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Learn Where & How to Buy Binance Coin (BNB) - A Beginner's Guide

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Binance Coin (BNB)
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Binance Coin (BNB) is the default currency of the Binance exchange, which is the largest global cryptocurrency exchange by market volume. The success of Binance is linked to the growth of the cryptocurrency market and the strides made in the last five years in the sector. Binance exchange has become a behemoth of some sorts with its many subsidiaries such as Binance Smart Chain, Binance Blockchain, Binance Launchpad, Binance US and Binance Jersey.

Binance cryptocurrency exchange is available in several countries around the world and this is supportive of BNB as a globally traded coin. BNB is used as a settlement currency within the Binance ecosystem and most traders use it as default payment for fees on Binance exchange. With BNB coming up with an array of uses, its attracting attention as a source of investment to global investors. Users can buy Binance Coin on many cryptocurrency exchanges either directly through fiat currencies such as the US dollar or through other cryptocurrencies. 

3 Things to Consider Before Buying Binance Coin

1

Future Potential

When you buy BNB, you are buying a stake in the Binance empire, which has several subsidiaries and runs profitably as an emerging business. While Binance’s dominance of the global cryptocurrency scene is evident, what many people might not be aware of is that the hodlers of BNB stand a chance to receive periodic distributions in the form of airdrops when new projects are hosted on Binance blockchain. This scenario solidifies the standing of BNB as a top 10 cryptocurrency that avails long term investors of passive income on a regular basis. The range of activities going on within Binance blockchain is quite enormous that if sustained, could lead to a continuous price ascendancy going into the future.

2

Supply/Availability

BNB has a supply cap of 176,406,561, and out of this, 144,406,561 are presently in circulation. With a fixed supply threshold, hodlers of the coin can be assured that there will be no unbridled dilution of value. So far, BNB coins are bought from the open market at intervals and burned using operational profits to reduce the amount in circulation to 100 million. The coin buy-back programme also has the potential to also prop up the coin valuation.

3

Loyal & Dedicated Community

Binance Coin has a community of loyalists, investors, developers and other stakeholders that are rooting for its success. Its R & D section is fully functional and well-incentivised to drive the success of the Binance flagship coin.

Our Tutorial to Buy Binance Coin in 5 Steps

When you ask investors in crypto how they first got involved in the trading scene, you will likely hear them mention brokers and exchanges. To help you learn how to buy BNB, we have outlined the following steps.

Step 1: Find an Appropriate Platform to Buy Binance Coin

To buy Binance cryptocurrency, you need to be sure about the platform that you plan to use. In determining appropriateness, it is important to consider if the platforms’ tools and layout are such that you can use. These days, it is easy to scan a crypto exchange and look up the features. While some platforms are designed for experienced traders, others are suitable for all classes of investors.

While the most prominent exchanges are Coinbase and Binance, both do not necessarily meet the needs of the same class of investors. A high-ticket investor will find out that Binance offers great savings on fees while Coinbase has none of such discounts. A retail buyer might have no issues with Coinbase since the quantum of purchases will be small. For investors in other parts of the world, Binance also rates high with its ease of use and low fees, and you can trade several of the leading cryptos on the platform including BNB. Brokers like Pepperstone and eToro are considered reliable when trading CFDs and futures. eToro also offers a fairly wide range of digital assets that its users can trade.

Step 2: Registration / Create a New Account

To use a crypto platform, you need to sign up. This will require that you provide an email address, choose a password and confirm your new account by clicking a link sent to your email address. Additionally, you will also need to provide a means of personal identification such as an international passport, a utility bill and in some cases, a credit card statement. While the requirements for most countries are similar, in the US, you will need to provide your SSIN in addition, to be able to authenticate your account. While some investors might want to go for unregulated exchanges with no KYC protocol, the risks associated with such platforms are also higher. A willingness to evade expected laws should leave investors wary of such trading platforms with accountability on the low or non-existent.

