BNB - Still worth Buying? Or should be looking for the next DEFI coin already? (Rune/ Leo?)

You may have missed out on getting in early, or at least early-ish on BNB, but is it still worth buying even now, now that it seems to have taken a breather around the $300 mark?

Unlike so MANY other coins, there is a pretty straightforward use case for BNB - it powers Binance Smart Chain (Bsc), the cheaper, albeit more centralised alternative route into DEFI - which allows you stake several (binance wrapped) versions of coins in vaults or pools to earn interest, in various DEFI tokens run on Bsc.

For an overview of the opportunities see this post by @dalz.

The BNB price could easily carry on going up

Because BNB powers the Binance Smart Chain you need to spend it every time you make a transfer, stake, harvest, or withdraw tokens from one of the several DEFI projects on offer.

And it is several times cheaper than Ethereum, which means it's much easier to make more transfers and pool and re-pool your assets at shorter notice, unlike with Ethereum where frankly I'm scared to do anything with less than $1000 and once I've pooled something, I kind of feel like I've got to leave it alone for several months or I'll lose all my gains in gas fees.

in short, you can actually use Binance Smart Chain because of the lower fees!

And with all the pooling competition (just see pancakeswap as an example) this creates more pressure to move around coins to get the best return - keeping the use of BSC high.

It's simply the cheapest and easiest way to make a return on all the BTC/ alt coins you've got lying around.

BNB in particular just seems very well positioned at the moment to take some of the market away from ETH going forwards into 2021.

On top of this Binance has a buy back and burn scheme with the profits it makes - there are currently 170 million in circulation, and there's another 70 million going to be burned, last quarter they burned 3 million BNB. That's around 1.5% the entire supply in a three month period.

And there are some very good returns ON BNB - locking them up in pools.

And of course it's worth holding SOME - because you need it for fees!

Factors that could keep the price down

There will be a limit to how far the price can pump - the price you pay for transactions is in BNB - so it might be 10 cents for a transfer now, but if it trebles in price - that's 30 cents - meaning eventually transactions will decrease, and so will the capacity for an ever increasing price.

People may be put off by the more centralised nature of BNB - it's not Ethereum, and in the longer term I imagine ETH 2.0 is going to blow this out of the water.

Other competition which could overtake BNB, for stake and return purposes, are RUNE and even HIVE/ LEO if we could sort DEFI out here.

Rune has the huge advantage of your not having to wrap tokens before staking, or at least it will once it launches proper - middle of this year hopefully, and if we could just get DEFI on this platform - no fees!

Final thoughts

I'm undecided as to what my strategy is going to be with BNB - I'm certainly NOT selling what I've got at the moment, I will probably keep an eye on the price and IF it's dipped when I sell some of my harvested coins, buy a little more, if it's on a tear at the time just go buy whatever else looks like it's a bargain!

TBH I can't predict what's going to happen to the price in the long term - I don't think it's a long-term sell - BNB kind of screams to the public 'come buy me' - it's like it is now set to be the public face of crypto with its link to the Binance exchange - even though I guess to the decentralist crypto purists it's a bit of a no-no!

At the end of the day, my heart says 'buy more Rune' my head says 'this BNB shit is going beyond Ethereum'.

Maybe I should do a Rune BNB pool?

Why is it that whatever crypto dilemma I have these days I seem to come up with 'pooling' as the answer to that dilemma.

Posted Using LeoFinance ^Beta