Binance Coin (BNB) is becoming a hot commodity, as investors buy the exchange’s token to participate in token sales on Binance Launchpad. It traded at $6 at the time of the BitTorrent (BTT) token sale, and broke the $10 mark only days before the Fetch.AI (FET) sale.
Binance Coin has since solidified its position in the top ten. BNB tokens were worth just over $15 at the time of writing, almost a 150% increase in price in little over a month.
Experienced investors may be feeling a sensation of déjà vu: those now buying BNB are doing something similar to those who participated in ICOs in 2017, and bought Ether (ETH).
In a discussion with Crypto Briefing, Binance founder and CEO Changpeng Zhao (‘CZ’) admitted there were “some similarities” between Ether and Binance Coin. Both tokens, he said, are primary currencies that allow the holder “to participate in initial sales.”
But he also emphasized there were “some significant differences” and in his view, BNB and Launchpad will change token sales for the better.
Binance has a lot to offer token sales projects, CZ said. As well as support and assistance, Launchpad gives access to the wider Binance ecosystem. “We offer more comprehensive support to blockchain startups that bring transformative value to cryptocurrency adoption,” he wrote.
He added: “Projects can issue their tokens on the Binance Chain, which is more simple and less error-prone than writing a smart contract code, and a chance to list on Binance DEX–voted by the community.”
Launchpad has been a surprising success. The platform has hosted two token sales, BitTorrent and Fetch.AI, both hitting their multi-million dollar cap.
Fetch.AI sold out in a matter of seconds, and participants have so far made fourfold returns on their initial investments. Had it not been for a technical glitch, the fifteen-minute BitTorrent sale would have finished equally quickly.
ICOs didn’t die
Just two months ago, few people would have anticipated a resurgence in token sales. A high number of poor-quality offerings and a few bad actors destroyed trust in the sector; investors lost confidence in ICOs.
The ETH price fell at the same time as appetite waned. From $800 in May 2018, the Ether price bottomed out $80 by mid-December. A report found that demand was declining because fewer people were participating in ICOs.
It was unlikely that ICOs – or token sales – would be completely finished, even after last year’s performance. Crowdsales are still a popular route for projects to raise money. Security token offerings (STOs) are too exclusive for mass participation from retail investors, and utility token sales can work so long as they meet certain requirements.
It was simply a matter of time before investors began to participate in token sales again. Binance had the prescience to release its token sale platform on the cusp of this new trend.
Binance and Binance Coin have already been on a remarkable journey. If Launchpad can continue to host popular, successful token sales this year, BNB could become the new, improved Ether of 2019.
The author is invested in digital assets, including ETH and BNB which are mentioned in this article.