Please ensure Javascript is enabled for purposes of website accessibility

Why Binance Coin Is Flying High Today

By Zhiyuan Sun – Aug 23, 2021 at 2:23PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This is an intriguing cryptocurrency you don't want to miss out on.

What happened

Binance Coin (BNB 2.43%) is up 12.41% in the past 24 hours to $498.86 per token as of 2:30 p.m. EDT. Investors are excited about the prospects of a new beginning for the namesake company behind Binance Coin after the appointment of Richard Teng as CEO for Binance Singapore. Binance has grown to become the world's largest cryptocurrency exchange, but issues surrounding its ultra-high leveraged trading, derivative products, and potential hacks have received increasing regulatory scrutiny. The company has recently begun to seek more compliance with financial regulators.  

Two people analyzing coin exchange data on the computer.

Image source: Getty Images.

So what 

Binance Coin is directly tied to the health of the parent company due to the hyper-deflationary nature of its supply base. That's right, Binance uses its profits to burn Binance Coins every quarter, similar to buying back stock, with over $390 million BNB tokens burned in Q2 2021. 

Now what 

BNB's main utility is to give users a 25% discount in brokerage fees when trading on the Binance platform. So one would only pay $0.075 instead of $0.10 on every $100 of cryptocurrency they buy or sell on Binance.

Do not be fooled by the small difference. Nowadays, most of cryptocurrency trading volume is done by high-frequency bots. For example, 3Commas fully integrates with Binance and processes $22.5 billion worth of cryptocurrency trades every month. So the slightest change in trading fees at that level makes a huge difference. Due to its unique utility and buyback structure, it is a solid token to be on the lookout for

Zhiyuan Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Binance Coin Stock Quote
Binance Coin
$315.15 (2.43%) $7.49

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.