Binance Coin Price Forecast: Here’s Why BNB Touts Great Upside Potential
Why Binance Coin Is Surging And What to Expect Next
Binance Coin (BNB) has soared more than 25% on a day when crypto markets are tumbling at large. The stupendous price rally followed after one of the world’s largest exchanges announced a new venture that will adopt BNB coin as its native coin.
Cryptocurrency exchange Binance revealed yesterday that it would soon be launching a decentralized exchange. Why is this a big deal? Because, as Binance identifies, this initiative will help it “transition from being a company to a community.” (Source: “Binance Chain,” Binance, March 13, 2018.)
Allow me to explain what that means.
After countless exchange hacking incidents, most recent of which is the infamous Coincheck hack, crypto investors have been earnestly calling for an alternative to centralized exchanges.
Binance is the first major exchange to have responded to investor hue and cry. The decision comes just days after Binance, too, got hacked. While investors were kept safe from the robbery, Binance took the blow since it had to compensate the affected investor accounts out of its own pocket. It served as a band-aid solution, but Binance obviously sought a more permanent fix.
So, the company is now launching a decentralized platform for trading named “Binance Chain,” which will be built on the blockchain technology and adopt the already existing Binance Coin as its native coin.
What this simply means is that once the exchange is up and running, Binance Coin will become the token of exchanging value, not Bitcoin or Ethereum, against which most altcoins trade on ordinary crypto exchanges.
In other words, every time a new investor will join Binance’s decentralized exchange, automatic demand will be generated for Binance Coin.
It’s easy to put two and two together now. Binance Coin will see a surge in price and speculators have already begun hoarding it in anticipation.
Chart courtesy of TradingView.com
Now, fully decentralizing its business makes little sense to a profit-seeking crypto exchange. After all, doing so puts a cap on the fees it can charge. But Binance is thinking above and beyond monetary profits for now.
You see, losing investors post a hacking incident is a bigger business threat than having a limit on fees. By offering its customers a secure network, Binance is looking to make money via fee volume.
Imagine Binance Chain to be a parallel universe for traders within the Binance community, which will give them an option to trade with security, anonymity, and peace of mind.
For Binance, it’ll create a loyal community of traders who will eventually be putting in a good word for it in crypto investor circles. There’s a fancy business term for it: brand recognition.
Analyst Take
In short, Binance Chain will be an opportunity for Binance to lure more investors to its platform.
Considering the size of trades that take place on Binance, it’s safe to expect Binance Coin to more than double in price once Binance Chain takes off. The price target is not too difficult to fathom given that BNB coin has, at one point, traded for as high as $21.48 apiece.
So, we are foreseeing Binance Coin retracing its steps to its all-time highs, and eventually beyond.
