Binance coin (BNB) increased in value by more than 1,000% in 2021, and is consistently in the top 5 cryptos by market cap. Like most other top cryptos, its value sank during May’s big crypto crash, though BNB has seen some recovery since then.
Experts attribute this to the growth of the BNB Smart Chain blockchain network, which enables users to build digital assets and decentralized apps. BNB originated on the ethereum blockchain and is the native currency used on the Binance and Binance.US exchanges. You can use BNB to pay for trading fees and other transactions on the Binance chain.
Despite its top market cap position, BNB lags far behind bitcoin and ethereum according to NextAdvisor’s Investability Score. As the top two and most established cryptocurrencies, bitcoin and ethereum are considered to be better investments thanks to their longer track records and long-term value growth, among other key factors. Here’s how Binance coin compares:
| Coin | NextAdvisor Investability Score |
|---|---|
| Bitcoin | 80/100 |
| Ethereum | 68/100 |
| Binance Coin | 49/100 |
BEFORE YOU INVEST
Cryptocurrency is a highly volatile, speculative investment. And altcoins like BNB amplify the volatility and risk. Only invest in crypto what you’re prepared to lose, and make sure you have other financial priorities in place first: save money in an emergency fund, contribute to retirement savings, and pay off any high-interest debt balances.
Steps to Buy BNB
You can purchase BNB on any crypto exchange that offers the coin. Experts recommend exchanges that have a high level of security, many users, and which are simple and easy to use. Each exchange has a different funding mechanism, but generally you will need to fund your exchange account through a transfer of fiat currency, like U.S. dollars, in return for the amount of Binance coin desired.
Find a Cryptocurrency Exchange
Along with BNB’s homebase, Binance.US, you can buy BNB on Crypto.com and eToro — two top mainstream crypto exchanges. While Binance.US offers lower fees than other exchanges, its lack of transparency about security and history of regulatory issues in the U.S. are reasons to consider using other exchanges.
Fund Your Account
To fund your account on an exchange, you must designate a funding source based on the exchange’s specifications. This could include connecting a credit or debit card, or linking to your checking or savings account. You may see restrictions for minimum and maximum purchases, or other requirements and limitations based on the coin and exchange.
Place an Order
Once you’ve funded your account, you can place an order. Each exchange has a different order process, so you’ll want to make sure you can use whatever method the exchange requires.
Storing Your Binance Coin
As with any tokens, you may opt to store your coins in a cold or hot wallet. A cold wallet is a physical device that keeps your cryptocurrency completely offline, whereas a hot wallet is a form of digital storage that you can access on your computer or phone.
Both types of wallets have their good points and their issues. Cold wallets are more protected from hacking as your assets aren’t always linked to the internet, but you could lose access to your funds if you misplace your wallet or forget your security information. Hot storage wallets face security risks such as being hacked, or other common problems that can affect websites such as software glitches.
What Can You Do With BNB?
As BNB is the native token for the Binance exchange, you will get a 25% discount if you pay for trading fees with it. You also have other options for using BNB off the exchange, such as booking travel accommodations with Travala, and sending payments to friends via decentralized messaging app Adamant Messenger.
Best Wallets for Holding Binance Coin
When you choose a crypto wallet, you want to make sure it supports the coins you’re holding, offers strong security to protect your funds, and makes it easy for you to access your funds. Below are three such wallets that are ideal for BNB token holders.
Exodus
Exodus supports more than 180 coins, and you can transact from within the wallet, so no need to go to an outside exchange. You get to keep all your crypto in one place while plugging into different exchanges, and you can connect directly to other users through the built-in exchange. It might be slightly advanced, but you may enjoy the options to navigate exchanges and coins more freely.
You can select a desktop, mobile, or hardware wallet, depending on your security preferences. The hardware option is a Trezor wallet integration, meaning a Trezor wallet with an Exodus hot wallet running on it.
Exodus at a Glance
- Self-custody
- Hot storage and cold (with Trezor integration)
- Number of supported coins and tokens: 180+
- Costs: Free, but transaction fees may apply
Trezor Model T
The Trezor Model T is among the best cold wallet options, experts say. You’ll see a $280 price tag, but the Model T has numerous standout features including a large, full-color touchscreen display, and add-ons like Shamir Backup, a Trezor-designed security standard only available for the Model T. The Shamir backup lets you create 16 recovery shares to use as backups. A recovery share is basically a way to recover your seed phrase.
The Model T is physically robust and tough, at least in appearance, plus it’s user-friendly, intuitive, and easy to set up.
Trezor Model T at a Glance
- Self-custody
- Cold storage
- Number of supported coins and tokens: 1,816
- Costs: $280
Ledger Nano X
If you want the security of a cold wallet but not the price tag of a Trezor Model T, the Ledger Nano X is a solid choice at $149.
The Ledger Nano X is a top choice among crypto experts. And it doesn’t need to be plugged in, thanks to Bluetooth. The Nano X supports a lot of tokens and coins, and up to 100 apps. It’s a good move if you’re an active investor with interest in a range of different cryptos.
The Nano X’s most remarkable security feature is its Secure Element security chip, which is similar to what is used to secure credit cards. And the chips are even certified by the Common Criteria EAL5+ process.
Ledger Nano X at a Glance
- Self-custody
- Cold storage
- Number of supported coins and tokens: 5,500+
- Costs: $149
Is BNB Worth It?
Investing in cryptocurrency comes with a fair amount of risk, as exemplified by the recent downturn in the crypto market. But given BNB’s strong gains last year and increasing moves back up after the crash, this could be a good addition to your portfolio.
BNB has a variety of use cases, and is a “solid” coin says Tally Greenberg, head of business development at hosting and staking platform Allnodes.
The token may be an attractive investment for many, but the Binance.US exchange comes with some issues, such as a history of regulatory scrutiny. While the platform has “a lot of opportunities for investors,” says Greenberg, such as a tax portal, staking rewards, and low fees, it has some problems.
“There’s a real barrier to entry on the user experience side,” says Phil Haymes, VP of product development at Exodus.io. “It assumes that you know how to trade and you know what all the charts mean. You’ve got to be pretty good to use that thing. There’s a friction point there.”
We don’t recommend Binance.US for beginners, due to regulatory issues and lack of transparency about security. We’ve reached out to Binance.US on multiple occasions in recent months for comment on these issues, but have not received responses.
History of Binance and BNB
Binance is the largest exchange by trading volume, and it was founded by Changpeng Zhao in 2017. The platform stopped accepting U.S. users in 2019. Binance.US was then started in partnership with the Financial Crimes Enforcement Network (FinCEN)-registered BAM Trading Services to comply with U.S. regulations.
Both Binance and Binance.US have faced legal challenges, though a spokesperson for Binance.US told us in 2021 that they operate separately. Recently, the Securities and Exchange Commission (SEC) has started investigating the relationships between Binance.US and two firms owned by Binance founder Changpeng Zhao, The Wall Street Journal reported.