Step 3: Deposit Funds

To start trading BNB, you need to fund your new account. While some platforms allow you to make crypto deposits, others might require you to do a fiat deposit. The approach might differ depending on the platform you use and where you live. Most investors find it easier to make deposits using credit/debit cards, which in most cases are quickly processed. PayPal payments, bank deposits and wire transfers are other options that you can also explore.

Some platforms require that you make a $250 deposit before you can start trading. When you open an account with brokers like eToro, you must make a deposit of at least $50 to start trading. Exchanges like Binance have no lower limits and for convenience, you can trade as soon as your account is funded with at least $10.

Step 4: Start Trading or Buying Binance Coin

When you open a new account on an exchange, you will be able to use the free wallet provided for BNB. When you use a hardware wallet or some form of wallet outside an exchange, you will require a private key to operate it, and this serves a security safeguard. When you trade using a broker, you will have access to CFDs and Futures contracts. Some big brokers allow you to determine your trade using your personal preferences

On Binance and other leading exchanges, you can now access crypto loans, margin trading as well as futures among others. When trading crypto futures, you are dealing with standardised contract values which can be too high for the average trader as it also requires a minimum base payment. While CFDs are like futures, they accommodate smaller contract values and yield. On the other hand, margin trading in crypto is accessing the platform’s credit for trading. So, the margin here is the difference between the value of the investor’s trading capital and the total credit accessed on the trading platform.

While most exchanges do not support leveraged trading, the range of services accounts for the differences between brokers and exchanges. So, while you can use Bitmex and Binance for leveraged trading, you can also do the same on eToro. For example, on eToro, you need to know that there is no support for crypto withdrawals when cashing out.

Step 5: Optional Steps

In addition to the above, these optional steps can also enrich your trading experience.

  • BNB Staking

You can stake your BNB for some other crypto and get some payout at the end of the week or month. So, instead of just leaving your BNB coins idle in your wallet, you can stake it for prescribed cryptocurrencies and earn additional BNB in return.

  • Buy the dip

Investors in cryptocurrencies are told to buy low and sell high as a winning strategy. When prices dip, some investors will dump their coins and push prices further down. It is an opportunity to buy some more coins in the expectation that the prices will rise again for you to sell at a profit.

Available Payment Methods for Buying Binance Coin

On many cryptocurrency exchanges, it is easy to buy BNB using a variety of payment methods. However, whether you can use a payment option or not depends on its availability in your region and other possible geo-restrictions.

  • Buy Binance Coin with Cash

To buy BNB with cash is not possible in many places. While you can do so when you use a P2P platform like LocalBitcoins, it is not available in all countries.

  • Buy Binance Coin with Credit / Debit Card

Many marketplaces allow you to buy BNB with a credit card while others also support debit card payments. Using a credit/debit card is considered one of the safest ways to buy BNB and it is supported by Coinbase and Binance.

  • Buy Binance Coin with Bank Transfer

Bank transfers can be used to buy BNB on several platforms. While bank transfers are supported for local or national payments by some exchanges (with same-day completion of transactions) cross-border payments can take up to 2 days to complete.

  • Buy Binance Coin with Cryptocurrency

Buying BNB with cryptocurrency is the fastest means to acquire a digital asset and could also be the cheapest way to do so. Several exchanges support buying BNB with crypto.

  • Buy Binance Coin with PayPal

PayPal could be the cheapest way to buy cryptocurrency if you use platforms like eToro and Coinbase. Other platforms might charge a premium when accepting PayPal payments making it costlier to use this method.

What Are the Fees for Buying Binance Coin?

The fees charged by crypto exchanges are the major source of funding they have to rely on to keep their business afloat. While the fees charged look minute, when summed up from several customers, the platforms can operate profitably. For each cryptocurrency transaction, there are some fees involved. In this light, it is important to take note and plan your trading accordingly. 

One way to reduce your trading fees is to use an exchange with a low tariff structure like Binance. Fees charged on many exchanges encompass network fees, incurred for moving digital tokens between wallets (ie. from the seller to buyer) and transaction fees, which is associated with your deposit or funding method.

