What is Binance Coin (BNB)?
Binance Coin (BNB) is the in-house cryptocurrency of the Binance trading platform. This has long been by far the largest trading exchange for cryptocurrencies. On Binance, BNB is used for trading and payments. Binance's gargantuan expansion has resulted in BNB becoming one of the largest cryptocurrencies on the market.
Binance Coin was founded in 2017 as an ERC-20 token. Since 2019, the Binance Chain has served as the basis for the BNB. Additionally, Binance initiated Binance Smart Chain along with Binance Chain to easily integrate smart contracts. This year the BNB Chain was launched. Binance's native token is BNB. It acts as a utility token on the platform, allowing users to buy, trade and communicate with it. When trading cryptocurrencies, using BNB reduces transaction fees.
How has BNB performed lately?
Despite the onslaught of the crypto market, BNB was able to hold its ground and the 6-month study shows that it didn't do much damage. While Bitcoin and Ethereum are well below their all-time highs, Binance Coin is down at least 50%.
Binance Coin (BNB) has suffered major losses over the past few months due to the bear market. In the May of the 2021 bull market, BNB was able to hit an all-time high of $690. In November of last year, BNB was able to reach similar highs of over $650. Nevertheless, the bear market set in in November and prices fell drastically. At the time of writing, BNB is trading at $296.77.
At the beginning of the year, BNB was worth just $527. January saw further significant losses before the BNB price was able to recover in the following months. Yet another major clash occurred in May 2022. In mid-June, BNB hit a low of $197. In the weeks that followed, the price normalized again. At the beginning of October, the BNB rate was $282. However, shortly after the FTX scandal, investors seemed pessimistic and user interest in buying tokens seemed to have waned.
But bearish market situations aside, the BNB chain has an increasing engaged community of about 1.27 million daily active addresses. This surge makes it the most engaged blockchain.
When users use BNB on the platform, Binance pays out a large portion of the transaction fees. The BNB has become an incredibly important part of the platform over the past few years. As Binance continues to expand and the number of users increases, the demand for Binance Coin also increases, increasing the price and prediction.
Binance ensures that the BNB inventory is regularly reduced as prices rise. Every three months, a certain portion of BNB is wiped out, making Binance Coin deflationary and improving BNB future prognosis.
BNB specs have consistently performed quite well compared to the rest of the market. Nonetheless, it has seen a decline recently and is now trading below $300.
While this number is higher than normal, it is not entirely surprising given the current situation. Market participants had pinned their hopes on the BNB currency due to the possibility that Binance would buy out one of its direct competitors, but that chance was dashed when the plan fell through.
BNB could continue to rise over the next two years. With the largest cryptocurrency trading platform behind it, the token should be able to continue to rise, especially in bull markets. Increasing demand as the platform grows and reduced supply as a result of regular burning are perfect circumstances for a long-term price increase.
After a new Bitcoin halving, a new bull market is indeed very likely. This will most likely take place in 2024. BNB should rise sharply again in the next bull market. During the earlier bear market, BNB fell as low as $10 before rallying to an all-time high near $700. That was an increase by a factor of 70. It is very likely that this factor will decrease in the next bull market, as has happened with other coins. A factor of 20 seems feasible. Binance Coin could sustain a rally to $3000 if we see a $150 drop in the existing bear market, making the 2025 forecast extremely bullish.
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