Binance Coin has always been an asset of particular interest to us.
Unlike other altcoins, this is a currency that is operated by a group of individuals that have access to one of the largest pools of liquidity in the market.
For us – it puts us in a place that allows us to feel at ease when positioned in this currency, since its operators are not likely to use it as a direct financial lifeline for themselves.
Because of this, we view Binance Coin as one of the safest options in the market.
Which is why when we buy BNB, we buy A LOT of BNB.
You have to realise what an altcoin is.
It is simply a vehicle that is used by developers to accumulate Bitcoins, which is in turn used to accumulate fiat.
That is the sole purpose of an altcoin – despite what you have read in some whitepaper or heard come out of a developer’s mouth.
Altcoins are pumped and dumped for the sole purpose of collecting as many bitcoins as possible.
The same is true for projects such as Ethereum, and others.
In short, the only time an altcoin is useful is when you’re selling it for Bitcoin.
However….. Binance coin is a little different.
Binance’s Value Extraction Phobia
As mentioned previously – its operators control one of the largest exchanges in the market.
Their daily income from sources other than BNB is large enough to assume that they do not ‘need’ to continuously pump and dump the currency in the same manner as other developers.
Additionally, the owners of the Binance exchange are very conscious of brand reputation. They manage their image and reputation very strictly.
The entire facade of their company is one that is based on competence, trust and reliability.
This extends to their currency.
They have attached their brand name to it.
If there were to be any foul play – public scrutiny will rise to an all-time high, and Binance is obviously fearful of this.
Just look at the chart.
This is a company that is so focused on maintaining a positive public image that they are clearly afraid to engage in value extraction.
BNB has essentially moved in one direction since 2017. This is a two year bull run.
There is virtually zero spread between the Bid and Ask, which is usually cue for developers to begin rapid value extraction. Which Binance is doing, but – in a very slow and gradual manner.
We like BNB. But we’re no fools, we know full and well that the operators of Binance most certainly control a string of other assets that they play more loosely with.
However, BNB is used as the native currency for their exchange.
Because of this, we look at BNB as a VERY safe asset.
There is no room here for foul play.
The stability of their exchange rests on the ability of Binance to continue to prop up the value of BNB.
For now, there’s no obvious reason as to why they can’t continue to do this.
Taking Profit Off The Table
Obviously BNB will eventually experience intense value extraction– but, overall, this currency seems poised to continue northward, at least until the price of Bitcoin begins to take flight.
In any case – any form of major value extraction by Binance, will be done in a gradual manner so as not to raise alarms.
In fact, judging from the way they have been managing BNB up until now – I’d be surprised if they don’t send out emails and put out carefully worded press releases before engaging in major value extraction.
For now, we’re completely out – but, will continue to keep a very close eye on BNB
With everything said, it’s difficult to deny that this a top 5 asset.
Unlike other available assets it’s a very solid currency, with a solid foundation.