approach. And such long term agendas are exactly what Binance has planned and made public – giving it the valuation it has today.
Listed below are a few of their keystone projects that will incorporate BNB.
2) BNB will serve as Gas on Binance’s upcoming DEX.
3) Currently paying trading fees in BNB will give you a 25% discount only on Binance (however, this is set to change, read more on the same ahead)
4) BNB Buybacks will see reductions in circulating supply, essentially, driving value up.
Ahead in this article, we will discuss the exact factors that determine if someone should invest in BNB. However, it must be understood that being the native token of the Binance platform, BNB will most likely be incorporated with whatever long-term project Binance takes on.
Now, with a basic understanding of BNB, it might seem rather unintelligible that another exchange is listing Binance’s native token. However, this is not the case.
Why is CoinDCX listing BNB in the INR Market?
BNB is an industry-leading utility token, its high ranking makes it a highly-demanded token to newcomers in the cryptocurrency space – especially by those in the Indian subcontinent.
By introducing BNB as a tradable pair with INR, we further our vision of increasing cryptocurrency inclusion in India. Not only does a BNB/INR pair make it more accessible to those trading out of the Indian Subcontinent, it also brings liquidity from this emerging economy directly to the Binance Coin market.
In support of Binance:
We recognize Binance as the world’s premier cryptocurrency exchange and acknowledge the immense value they bring to the cryptocurrency ecosystem. With the pivotal role Binance plays, their native token- BNB, also holds a critical place in this growing ecosystem.
By listing BNB on CoinDCX’s INR Markets, we seek to bring a crucial aspect of the world’s biggest exchange directly to all our Indian users.
This listing will also allow holders and traders of BNB to directly convert their BNB to INR, or even buy more – directly with a stable fiat. This will not only add liquidity to CoinDCX’s INR Marketplace but more importantly, will bring greater volumes to all those trading in BNB.
So, how do you decide if BNB is the right investment for you?
Now, while we have pushed the “BNB Agenda” quite a lot – the assets’ intrinsic investment value itself, much like any other investment, will differ from person to person.
The writings below seeks purely to analyze and report BNB’s investment report and investment value – this is not meant to be taken as financial advice.
BlockNovum is a Swiss financial services provider that offers professional investment research, market screening, analysis and valuations of Blockchain startups and crypto-assets. Their October 2018 investment report on Binance Coin, along with other information has been used in the analysis provided below.
BNB: Price and Longevity Analysis
As of press time on the 30th of January 2019, the price of 1 BNB stands at a low of INR 436. Exactly one year ago, on the 30th of January 2018, 1 BNB would cost you around INR 894. Now, having more than halved in the last year, it goes without saying – Why should anyone believe in the long-term prospects for Binance Coin?
According to BlockNovum, the Present Value (PV) of BNB is 88% based on current utility and 12% based on future utility. Now, if this PV calculus holds true even 10 years into the future, it is only bound to increase as the usability of Binance increases. As more people trade on and use the Binance ecosystem, the demand and value of the BNB will inflate.
However the Value Calculus for BNB is, in fact, set to change. Before explaining this, there are a few KPIs every holder of BNB must know.
1) Currently, the trading fee discount availed by holders of BNB is 25%. However, this is set to halve every year. Y5 will see BNB avail no discounted fee for holders.
2) Every quarter, Binance uses 20% of its profits to buyback and burn BNB. This will continue till the supply of BNB left in circulation is just 100 Million.
The above are just some reasons the value calculus for BNB will change. As the 5 year discount period ends, it will dimish the current utility for BNB. However, this will be replaced by some more long-term uses for the Binance Coin ( Which will then become Current Utility).
1) Simple Capital Gain Investments
2) Gas on the upcoming Binance DEX.
3) Voting Power
4) Referral Bonus
As the Binance Ecosystem grows, the Value Calculus for BNB will change to a more stable one, prioritizing current utility even more. The diverse use-cases for BNB will also see it reach a more stable valuation.
It must be noted that a majority of future use for BNB will be simple investments and Gas on the DEX. These two uses will, for the most part, dictate the price of the BNB. Unfortunately, an over-reliance on these two factors, due to their connection to general market trends, will still see BNB very closely correlated to the overall volatility of the market.
Concluding BNB Investments:
With many more variables you can find here, BlockNovum gives BNB a rating of 7.6/10 and a 5Y value of INR 1261. According to BlockNovum, investing in BNB now will bring you a 190% increase in capital in 5 years.
Final Verdict: Today, BNB is grossly undervalued.
If you’re in for the long run and don’t mind the occasional micro-crashes in the market (and, like discussed, micro-crashes in the price of BNB) this investment, and using our INR orderbook to trade BNB could be for you.
With all the additions we make to our INR markets, our primary goal has always been to make the top-rated cryptocurrencies easily available to all Indians. BNB is no different, at #10, it is in high demand, especially amongst those just entering the crypto-sphere.
Along with serving the needs of our user-base, INR inputs to the BNB market will bring high liquidities to all those trading in BNB. We truly believe making this addition to our INR orderbook will bring immense value to the Indian Crypto-community – most notably to those looking to Long and hold BNB.
We hope this report on BNB and why CoinDCX is adding BNB to our INR market has been an informative one, and we hope to have effectively communicated our reasons behind this listing, and our broader vision for crypto-inclusion in India.
It must also be noted that at the time of publication, the authors do not hold any amounts of BNB. This report is not to be taken as financial advise, and each reader should do their own Due Diligence before investing in any digital asset.