Determining the perfect coins for your crypto portfolio can feel like a challenge. Is learning how to buy BNB a good way to maximize returns on your investments?
In this article, we take you through exactly what BNB is, its benefits and disadvantages, and how to buy it so you can discover new ways to expand your portfolio and build your wealth.
What Is BNB?
Despite the shared acronyms, we’re not talking about bed-and-breakfasts today. BNB, otherwise known as Binance Coin, is the cryptocurrency native to one of the largest crypto exchanges, Binance.
Binance was founded in 2017 by a Chinese-Canadian businessman named Changpeng Zhao. One of the initial purposes of its token was to help reduce transaction fees on Binance so it could be a more convenient option for traders.
Since its founding, BNB has gone through three notable market cycles. These cycles are:
- The First Market Cycle (2017): BNB was introduced at .50 USD, only to increase to $25 within its first three months.
- The Second Market Cycle (2019): BNB reached a value of nearly $40
- The Third Market Cycle (today): BNB reached over $400 with a market capitalization of over $60 billion
So, what is it about BNB that has led to it becoming so popular? Let’s take a look at the benefits and disadvantages of this cryptocurrency to find out.
Benefits Of BNB
Versatile
Although BNB was originally used as a utility token for early Binance investors to claim discounts, today it can be used for a variety of purposes.
Along with being a great store of value, you can also buy goods with BNB, use it to borrow a crypto loan, and benefit from it in over 100 other ways.
Binance Coin also fuels the Binance Smart Chain, a smart contract-enabled blockchain network founded in 2020.
Eco-Friendly
Speaking of the Smart Chain, BNB’s competition to Ethereum utilizes a Proof of Stake (PoS) system to validate transactions. This is in contrast to the crypto mining process, which requires a constant source of energy to run.
Because of this, BNB is an energy-efficient, eco-friendly option compared to other assets.
Deflationary
Some cryptocurrencies have a limited supply, meaning that they deflate over time. This is opposite to an inflationary currency, like USD, where new bills are printed without a considerable cap.
Since BNB is destroyed every quarter to manage its limited supply of 100 million, it is a deflationary currency. This makes it a more viable investment option for long-term holders since the value will rise as long as the demand grows or remains consistent.
Lucrative
With all of these elements together, it’s no wonder why BNB proves to be a profitable investment. Similar to Bitcoin, BNB regularly experiences spikes of 30%.
In the past two years alone, this crypto is up 900%, marking it as one of the biggest options on the market.
Disadvantages Of BNB
Centralized
Despite Binance Coin being one of the most popular cryptocurrencies today, many crypto owners see a disconnect between Binance and a main objective of many other cryptocurrencies: simply put, Binance is a centralized finance (CeFi) business in DeFi territory.
First and foremost, Binance is a privately held company. As a result, BNB is centralized through the company’s control over the particular crypto. This strays from an overall goal of decentralization and a public blockchain and means Binance largely controls its network.
This private status brings up further concern that Binance could manipulate its blockchain behind closed doors.
Volatile
Since BNB is a lucrative investment option, it’s worth noting that there are risks associated with this advantage.
For traders interested in short-term returns, BNB can be a dangerous asset. As rapidly as it may increase in value, it can also plummet just the same. While this is typically fine for long-term investors, it’s a risky move for day traders.
Regulatory Challenges
Regarding Binance itself, there are regulatory concerns surrounding its operation. In places such as Japan, Germany, the United Kingdom, and more, regulators are beginning to crack down on its business practices and where it is legally allowed to operate.
Moving forward, this poses challenges for the future of Binance as a company since some countries have already banned it as a crypto exchange.
Still, BNB today is a profitable option to have in your crypto portfolio. If you decide that it’s a worthwhile addition, you’ll need to know how to purchase Binance Coin, so let’s take a look.
How To Buy BNB
1) Find The Best Crypto Exchange
It’s important to choose a well-established crypto exchange. These platforms provide all of the resources you need to buy, sell, trade, invest, and more.
Choosing the right exchange will determine whether your crypto experience is positive or not, but finding this best option is easy when you know what to look for.
An ideal exchange should have:
- Multiple earning options, such as fixed deposits and trading
- Competitive interest rates for earning and borrowing
- An arsenal of security features
- An extensive list of tokens to choose from
- A verifiable list of venture-capital partners
- No hidden or outrageous fees
- Excellent customer service
- Compounded interest and weekly payouts
These are just a few basic features that ensure you’re partnering with a trustworthy, customer-centric platform. On top of all this, it’s important to verify that the exchange does, in fact, offer BNB as an option.
2) Create An Account
After you’ve found the best exchange, the next step is to create your account. In most cases, this is as easy as providing basic information, such as a username, email, password, and a form of identification to verify your identity.
3) Deposit Funds
Depending on your preferences and the exchange you’ve partnered with, you’ll have a few options on how to purchase your BNB. These might range from credit and debit cards to bank accounts and other intermediaries.
4) Search For BNB
Next, you’ll want to locate BNB on the platform to check its rate before you buy.
At Vauld, for example, learning information about a token is as easy as clicking on our Rates tab to find the asset in the search bar. As of the writing of this article, BNB currently has a savings rate of 0.50% and a fixed deposit rate of 1.00%.
Finally, all that’s left to do is make your purchase. If you’ve chosen a customer-focused crypto exchange, you’ll earn as soon as you make your first deposit, gaining access to multiple earning opportunities.
Aside from these basic steps, is there anything else to know before buying Binance Coin? Continue reading for some final tips on how to buy BNB from our experts at Vauld.
How To Buy BNB: Expert Tips
Research Before You Buy
The good news is that you’ve already started one of the most important factors of purchasing any crypto: doing your research.
Despite the popularity that grows around certain coins, not every token is a good choice for every investor. Ask yourself why you’re interested in adding this specific asset to your portfolio and what the pros and cons are of doing so.
Develop Your Strategy
If you’ve determined that BNB is a good investment for you, then you’ll need to figure out how much you’ll actually purchase. Although a new opportunity can feel profitable enough to spend as much as you can, developing a strategy will mitigate your risk.
The rule of thumb is to never buy more than you can afford to lose. Part of your strategy might also be figuring out which other assets to pair with BNB. Since it is a volatile option, it can help to pair it with a less volatile choice, such as Dai or another stablecoin.
Save On Fees
Here we come full circle. Since BNB was originally made to save traders on fees, it almost feels counterintuitive to partner with an exchange that will charge you an unprecedented fee for every purchase, trade, deposit, and so on.
Some fees may be unavoidable depending on your crypto activity, but these should always be minimal and easy to find.
For example, maker and taker fees for filling and placing orders are necessary. At Vauld, these fees currently fall around 0.1% across the board so you can grow your investment instead of worrying about how much you’ll lose in fees.
Also, keep an eye out for exchanges that charge fees for certain types of crypto deposits. We do not have any withdrawal limits or deposit maximum limits, and our deposit minimum is only $1 worth of tokens.
Store Your Crypto Safely
Knowing how to buy BNB is just the start. After you’ve researched the risks and benefits of Binance Coin — such as its volatility, versatility, and regulatory challenges — you’ll need a safe place to store the newest addition to your portfolio.
As Binance itself continues to face obstacles today, choosing an exchange that offers the essentials and a wide range of features makes the future’s uncertainty much easier to manage.
Ready to make sure your investment works for you? Sign up with Vauld today and learn the difference that the right crypto exchange can make.
