BNB, originally known as Binance Coin and later rebranded into ‘Build and Build’ or simply BNB, is arguably one of the strongest and most successful cryptos available, having the 5th largest market capitalization among all cryptocurrencies. The token was launched in 2017 through an Initial Coin Offering (ICO), and since then, the BNB price has experienced significant appreciation, reaching a value of $793.35 at its highest. As a result, the crypto has caught the attention of many traders and investors over the years and continues to be one of the most talked-about digital currencies in existence.
However, one should never base their investment decisions on the popularity of an asset alone. Learning essential information about a coin’s background, core structure, purpose, and growth potential is always required before deciding if it makes a good addition to your portfolio. This knowledge is crucial for protecting yourself against the risk of losses and increasing your chances of making a profitable investment.
Concept
BNB’s emergence is tied to that of Binance, serving as the native token of what is now the largest cryptocurrency exchange in the world by trading volume. Changpeng Zhao, the co-founder and former CEO of Binance, created BNB with the aim of raising funds to support the development of the Binance platform and launched it 11 days before the exchange went live. The ICO raised a total of $15 million during the first week, most of which was directed towards technical upgrades and marketing.
In the beginning, BNB functioned as an ERC-20 token built on the Ethereum blockchain and was designed to facilitate transactions on the exchange, being used to pay for gas fees and earn trading fee discounts.
Structure-wise, BNB has a maximum supply of 200 million tokens, half of which were issued during the ICO, and uses a Proof of Stake (PoS) consensus mechanism for issuance. BNB also employs two burning mechanisms, which gradually reduce the total supply by burning a portion of the BNB spent as gas fees and destroying a certain amount of tokens every three months.
In 2019, Binance launched its proprietary blockchain named the Binance Chain (now referred to as the BNB Beacon Chain) and transitioned all of its BNB tokens to their mainnet. One year later, Binance released the Binance Smart Chain (the current BNB Smart Chain), adding smart contract functionality and decentralized applications (dApps) to their host of services.
Applications
Much more than just a cog in the wheel, BNB is a key component in the system as it fuels the entire Binance machine. With the development of the BNB Beacon Chain and BNB Smart Chain, the BNB token has expanded its use cases within the Binance ecosystem, performing several functions on both chains. As such, apart from paying for transactions fees, BNB can also be sued for:
- participating in token sales on Binance Launchpad and gaining access to new crypto projects
- supporting smart contracts and DeFi initiatives
- payments on NFT marketplaces
- staking, allowing users to earn rewards and participate in network governance
- global payments, being accepted by various merchants around the world
Price History
Like all other cryptos, BNB has undergone notable price fluctuations since its inception. At the time of its release in 2017, the token was worth approximately $0.10. However, its price appreciated rapidly, closing the year at around $8.
2018 was a challenging year for the cryptocurrency market, which saw most coins decline in value. During this period, BNB’s price stayed within the $5 to $15 range. Things took a turn for the better the following year when BNB reached an all-time high of $39, but price corrections caused the asset to finish the year at $13. 2020 didn’t bring any major changes for Binance’s native token other than a steady increase to $37.
2021 was the year when the BNB price finally exploded to a new record high of over $690. For the next two years, market corrections would keep BNB fluctuating between $200 and $400. Finally, in December 2024, BNB broke out of the resistance range to establish its latest peak at $793.35. Since then, the asset went on a slight declining trend and is currently trading at $649.
Investment Prospects
BNB’s price evolution demonstrates the token’s resilience and growth potential. The coin has been around for a relatively long period of time, judging by crypto standards. It was able to withstand many ups and downs in the crypto market and recover after each setback.
However, BNB’s past performance doesn’t offer any guarantees of future price appreciation. When assessing a crypto’s viability as an investment, one should focus on the characteristics that could ensure its strength and lead to long-term gains.
In BNB’s case, there are two main factors that highlight its investment potential. The first is represented by the Token’s association with the Binance exchange. BNB is backed by one of the most established and strong entities in the crypto space, which continues to invest heavily in the development of its ecosystem and its native token implicitly. The constant system upgrades and the integration of innovative features are bound to make the Binance network and BNB stronger. Therefore, as long as the Binance company thrives, so will BNB.
The second factor has to do with BNB’s utility. The token has real-world applicability as it boasts a wide and diverse range of use cases across the Binance environment and beyond. This could drive further adoption and increase demand for BNB.
Nevertheless, one should not ignore the potential drawbacks of investing in the BNB coin. Critics argue that BNB’s ties with the Binance exchange could lead to increased centralization, which might impair its development and cause many inconveniences for users, such as higher fees and scalability issues. Also, as all other coins, BNB is subject to market volatility, and can rise or drop in price unexpectedly, ruining investors’ plans and strategies.
Ultimately, BNB is definitely a crypto to keep your eyes on, even if it’s just for expanding your crypto literacy.