Binance Coin Price Prediction: The Bullet-Proof Builder? (2024)

BNB, short for “Build and Build,” is the native cryptocurrency of the Binance ecosystem, the world’s largest centralised exchange by trading volume. Created in 2017, BNB has quickly risen to be a mainstay in the crypto space. As of May 15, 2024, it ranks as the fourth largest cryptocurrency by value, with a market capitalisation of $US85.97 billion.

BNB is Binance’s native alternative coin (altcoin), and has a maximum supply of 200 million, with a circulating supply that is considerably lower at 153 million.

This reduced supply is due to buy-backs of BNB implemented by Binance, which have contributed to the coin’s strong price growth.

As an altcoin, BNB offers users a range of benefits within the Binance platform, such as reduced trading fees, access to exclusive token sales, and the ability to transact on the Binance ecosystem blockchains. The coin’s versatility and the strength of the Binance brand have solidified its position as one of the most well-known and traded cryptocurrencies in the market.

BNB was priced at a mere $US0.15 during its initial coin offering (ICO) in 2017, and has experienced extraordinary growth since. Despite facing multiple market downturns, it has shown resilience in the face of volatility, with very few prolonged periods of price stagnation.

In its early years, BNB’s price fluctuated between the mid-teens and $US40. However, the coin’s fortunes changed dramatically in 2021 as the cryptocurrency market boomed. During this period, BNB’s price reached an all-time high of $US690 at the height of the pandemic-driven market frenzy.

Following this peak, BNB’s price experienced some turbulence as the overall crypto market faced challenges, including the collapse of Terra Luna and the FTX catastrophe. Robert Quartly-Janeiro, chief strategy officer at Bitrue, points out that “the lowest price since the peak was $US205 in late 2023 when company-related news impacted the price”.

“BNB has shown itself to be fairly resilient to market sell-offs,” Quartly-Janeiro tells Forbes Advisor.

“Not that it hasn’t been sold off; it has, but the price of BNB hasn’t often seen periods of plateau.” This characteristic sets BNB apart from many other cryptocurrencies, which often experience prolonged periods of stagnation following significant price declines.

The coin’s strength was further highlighted earlier this year when 11 Bitcoin spot exchange-traded funds (ETFs) were approved for trade in the US by the Securities and Exchange Commission (SEC). The approvals drove a broader market rally that saw BNB’s price reach above $US580, just shy of its 2021 peak.

As we look ahead to BNB’s performance in 2024, it’s essential to consider the various factors that influence its price movements.

Quartly-Janeiro says the popularity of the Binance exchange helps boost the alt coin’s prospects.

“It is well known that BNB offers discounts on trading fees on Binance itself, and is therefore popular with those who use the platform,” he says.

Binance is widely regarded as the largest crypto exchange in the world. It consistently maintains the highest trade volumes of any exchange and serves almost 190 million users across more than 180 countries. This factor alone drives significant demand for BNB, which could explain its resilience against rapid price decreases.

However, Quartly-Janeiro also points out that Binance’s market share has been steadily declining “from a peak of 60% a few years ago to as low as 32% in January 2024”. This trend could potentially impact BNB’s price, as the coin’s value is closely tied to the success and popularity of the Binance exchange.

Furthermore, Quartly-Janeiro adds that BNB is influenced by two key factors.

“The price of BNB is driven by both broader digital asset moves—the market does well, it does well—and the fate of Binance itself,” he says. The latter has become increasingly complex, with Binance facing regulatory scrutiny, hefty fines, and even the imprisonment of executives in specific markets. These events have occasionally triggered a “sell the news” response, causing BNB’s price to fall.

However, Binance is not the be-all and end-all for BNB. The Binance ecosystem has expanded beyond the exchange and now consists of three blockchains, each with a unique ecosystem of decentralised applications. BNB acts as the native token for these chains, meaning it is required to pay transaction fees and is the dominant token pairing for liquidity pools.

Several factors will likely shape BNB’s performance for the rest of 2024.

“For the year ahead, the issues confronting BNB are the broader macro picture, whether the post-halving sell-off is sticky or transitory, trust in it as a base altcoin, any planned developments for it, and whether Binance has shaken off all its regulatory issues,” Quartly-Janeiro says.

Despite these challenges, Quartly-Janeiro acknowledges that Binance has been working diligently to address regulatory concerns, adding that “to its credit, it is seemingly resolving [these issues] at a rate of knots”.

The bull case presents an optimistic outlook, looking into situations in which BNB’s price could increase. Conversely, the bear case takes a more conservative approach, outlining the reasons why BNB’s price might experience a decline. By considering these two contrasting viewpoints, we can gain a well-rounded understanding of the altcoin’s possible trajectories.

