If you are new to crypto trading, it’s very easy to get overwhelmed. Unlike what many believe, that trading cryptocurrency is all about buying and selling coins, there’s a bit more to it. Although cryptocurrency has more or less become synonymous with bitcoin, there are close to 900 cryptocurrencies and among the most popular is Binance Coin.
Binance Coin is a cryptocurrency on the Binance blockchain. The token was developed in 2017 and it serves as the blockchain’s main but not its only token. Binance is popular for being among the largest crypto exchanges in the world and also for being one of the main drivers of innovation in the field.
How Does Binance Coin Work?
The Binance crypto exchange is at the forefront of finding new ways to use blockchain technologies. Binance coin, therefore, exists to help run such projects. The token helps to finance all the processing power required to keep the high-maintenance blockchain up and running.
This is perhaps among the biggest reasons why Binance coin is worth investing in. It not only comes from an already established parent company, but it helps spearhead the advancement of blockchain technologies which many investors have their eye on.
How to Invest in Binance Coin
Investing in Binance Coin isn’t very different from investing in other cryptocurrencies. However, not all trading strategies apply for Binance Coin, primarily because it has fewer exchanges trading it. Nevertheless, here are several feasible strategies.
Buy and Hold
You can consider this the default investment scheme for cryptocurrencies. It involves making a purchase when the token’s value is low, then selling when the value rises. Binance coin thrives very well for such investments
IRA Investments
Another variant of the buy and hold strategy is the IRA Investments. Binance almost always has a stable price. That said, you can stake the token for a long period of time and this helps you earn more tokens. This makes it a good choice for things like retirement investments. The only downside about IRA investments is that not many investment companies are willing to perform such investments. But, you can always run the investment on your own.
Short-term trading
This may not be a very ideal strategy, but it still works. It may require a high skill level than the other two but you can get decent profits from it. You can also opt for its variant called day trading.
Leverage
This is a slippery slope strategy. While it mimics short-term investment, Leverage may not work for BNB. The sole reason for this is that BNB’s day-to-day fluctuations tend to be smaller than those of other, more volatile cryptocurrencies. This means you can end up losing money because of having very few changes in market prices that you can leverage.
Should You Invest in Binance Coin?
With Binance being one of the largest crypto exchanges it’s hard to think that an investment made on BNB can go wrong. As long as the exchange keeps doing well, putting your money on BNB should be a decent -too- good investment.
Although it may come with a few extra drawbacks compared to other cryptocurrencies, it is relative
Still, its relative stability and the promising future for both the company and its blockchain make it a good choice for crypto investors, both new and experienced.