The 5 Biggest Mistakes You Can Make When Buying Binance Coin
by Lyle Daly | Published on Aug. 5, 2021
You're more likely to be happy with your Binance Coin purchase if you avoid these common mistakes.
If you've been checking the charts, looking for which crypto to invest in, Binance Coin (BNB) is probably one you've noticed. It has had spectacular results in 2021, going from under $40 at the start of the year to nearly $700 in May. Because of a down market the last two months, it now sits below $300.
With the recent price dip and the potential of Binance Coin, this may seem like the perfect buying opportunity. Before you jump in, though, watch out for a few mistakes new buyers often make.
1. Not learning about Binance Coin first
Buying Binance Coin is an investment. Like any investment, you should learn about what you're buying first so you can be confident you're making a good decision. Don't commit your money just because other people are enthusiastic about it or because the price is lower now than it was two months ago.
There are certainly reasons Binance Coin could do very well. It's the native cryptocurrency for Binance, the biggest crypto exchange in the world by trading volume. It's used to pay gas (transaction) fees on the Binance Smart Chain, a programmable blockchain that's rapidly growing in popularity.
However, Binance Coin is far from a sure thing. Binance may be successful, but it's also known for pushing the limits legally, and it was recently banned in the U.K. Issues like that could have a negative impact on Binance Coin going forward.
2. Trying to time the market
Whether you're buying stocks or crypto, it's impossible to time the market. In fact, that's especially true with cryptocurrencies because of how volatile they are.
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Trying to buy Binance Coin at the right time usually leads to paralysis by analysis. If the price goes up, you start thinking that you should wait for the next dip. If the price goes down, you figure you should wait for it to drop more so you can get the best deal.
Remember that you chose Binance Coin because you consider it a good investment. You don't need to stress about buying at the absolute lowest price because you have confidence the price will eventually go up regardless.
3. Picking the wrong place to buy it
With so many cryptocurrency scams out there, it's important to buy from a reputable exchange. And in this case, it can't be just any exchange, because many cryptocurrency exchanges and apps don't offer Binance Coin.
The easiest option is to buy Binance Coin at Binance, which is where most buyers get it. Technically, there are two versions of Binance: the original, international version and a more-limited U.S. version. Although the U.S. version doesn't have nearly as large a cryptocurrency selection, it does have Binance Coin.
Another good option is Crypto.com. It's one of the more advanced crypto platforms, so it can be difficult to navigate at first, but it also has quite a few features.
4. Using a costly payment method
Crypto exchanges typically offer multiple payment methods. At most exchanges, you pay the least in fees when you transfer money from a bank account. Other methods, such as paying by debit card or a money wire, tend to cost more.
Go over the fees for each payment method with your crypto exchange. Pick the most inexpensive option so that you don't pay more than necessary.
Keep in mind that bank transfers can take several business days to process. You'll need to wait for the funds to reach your exchange account before you can make your purchase.
5. Spending more than you could afford to lose
If there's one rule to follow with any crypto investment, it's to only spend what you can afford to lose. Don't put your life savings into Binance Coin. Before you buy any, you should have a three-to-six-month emergency fund and a retirement fund you contribute to monthly.
With all the stories of people becoming crypto millionaires and billionaires, it's tempting to go all in. But those examples are few and far between. It's also important to remember that crypto is very new. Bitcoin, the oldest cryptocurrency, has barely been around longer than a decade, and Binance Coin is only four years old.
The future of Binance Coin is uncertain. Hopefully, the price keeps going up and your investment pays off. Just make sure to also plan for the possibility that it doesn't.
About the Author
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
Lyle Daly owns Bitcoin and Binance Coin.