Expert Tip to Buy and Sell Binance Coin

A major tip for buying and selling BNB is to divorce your emotions from your daily trades and the market. Most successful traders recommend that emotional attachment to trades can lead investors to lose out in the long run. In the face of verifiable facts, it is better to follow tested pathways to profitability. Experts recommend that you take your profits as they arise. When you are trading crypto, it is also important that you start out small and build your portfolio as you understand the dynamics of Binance trading.

How to Find the Best Time to Buy Binance Coin

Binance Coin has seen price surges since it was launched at $0.09 in August 2017. It has peaked at $27 as of October 31, 2020. In the marketplace of cryptocurrencies, BNB has its own allure and has generally followed a pattern of rise and fall in price. BNB has shown that it has a potential for real growth, incentivising investors to buy and hold it for expected capital gains.

What you can do as an investor is to learn more about how BNB works. Check the market reports, read the financial pages and get insights from expert opinions. On social media, follow the accounts of leading traders or niche specialists. Every now and then, you find snippets on your timeline that can boost your profitability as you trade.

What Drives the Coin’s Price?

Binance coin price is driven by happenings in the cryptocurrency market as well as the larger economy. Pronouncements by leading economic figures nationally and globally can also affect the price of BNB. While positive sentiments like regulatory authorisation will lead to a price appreciation, any gloomy market overview can also dampen the market price. If at any time positivity looms in the horizon, more people will buy BNB, driving up the price in accordance with the laws of demand and supply.

Another important aspect is that BNB is burned periodically in order to take some of its digital assets out of circulation and boost its market value. While the process is not arbitrary, it is the total volume of BNB tokens traded in a quarter that is burned whenever a coin burn takes place. The goal is to ultimately reduce the BNB in circulation to 100,000,000. The burn function was built into the BNB contract code when it was written.

Investors may also look out for airdrops attached to BNB every now and then. The new tokens launched on Binance have a proportion reserved to incentivise the Binance ecosystem, and these get distributed based on the BNB in circulation.

As a recent fallout of the COVID-19 pandemic, the rise of DeFi has led to yield farming, which involves staking (or pledging) your tokens in order to earn a reward, akin to interest payment. For example, you can stake your USDT for BNB, and earn some BNB for the period of the stake.

How to Sell Binance Coin

While some global jurisdictions have Bitcoin ATMs that make it possible for sellers to make immediate sales and withdrawals, BNB ATMs are not yet available. However, with brokers and exchanges, BNB can be sold easily and converted to fiat if you so wish. On some exchanges, you can sell BNB for another crypto and withdraw to your preferred wallet. The availability of conversion functionality on exchanges like Binance makes it possible to quickly cash out using USDT or BTC or any other crypto of your preference. Quite unlike selling BNB tokens, a BNB CFD will not involve actual movement of the digital asset between wallets. It is when the contract period elapses that the investor can earn the expected profits or be charged for the shortfall in the expected ruling price.

Frequently Asked Questions

  1. Yes. BNB is used for transaction settlement on the Binance blockchain and Smart Chain. It is used for online shopping and fund transfer daily in different parts of the world.

  2. No. BNB is not classified as a security token by the US SEC and is therefore legally in use in the US and many parts of the world.

  3. Yes. Binance has developed its mainnet, which now hosts its coin. The blockchain is secured using the Byzantine Tolerance model, which is considered highly secured

  4. Yes. Binance Coin is still appreciating in value and as such, you can still trade it profitably.

  5. This depends on how much you trade with and how high the price can go at the time of trade.

  6. Yes. Crypto profits are taken as taxable profits in many countries.

  7. The projects hosted on Binance blockchain attract fees, which in turn help to drive the value of BNB. In a similar vein, with the number of users of Binance exchange growing, BNB ‘s value is also impacted positively.

  8. While outright assurances might look out of place, as long as the Binance exchange continues in operation and the other associated projects continue viably, BNB will likely continue to soar.

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