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Why Binance Coin Is Flying High Today

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

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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.

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Stocks Mentioned

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

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