Bull Case

A bullish outlook for BNB would be driven by several key factors, including, according to Quartly-Janeiro, one involving “widespread buying by investors either holding it for the first time or using it as a safe haven to exit other altcoins”. This increased demand could significantly boost BNB’s price and market capitalisation.

Moreover, if Binance were to achieve a higher market share, reenter markets it previously left, or establish itself as a leading player in new markets, these developments would be considered positive fundamentals for BNB.

“You might hear discussing or approving BNB ETF products or the firm announcing partnerships with organisations like Visa or Mastercard,” Quartly-Janeiro says.

Growth of the BNB chain ecosystem could also further drive demand for BNB, as it is essential for users to transact on any chains that use BNB as the native currency. Much like Ethereum and its native token ETH, BNB chain users inevitably buy some BNB to hold in their wallet for transaction fees, effectively reducing the number of tokens available on the open market. This creates a boost on the demand side while simultaneously decreasing coins for sale on the supply side.

Macroeconomic factors could also drive demand for BNB.

Quartly-Janeiro notes that “a drop in inflation leading to higher disposable income or economic contagion leading to flight from fiat currencies”could increase interest in cryptocurrencies like BNB.

Additionally, greater integration of BNB with purchases of real-world goods and services, bolstered by the trust placed in Binance, could further contribute to the coin’s growth.

Bear Case

While the bull case seems solid, several events could lead to BNB’s downside and potentially cause a a heavy sell-off.

Quartly-Janeiro cites the macroeconomic environment, which has been a critical driver of crypto markets in the past, as a significant concern. Recent data from the US shows that inflation remains stubborn, and despite the pause in rate hikes, it doesn’t appear that the world is out of the woods just yet.

“(Investors) may need to liquidate digital assets to finance day-to-day spending in a tough inflationary environment,” says Quartly-Janeiro.

Perhaps the most significant risk to BNB’s future would be any challenges to the survival of Binance itself. While BNB’s direct relationship with the exchange as its native token has its benefits, it also leaves BNB vulnerable to collapse if anything happens to the exchange. As was the case in late 2023, negative news for Binance is also interpreted as negative news for BNB. However, while Quartly-Janeiro notes that “challenges to the survival of Binance” could negatively impact BNB, he says this “seems unlikely given its reserves and international following”.

BNB’s future will be shaped by a complex interplay of factors, including investor sentiment, macroeconomic conditions, and the overall health of the Binance ecosystem. While there are potential risks and challenges ahead, Binance’s strong position and the exchange’s proven resilience suggest that the coin has the potential to weather any storms.

When considering whether BNB is a good investment, it is essential to evaluate its past performance, current market position, and both the bull and bear cases. While BNB has established itself as a mainstay in the cryptocurrency market, whether it is a good investment for an individual ultimately depends on their belief in the Binance ecosystem, confidence in the ecosystem’s future and belief in the overall success of crypto.

“What it is possible to say with a degree of certainty is that owing to the global nature of Binance as a firm with 7000 staff and the resources that it has, BNB will benefit from being more actively managed than other coins,” Quartly-Janeiro says.

“Binance is active in buybacks of BNB when the price falls or when they think the market will move in their favour.” Additionally, the increasing utility of BNB, driven by Binance’s global reach, trust among users, and strategic partnerships, further strengthens the coin’s long-term prospects.

When it comes to BNB’s reputation as an investment, Quartly-Janeiro says it is undoubtedly one of the most popular and well-known digital assets in the market. However, whether this popularity translates to being a good investment depends on individual perspectives and risk tolerance.

Looking back to the period between 2018 and 2021, BNB’s price remained below $US41, making it an affordable investment opportunity for most people.

“On an inflation-adjusted basis, since inception, BNB has done incredibly well, and that is one of the reasons why people buy digital assets: declining purchasing power,” says Quartly-Janeiro.

As BNB’s price has risen to over $US500, the dynamics of investing in the coin have changed.

Quartly-Janeiro notes that “in order to see large-scale appreciation, digital asset adoption of BNB would be needed”. While many commentators speculate that BNB could surpass $US600 in 2024, the potential for modest gains may not justify the increased risk at the current price point.

When asked whether BNB was a good investment from a purely quantitative, risk-reward perspective, Quartly-Janeiro was circ*mspect: “Given BNB’s price is just below its peak, mathematically you’d have to say ‘no’ at present.” This assessment is based on the typical investment mantra to buy when prices are low and sell when they are high.

Whether BNB is a good investment for you depends on your personal situation. While risks and uncertainties are associated with any cryptocurrency investment, BNB’s strong market position, active management, and potential for increased utility suggest that it is likely to remain a significant player in the digital asset space.

“BNB is certainly here to stay, a good investment depends on whether you like the ecosystem and believe in the company’s plans for it,” Quartly-Janeiro says.