Should Crypto Traders and Altcoin Investors Go Short or Long on Binance Coin?
Binance Coin (BNB) became one of the top 10 digital assets in the market when it experienced several weeks of continuous growth. It was also helped by the fact that users will be able to participate on the Initial Exchange Offerings (IEOs) conducted by the platform according to the number of BNB coins held over a specific period of time.
There are some analysts that have been talking very positively about BNB and how it could keep growing in value and scale positions in the space. However, there are other experts that believe that the digital asset has not so positive future ahead.
Binance Coin A Good Or Bad Investment For The Long Term?
Binance Coin is now one of the largest virtual currencies in the market and it became one of the best performing digital assets since the beginning of the year. Nonetheless, according to the founder of the cryptocurrency venture fund 1confirmation, Nick Tomaino, it is the correct time to short the asset.
Indeed, since the year started, Binance moved from $6 up to $17.3, which represents a price increase of over 187 percent. Since its bottom, BNB expanded even further.
During the last days, Bitcoin (BTC) has been moving and behaving very positively in the market. Binance seems to be taking moves contrary to Bitcoin. In the first part of the year, Bitcoin operated relatively stable until April. Binance Coin increased its price in the same period of time as Bitcoin operated stably. Now that Bitcoin surged, Binance coin remains stable.
Tomaino is a former Coinbase employee. He said that sorting virtual currencies is a losing game, but Binance Coin was the only to succeed in this. He mentioned that the business model of “regulatory arbitrage” and the “minimal” KYC requirements.
Shorting cryptocurrencies is a losing game. But if I had to short a cryptocurrency right now, it would be Binance Coin. Here’s why (from my western bias):
— nicky.eth (@NTmoney) April 4, 2019
Tomaino explained that Binance captured a large capitalization of the market because it offered a large number of trading pairs, minimal KYC and trading limits. He also thinks that Binance is not pushing the market forward in any meaningful way and that the user interface is worse than other decentralized exchanges.
Bullish individuals in Binance Coin are those that believe that Binance will continue growing in the market and that it will keep the market share that it currently has. At the same time, Tomaino said hat BNB bulls are closely following the development of the decentralized exchange (DEX) being developed by Binance.
In order for the firm to be able to maintain the market share that it currently has, it will have to add fiat onramps and attract new institutional investors to its platform. Due to their regulatory approach, it is difficult to work with banks and other institutions that could help the company expand.
On the matter, Nick Tomaino wrote:
“But a DEX is a completely different product and investing at over $1 billion market cap BNB today for a product that doesn’t exist feels like a bad risk-adjusted bet.”
Finally, from what I can tell the community of Binance Coin holders doesn’t stand for much beyond making money. At the end of the day a community of believers is what gives cryptocurrencies value. Something tells me BNB holders will be on to the next money making opportunity soon
— nicky.eth (@NTmoney) April 4, 2019
Dovey Wan, founding partner at Primitive wrote that there are several exchanges, that can be compliant or not, and that are taking similar measures as Binance, including aggressively listing new assets, minimal KYC and more. Some of these exchanges are Huobi, KuCoin, and Upbit.
As Wan explains, Binance success is related to the distribution of NEO gas when there is no one else that can do it. This means that the platform has attracted a large number of EOS holders. At the same time, she mentioned that they have a “world class customer support,” real trading depth, and more.
Finally, she mentioned that BNB holders place their trust in Changpeng Zhao, the CEO of the platform and the team behind it. This is similar to what people and Tesla feel when they see Elon Musk and his team.
At the time of writing this article, Binance Coin has a market capitalization of $2.69 billion and it is the 7th largest cryptocurrency. Each BNB coin can be purchased for over $19.