27 Jan 2021 #Binance Coin
Since its launch in 2107, Changpeng Zhao and his team have been working ceaselessly to turn the up-and-coming cryptocurrency exchange domiciled in Malta into the largest centralized marketplace with 945 tradable currency pairs, a throughput of 1,4 million orders per second, and the reported average trading volume of $2.8 billion. However, thanks to a new metric called the Estimated Real Volume (ERV), we were able to estimate a more realistic volume at $2.7 billion. Nevertheless, it’s far greater than that of its main rivals, Huobi Global, Coinbase Pro, Kraken, and Bitfinex.
This relative dominance over the opposition means that more traders are giving preference to that platform that ultimately creates the persistently high demand for its native token Binance Coin (BNB). Therefore, it would be logical to assume that the price of Binance Coin in 2025 and 2030 will depend on whether or not Binance managed to preserve its status as a leading cryptocurrency exchange platform, especially in the face of the rapidly rising sector of decentralized finance (DeFi).
But before we delve into our comprehensive Binance Coin price prediction, let’s make a quick recap of BNB’s role in the Binance’s ever-growing infrastructure. The coin was launched in 2017, first as the ERC-20 token created and operated on the Ethereum blockchain. But in two years, the team introduced the Binance Chain mainnet on its proprietary blockchain (Binance Chain) that led to the transition from the ERC-20 protocol to BEP2, Binance’s own technical standard that, nevertheless, bears a lot of similarities with the original protocol for issuing tokens. Functionally, BNB is also similar to Ethereum’s gas since it’s used to cover the transaction fees.
Like any other exchange coin, Binance Coin can guarantee a significant reduction of trading fees if a trader opts to pay them in BNB. The coin can also be used to buy goods and services from hundreds of online merchants through various payment gateways. The fundamental idea behind BNB is quite straightforward and simple: a native coin that is a lifeblood of the constantly growing ecosystem, the price of which is the direct correlation with the platform's popularity, expressed in trading volume and liquidity.
The current price of BNB stands at $27.7, established on the back of a minor 2.2% reduction of its USD value in the past 30 days, though the negative gap between the top two cryptocurrencies is far greater: a 17.5% drop against Bitcoin (BTC) over the said period, accompanied by an even larger 21.4% BNB price decrease compared to Ethereum (ETH). Binance Coin’s performance profile on a larger scale (1 year) appears to have the very same dynamics as BNB stays confidently in the green against USD but falls behind BTC and ETH.
This doesn’t necessarily mean that we have a bearish bias towards this cryptocurrency or have doubts regarding whether BNB is a good investment. On the contrary, our BNB price prediction for the next 5 and 10 years is largely bullish since over the years, Binance as the organization and the provider of financial products has shown a superb capability to respond to emerging challenges, one of which is the rise of the DeFi movement, upon which we will elaborate later. A quick glance at the BNB’s historical chart will tell you that the price has been in a state of continuous uptrend since 2017.
BNB historical chart. Source: CoinMarketCap
The price of BNB had been tested with the 2018-2020 bear market, also dubbed the crypto winter, as well as the COVID-19 crisis - as you can see, it had always passed those tests in flying colors, recording only one significant through during the turbulent drop in March. Thanks to the consistency in making higher lows/higher highs, the main attributes of a stable uptrend, traders saw the Binance Coin highest price at $39,6 reached on June 17. However, after attaining the historical highs, BNB has had a 24% pullback to the current price level, though it’s far from posing a threat to the general uptrend structure. Now, after reviewing the current situation on the BNB market, it’s time to reveal our thoughts on what Binance Coin will be worth in 5 and 10 years.
Right now, we are witnessing how the entire cryptocurrency market, including Binance Coin, is laying the groundwork for the second bull market in its history, which was instigated by the active buying on the part of institutional investors like MicroStrategy and Grayscale. But the entrance of big financial firms into the crypto space has only given the industry a great big spark, but the real bull market will take shape only when a “little guy” gets his skin in the game. The deteriorating global economy and the weakening US dollar will undoubtedly rekindle the interest of retail investors in cryptocurrencies, thus making Binance a go-to place for crypto trading, which would ultimately increase the demand for BNB and inflate its price further.
