How to Buy Binance Coin (BNB) in 3 Simple Steps

What Is Binance Coin?

Binance Coin (BNB) is the in-house utility token of Binance, one of the world’s largest centralised crypto exchanges where users can buy hundreds of the most popular coins. The coin was first built on the Ethereum blockchain until its switchover to the Binance Smart Chain (BSC) in 2020. 

Like the Ethereum blockchain, BSC is an ecosystem that powers a variety of decentralised applications (dApps) and smart contracts. But, one of the key differences here is that BSC does so without the high transaction fees and low transaction speeds the Ethereum network has often been criticised for. BSC’s low fees are paid in BNB.

In terms of daily users and trading volumes, exchanges like Coinbase, FTX, and KuCoin are some of Binance’s closest competitors in the space –– many of which tout their own native cryptocurrencies. 

However, Binance Coin is particularly appealing for investors because it can be staked or “loaned out” for some of the most incentivising interest rates in the crypto space. Staking is part and parcel of blockchains like BSC that use the Proof of Stake (PoS) model. This allows users to enhance the security of a blockchain by lending out their tokens in return for rewards.

Ways to Invest in Binance Coin

Investing in Binance Coin ultimately boils down to your financial position today and your financial targets for the future. Some investors will choose to buy Binance Coin for short periods in the hope that they may welcome quick profits. Meanwhile, others will opt to invest in Binance Coin for the long term with a view to seeing the value of their investment increase over time. 

Buy and hold Binance Coin

The easiest and most reliable strategy among Binance Coin investors is to hold onto or “HODL” (Hold on for Dear Life) their coins for long periods of time. 

While this method can potentially be less profitable than actively trading Binance Coin on the open market, it requires a relatively low level of numerical competency and dedication. It also provides the opportunity for staking while you HODL.

Best Binance Coin wallets

Binance Coin investors can either choose to store their BNB on centralised exchanges or self-custody their coins by storing them in private, decentralised wallets. Private wallets can be software wallets such as the Binance Chain Wallet that supports tokens built on the Binance blockchain such as BNB, or hardware (or “cold”) wallets like Trezor, BitBox, and Ledger. 

Storing your Binance Coin in private wallets is often considered the safest way of keeping your crypto safe because only you have the “keys” to access it, unlike web wallets found on centralised exchanges that could be susceptible to cyber attacks. 

Trade Binance Coin

A number of investors look to capitalise on the volatility of Binance Coin’s price by trading it on exchanges. This strategy comes with the possibility of producing large profits by using financial instruments such as leveraging or options trading. But it can also lead to heavy losses for traders given the unpredictability of Binance Coin’s daily price.

Successful traders usually find it easier to keep their coins in web wallets because regularly transferring coins from software or hardware wallets to exchanges for trading can be an arduous and time-consuming task.

Should I Buy Binance Coin Now?

Before buying Binance Coin, it is worth remembering that you should do your own research on the fundamentals, ecosystem, and trajectory of BNB. While this investment could provide eye-catching returns, it could also lead to partial losses in the short term.

In recent times, Binance exchange has faced regulatory pressure from various financial authorities but has responded to these censures with a willingness to meet regulatory benchmarks and even gained operational approval in jurisdictions such as Canada and Bahrain. 

So far, BNB price has been mostly unfazed by these developments, possibly because of its supply and demand dynamics. The maximum supply of BNB is already in circulation and Binance Coin is constantly being removed or “burnt” from the network in order to raise the value of BNB. These supply crunches can act as a counterweight against any unforeseen shocks to the wider crypto market that may deflate the price of the coin. 

Perhaps, more importantly, this process also allows Binance Coin to compete with blockchain rivals like Ethereum, Solana, and Terra that engage in similar token-burning methods as the multi-trillion-dollar crypto industry continues to thrive.