Binance coin (BNB) is probably the only coin that is making notable gains more than any other coin. Not even Bitcoin is coming anywhere close to BNB. Consequently, the price rally has attracted more investors to BNB. At the time of writing, BNB was exchanging hands at $35.42, a market capitalization of $5.0 billion, and a 24-hour volume of $495.7 million.
The current BNB price is a significant gain considering that the coin was trading at $9.41 on Jan 4, 2018. In exactly one year from today, BNB was exchanging hands are roughly $14. On January 3, 2019, the price of BNB stood at $6.05.
Don’t be attracted by the gains
While the appreciation curve for BNB may seem like the coin is heading towards higher gains capable of sending investors smiling to the bank, BNB may not be as rosy as it looks and adding it to your portfolio is a bad idea.
Concerns around BNB remain on whether its investors are dealing with a security, a utility, and or how to mark the token’s fair price. Unfortunately, its creators have often lured investors by promising a 25 percent discount when paying trading fees with BNB and the ability to spend the coin in stores. Additionally, although quite obvious but only meant to lure unsuspecting investors, Binance flaunts BNB as an altcoin with an ability to be stored in several wallets.
Binance also promises that BNB will become the native currency of Binance Chain, which will hold the Binance decentralized exchange (Binance DEX). The chain, according to its developers, will concentrate on trading and or transfer of blockchain based assets.
According to The Block:
“Even assuming the vague promises of the Binance Chain hold up to scrutiny, if all Binance really does today is provide holders with a small fee rebate, why does so many people hold it in eager anticipation? What do some investors misunderstand about it?”
What is 20% of Binance profits?
However, from the start, Binance has maintained quarterly burns to decrease the total of BNB in circulation with anticipation that this would drive its price up. During these burns, the exchange pledged to use 20 percent of its profits to buy back BNB. Unfortunately, BNB to be burnt will come from the exchange’s “own sizeable treasury.” Also, the ground is not leveled up since it’s hard to determine Binance’s 20 percent profit.
“While they focus on compliance, there is no reason to believe that token holders would be entitled to anything in the event of a shutdown or asset seizure.”
In October 2018, Binance burnt BNB worth roughly 17 million US dollar, but it didn’t have any effect on the price. Although BNB is moving fast in the price increase ladder, it is “no less useless than the majority of tokens” listed on the exchange.
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