Binance Coin (BNB) Uses, Support, and Market Cap

What is Binance Coin (BNB)?

Binance Coin is a cryptocurrency issued by Binance exchange and trades under the symbol BNB. In May 2024, Binance exchange was the second-largest cryptocurrency exchange in the world (verified by Coinmarketcap) with a daily trading volume of $11.8 billion. Binance Coin (BNB) had a 24-hour trading volume of $1.45 billion.

Key Takeaways

  • Binance Coin is a cryptocurrency issued by the Binance exchange and trades under the symbol BNB.
  • Every quarter, Binance uses one-fifth of its profits to buy back and permanently destroy (or “burn”) the BNB held in its treasury.
  • Binance was created in 2017 as a utility token for trading fee discounts, but its use has expanded to a variety of applications, including trading fee payments (on Binance Chain), travel bookings, entertainment, online services, and financial services.
  • At the time of writing, Binance Coin (BNB) has a market capitalization of over $87 billion, making it the third largest cryptocurrency after Bitcoin, Ethereum, and USD Tether.

On November 21, 2023, Binance and its CEO, Zhao Changpeng, pleaded guilty to money laundering. Binance agreed to pay $4.3 billion to settle the charges, and Zhao agreed to step down as CEO and pay $50 million in settlement money. On April 30, 2024, Zhao was sentenced to four months in prison and a $200 million fine for violating U.S. anti-money laundering laws. As of May 11, 2024, Binance is open and remains a popular cryptocurrency exchange.

Understanding Binance Coin (BNB)

The Binance blockchain is built using Ethereum and uses BNB as its native token. It was launched during an Initial Coin Offering (ICO) in July 2017 and has a strict limit of 200 million BNB tokens. The ICO offered 10% or 20 million BNB tokens to angel investors, 40% or 80 million tokens to the founding team, and the remaining 50% or 100 million tokens to various participants.

Nearly half of the funds raised during the ICO process was planned to be used for Binance branding and marketing, and roughly one-third was used to build the Binance Platform and carry out necessary upgrades to the Binance Ecosystem.

The biggest cryptocurrencies

On May 11, 2024, BNB was the fourth largest cryptocurrency by market cap after Bitcoin, Ethereum, and USD Tether.

Binance Coin Burning

Every quarter, Binance uses one-fifth of its profits to buy back and permanently destroy (or “burn”) the BNB held in its treasury.

Binance regularly conducts such burn events. As of May 2024, the most recent BNB burn was on April 24th. Binance burned a total of 1.94 million BNB, equivalent to $670.78 million. This was Binance’s 27th quarterly BNB burn.

Binance Coin Use and Support

BNB was created in 2017 as a utility token to offer discounted trading fees. Since then, its use has expanded to numerous applications on various platforms. It is used to pay trading fees on Binance.com, Binance DEX, and Binance Chain.

It can also be used for payments (at places like Monetha and HTC), booking travel accommodation (on sites like TravelbyBit, Trip.io, Travala.com), entertainment purposes (buying music and gaming rewards), paying for online services (BitTorrent, Canva, Storm) and even financial purposes (taking out a loan with ETHLend, investing with Moeda).

Binance Smart Chain

As of May 2024, Binance Smart Chain is processing as many as 3.5 million transactions per day, more than double Ethereum’s all-time high. However, this is down from the record of over 32.6 million transactions per day reached in December 2023.

You can also use BNB to invest in certain ICOs that are listed through Binance’s Launchpad program. New cryptocurrencies are listed on the Binance exchange, which offers a seamless marketplace for trading a variety of existing and new virtual tokens.

Is Binance Coin worth buying?

It all depends on your preferences, risk tolerance, outlook and investment goals, and it’s best to consult a financial advisor to find out if BNB is right for your portfolio.

What is Binance Coin?

Binance’s cryptocurrency, BNB, is used for on-chain transactions and can also be used to purchase goods and services from participating vendors.

Will Binance Coin hit $10,000?

It is difficult to say what the price of the asset will be in the future, as there are too many factors that influence the price, but while it is possible that BNB could reach $10,000, it is just as likely that it could fall to zero.

Conclusion

Binance Coin (BNB) is the native token of the Binance blockchain, and like many other cryptocurrencies, it can be used as a form of payment for goods and services around the world.

The comments, opinions and analyses expressed on Investopedia are for informational purposes only. Please read our warranties and disclaimers for more information.

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