1-week BNB/USDT chart
The weekly chart above shows BNB forming a symmetrical triangle as a part of the bullish pennant, a classic continuation pattern. It suggests that in 2021, the price of Binance Coin will make an attempt to revisit and surpass the all-time high. However, there are several factors that speak against the resolution of the symmetrical triangle to the upside in the Q1 of 2021:
But even if the drop is to occur, the price action should respect the uptrend boundaries and refrain from falling beneath the 50-period EMA. However, there is a high likelihood that before revisiting the ATH, Binance Coin would drop below a line of strong support (former resistance) at $25.5 and find support near the moving average. But we also see that every time the price of BNB had interacted with the 50 EMA, it had dipped even lower, so we can’t disregard the scenario where BNB falls to $18.5 - $19, presenting a splendid opportunity to buy the first big dip of 2021. But if the Binance Coin price resolves the triangle to the upside, the first encounter with the historical high might occur as soon as January - February 2021 since over the year, the exchange coin has shown a proclivity to bullish rallies in the first months of the year (please see the BNB historical chart above).
1-year BNB price prediction chart
This technical analysis falls in line with our proprietary BNB price prediction model that combines the showing of the Cryptocurrency Volatility Index (CVIX), the Binance Coin price history, as well as different on-chain metrics. It shows that by the end of the year, BNB could see a 3% to 10% drop, followed by the explosive growth of the BNB price in 2021, all the way to 2022. Our algorithm predicts that in 30 days, BNB will be 3% below its current value, whereas over 2021, the price will get the 103,7% appreciation and rise to $56 over the next 12 months.
We expect that institutional investors will keep pouring capital in the cryptocurrency market, thus creating more demand for digital assets, especially the top-ranked ones like Binance Coin. Since Binance has its own Over-The-Counter (OTC) trading portal - many big players on the market prefer buying crypto via OTC, which isn’t reflected in the volume profile on the stop trading platform - which heightens the interest of top investment firms towards the exchange platform and its native coin. And that’s not taking into account the possibility of the FOMO-inspired bull run that could stay relevant throughout the first half of 2021. By the end of next summer, we expect BNB to blow off some steam - the tendency that was seen during the past two years throughout the cryptocurrency market. From that point onward, the price of Binance Coin will depend on whether or not the whole DeFi movement would prove to be the real deal or the fluke like ICOs in 2107.
The next 5 years will be crucial for Binance as the decentralized exchange, especially if the likes of Uniswap, a decentralized exchange for direct swaps of ETH and all ERC-20 tokens, would keep getting even larger traction than it did during the summer of 2020. It would ultimately lead to a standoff between DeFi and CeFi (centralized finance) projects, one of which will surely lose the lion’s share of their users and the degradation of native coins.
The DeFi boom of 2020 sees the total collateral locked into various borrowing and lending protocols surge to $14 billion, as many people are seduced by unprecedentedly high interest rates, hence profits, that can be obtained through yield farming.
TVL in DeFi. Source: DeFi Pulse
This year’s explosive growth of the decentralized finance sector is also associated with the emergence of decentralized marketplaces, also known as exchange liquidity pools, like Uniswap, Curve, and Balancer that have immediately began to nibble at Binance’s user base, and will keep on doing so all the way to 2025, especially after Ethereum 2.0 - all DeFi projects run on the Ethereum blockchain - gets fully functional, which, according to Joseph Lubin, should happen within the next two to three years. Ethereum’s scalability, as well as the network congestion issues, are putting restrictions on the growth of DeFi, but once they are being dealt with, the decentralized exchanges could realize their potential to the fullest, to the point where they might even render the centralized platforms like Binance nearly obsolete, if they fail to adapt.
