After retesting the $60k mark, Bitcoin has retraced and lost over $3000 in just a few hours. The retracement has seen the entire market lose over $80 billion. This points to a market that is still highly volatile despite the growing adoption of cryptocurrencies by institutional players.
For new players just getting into the market, it presents risks. One needs research on cryptos that have some underlying fundamentals that can withstand a significant drawdown in the event of a downturn.
There are many such cryptocurrencies, but one of the most outstanding of them is the Binance coin (BNB). Several factors support Binance coin as a solid cryptocurrency, with the potential to steadily increase in value in the long run. Some of them are as below:
- It is the power behind the Binance exchange
Binance exchange is one of the largest and most reputable exchanges globally, and BNB powers it. It is the one that is used to pay fees on the Binance exchange, among other activities on the exchange. This gives it value, over and above the speculative aspect of it. In essence, as long as the market keeps growing, Binance coin stands a good chance to increase in value in the long run. It is also likely to hold its value better in times of market downturns.
- The coin burns
Since its launch three years ago, Binance has been doing coin burns and aims to burn at least half of the coins in circulation eventually. Binance recently announced that it had burned 3,619,888 BNB in December. The exchange has also stated that it had plans to accelerate the coin burn. It stated that the seemingly slow rate burn was driven by the rapid rise of Binance coin since it did the ICO. BNB has risen by 43,000% since it started trading, and this has hampered the rate of burn.
The exchange has further stated that it needs to accelerate the burn because if it continues at the current rate, it will take 27-years for the burn to be completed. So far, it has only burned 13% of the total supply. Binance hopes to finish the coin burn in 5 to 8 years by accelerating the coin burn process. However, this will be pegged on multiple factors such as market conditions and the volatility of BNB. Whatever the duration it takes to burn the 100 million BNB, it will positively affect the long-term value of BNB.
- Growing utility
The binance ecosystem is on a growth trajectory. Things like Dexs, DeFi feed into giving utility to BNB. This will reflect in the value of BNB. It is one of the key reasons why BNB holds the most potential for sustained growth long term.
- The Binance Network effect
Network effect is critical to a crypto’s growth. It is the reason Bitcoin ranks number one, despite being quite slow in transactions. On its part, Binance coin is anchored on Binance exchange, whose user base stands at over 15 million. With the exchange ever innovating, these numbers will only grow, and so will the usage of the Binance coin, and its value.
All the above factors point to Binance coin (BNB) as a top crypto to watch in the long-run. It is the best shot for people who want stability and growth in the crypto space.