How to Invest in Binance Coin in 2022

By Josh Baazov on April 25, 2022
Josh Baazov Binance Coin

The native coin Binance Coin or BNB is the biggest cryptocurrency exchange in the world. This is a utility token in the trading market and can be used for trading fringe pairs and also paying fees.

The Binance exchange began less than 4 years ago. And within this short span of time, it has seen great fortunes and commendable growth. Today, it is one of the top 10 coins in the market with a worth of more than $40 billion.

But the question is how can you smartly invest in the token and how you can manage to make certain potential gains in the years to come. Here, we have put together a few ideas which will help you in the Binance Coin investment. Every strategy is different and it will depend on you how you can identify which one is right for you.

1. Get Binance Coins Via an Exchange

You need to have a cryptocurrency wallet before becoming a part of the exchange. This wallet will enable you to keep the coins in a safe manner. There are two kinds of wallets in today’s times- the hardware wallets and the software wallets. Software wallets are available in the form of mobile or desktop applications and websites.

These are easily accessible and appropriate for traders who carry out BNB transactions on a regular basis. But these are not as secure as the hardware wallets as they are almost always connected to the Internet. Trust Wallet or MetaMask are some of the popular software wallets. USB flash drive-like devices that keep your BNB private keys offline are some of the hardware wallets.

These are safe and right for all the long-term users along with investors who hold big amounts of a particular cryptocurrency. Corazon, Ledger, and Trezor are some great hardware wallet examples. You should be a part of a renowned exchange for registering an account only after getting a wallet.

After this, you should upload a picture of any identity proof like the passport, give address proof, and a picture of yourself to complete the KYC process. Following this, you can proceed to buy the BNB tokens and fund your account.

2. Buy the Binance Coin from an Exchange in Fractions

The second way in which you can invest in the BNB is by buying the BNB coins infractions via a cryptocurrency exchange. This is right for retail-based investors who consider the rates a little expensive. In 2022, the Binance Coin costs about $600. Everyone who is interested in this asset might not have the purchasing power to buy the coin.

So, it can help to know that it is possible to buy the coin in small fractions. You can divide the BNB by 8 decimal places. Jager is known as the smallest unit which means that 1 BNB will be 100 million Jagers. You can buy the BNB which is worth a dollar or a few cents.

However, the purchase should be able to cover these as there will be network fees involved. That is why some platforms will need you to buy BNB worth at least $10. And if you can get hold of the correct investment strategy, you will be able to accumulate the BNB stash over a substantial period of times

3. Use a Broker to Trade Binance Coins

The traders or investors are often offered an easy way to make profits from their digital assets like BNB by crypto brokers. The most amazing advantage would be that you do not require holding or interacting with the actual asset. The broker will take care of it for you.

Apart from this, you are allowed to trade with leverage which can create an increase in your initial capital and grant you more exposure within a certain market. This enables the trader to profit by often speculating on the little BNB price fluctuations. If the volatility is high within the crypto market, it means that you can earn great profits from BNB trades with the help of a broker.

4. Binance Coin ETF

You may invest in an ETF or what is known as the exchange-traded fund for the Binance Coin. Such financial instruments will help you to track your stocks, indices, and other assets. These can be bought or sold on a stock exchange, which indicates that these can be monitored, thereby adding an additional security layer.

Several assets make an ETF which ensures that the risk is distributed effectively even though some assets might not perform as well as expected. The losses arising out of these can be offset by the fruitful performances of other assets within an ETF.

This will be appropriate for the investors who are interested in the asset but also want to manage the risks that usually come with the coin. You can take part in this kind of trade by going to a stock exchange offering one or a brokerage firm.

They will provide you with an option to opt for an ETF made of only digital assets in case you are not keen on spreading the risk to other categories of your assets.

Investment Strategies for Binance Coin Investment

Here are a few great strategies that can be used for entering the BNB market and how you can benefit from these. Take a look.

1. Buy & Hold

Buying and holding BNB is a brilliant strategy for long-term investors.  What you need to do is buy and hold on to your tokens for a long period of time. BNB has registered an ROI of more than 204000% within less than 4 years of its being launched.

This became possible because of the power of holding on to your tokens. The current price will look like a bargain after 5 years if this trend continues as the expectations.

There are various ways in which one can benefit from this strategy. You will not have to bother about the regular volatility of the BNB price. Moreover, you have a chance to win big for years once you begin to have faith in the poet of Binance Coin. It is the easiest way you can make the BNB investment.

2. Shorting

If you think that the price of the BNB is going to reduce, then this investment strategy will be perfect for you. Firstly, you should borrow the BNB from a broker and then sell it out at a market price. For instance, if you buy it at $10, you can repurchase it at $8 and give it back to the broker.

After repaying the debt, the difference money of $2 can be yours as profit. This will enable you to understand the fundamental and technical analysis for using this strategy in the right manner because you could incur losses when the price of the BNB goes higher.

3. Day Trading

Day Trading is the buying and selling of BNB tokens rapidly within a short span of time. It is the opposite of long-term investment. It aims at making profits from small differences in price. Due to the huge market volatility, one can engage in this strategy often and gather major profits over time.

But this is certainly not for everyone and you will require understanding the trading expertise to a certain extent for executing this strategy successfully. You must know how to conduct the fundamental and technical analysis. You will be able to time the market fruitfully in this way.

Investors will not have to think about owning and storing BNB tokens. Further, they can hire a broker who will leverage and make the most of small differences in price with amazing returns. Apart from this, you will get to make daily profits and you may also copy the expert strategies on some platforms to make the exact same results.

4. Hedging

Hedging means involving forming new positions for covering all the potential losses from the open positions. It can be made possible if you combine CFDs, shorting, and futures to hedge your investment in the BNB.

You can start a short position against the BNB you hold when you want to reduce your losses when the price goes down or you may also sell the futures contract to earn more profits quickly.

You will safeguard the capital with hedging BNB. This will help in protecting you from losses in the first position, thereby preventing any risks effectively. You will be able to maximize your potential of making profits with the restricted downside, as a result of this. Moreover, you will be able to manage the price volatility, boosting your profits.

Conclusion

If you keep these things in your mind carefully, you will be able to enter the BNB market and make safe investments in a secure way. Choose a method that suits your nature of investment. Just take note of the payment methods, fees, and the risks associated with BNB investments. Binance Coin is a promising token with various use cases and a number of opportunities to grow.

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