The CEO of Binance Changpeng Zhao, also known as CZ, admitted that Uniswap and others have already been poaching users en masse, signifying the beginning of the long conflict between DeFi and CeFi, represented by Binance, OKEx, and Coinbase, that is set to occur over the next five years and perhaps even change the industry as we know it. Although it’s understandable why Zhao could have already admitted defeat since centralization goes against the very concept behind blockchain and cryptocurrencies. However, it seems that CZ understands that the time is running out for centralized exchanges; that’s why he has been so vocal lately about Binance’s efforts to adapt to the emerging circumstances. So much so that the special program called Binance Earn, which incorporates many key characteristics of decentralized finance, has been recently launched, providing such asset management options as liquid swaps and dual savings. The CEO himself said that the company would be pushing for more decentralization over the next five years and adopt all useful innovations for the purpose of creating a divergent economic system that would allow the individual to achieve full control over his money.
It seems that Zhao’s plan for the next five years is to refrain from engaging in direct confrontation with DeFi firms, which Binance is likely to lose, but rather focus on the gradual integration of its finest solutions on the centralized exchange. In other words, CZ is looking to create a solid infrastructure for thriving cryptocurrency projects, including the ones that represent DeFi, all elements of which are built on the proprietary blockchain (Binance Chain), while the competitors would have to rely on the Ethereum blockchain that is going to stay raw for another couple of years.
We believe that the current, and especially the improved, infrastructure will give Binance the necessary edge over the scattered DeFi projects that are also competing against each other. And that's the primary reason why we believe that Binance will remain relevant for years to come, and the price of BNB will keep on rising, as per our own price prediction model.
5-years BNB price prediction chart
It says that in 2 years, the price of BNB in USD will enjoy a nice 255% appreciation, reaching $97 per exchange coin. Three years from now, BNB will be worth triple digits, $166 to be precise, which will mark a 508% increase from the current price of Binance Coin. The exchange token will keep on going to the upside in leaps and bounds and reach $307 by the end of 2024, which corresponds to the 1027% price increase. And here’s to answer the question of what Binance Coin will be worth in 5 years - our algorithm predicts that in 2025, traders and investors will be the highest price of BNB being established at $610, a huge 2132% rise to the upside.
Despite the hints of negativity coming from our fundamental analysis of Binance’s future as a centralized exchange platform, our algorithm suggests the exponential growth of Binance Coin price during the next five years. It could be explained by the fact that the Binance team has enough intellectual and financial resources to turn the current disadvantage into a worthy edge over the competing DeFi platforms by hybridizing the global infrastructure for CeFi, which Binance is expanding ceaselessly, with the innovative solutions offered by DeFi developers.
The team has already begun going on enemy’s turf, so to speak, as platform users were recently introduced to such services as pooling, staking, and lending, along with the mentioned Binance Earn, while also establishing the accelerator fund for DeFi startups on Binance Smart Chain.
We reckon that despite being at a relative disadvantage, Binance’s executives are eager to embrace new solutions in order to maintain the status of the largest provider of cryptocurrency exchange services, thus keeping the demand for BNB at a high level.
Even though we have painted a bright future for Binance for the coming 5 years, there is no guarantee that it will be at the top in 2030. Our main concern regarding Binance as an unregulated exchange is it might come under some serious legal scrutiny, similarly to what happened to OKEx lately, once the authorities start taking crypto even more seriously due to its increasing adoption rate. And that might have a detrimental effect on the price of BNB. Plus, we can’t disregard the possibility that Binance could simply stall in its development that would also reflect negatively on the price of Binance Coin.
But that might happen only if Binance changes its jurisdiction from crypto-friendly Malta or sees the radical changes in the executive and developer teams that would lead to project’s degradation. But if they manage to maintain and improve the current pace of expansion and innovation, the price of BNB in USD will surely reach $900 -$1000 by 2030.
Since BNB is in a state of a continuous uptrend with no signs of reversal, we consider this cryptocurrency to be a great investment, especially if you are trading on Binance.
Binance Coin is the native token of the eponymous cryptocurrency exchange with the largest liquidity and trading volume, as well as the team that keeps an open mind towards innovative solutions.
By the tail end of 2021, BNB will be worth $56 - $60.
Our algorithm predicts that in 5 years, the price of BNB will stand at $610.
If Binance is to maintain its current pace of development, by 2030, BNB will be valued close to $1000.
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