Binance the #1 Crypto Exchange & Who could be next?
I wrote my first article about BNB when the currency was trading only at $5 and Binance has continued to grow exponentially since then. Now it is trading around ~$21 and after an amazing return and I still estimate that BNB could easy reach $50 in Q1 2018.
I consider Binance the JP Morgan of the Crypto World.
3 Reasons why I estimate BNB could reach $50 in the Q1 of 2018
- User growth
Binance has experienced an incredible growth in the last weeks and this is one of the reason why the BNB also jumped in price.
The exchange just reopened user registration after a couple of days of soft close because of high demand. The demand from new users was so high that it made Amazon Web Services collapse. Yes, Binance also use Amazon for their servers like Netflix does.
The market shows no sign that this rise on demand will slow down. I don’t think demand is going to stop and the trend should continue. They have a superior and friendlier exchange than the competition.
In the figure below you can see how Binance now leads in terms of volume of Bitcoin but you can check for every major crypto currency.
2) Burning BNBs
As I explained in my previous article, Binance is using 20% of its profit every quarter to burn BNBs. Although is the quantities that they are burning is still very low, it is a measure of how profitable they are and how fast they are growing.
Other great articles were published and a recent announcement that a temporary ban on new user has helped the price to rise faster.
Watch the CEO of Binance burning 986,000 coins or 0.493% of the total coins:
It will be very interesting when they announce the next number of coins.
3) Valuation matters
By doing simple math current Market Cap of BNB is:
Shares x Price = Market Cap
= 200mm x $21 = $4.2bn
Please notice that I am using 200mm of coins since this is the total amount issued. Coinmarketcap only uses 100mm.
There is a lack of public records or valuations to use them as a comparables.
As a comparison, Pirvate company Coinbase is calculated to be worth between $2 and $3bn. Public company E*Trade Financial is worth $14.4bn.
Remember how in the last Q they burned 986,000 coins? at today’s current price that would be aprox. $20.7mm and this is the 20% of the profit so profit in the quarter was ~$100mm. Using this numbers, we can assume that they will earn $400mm in the first year (Profit in the first quarter x 4).
A company with $400mm in profits per year we can be assigned a multiple of 15x, getting to a Market Cap of $6bn and we just did this calculation using the profit from the first quarter and assuming 0 growth for the company.
Who’s next? Coinmetro
The growth of Binance has gone unnoticed. Other projects quickly emerge as a result. So far the more compelling and interesting opportunity in my view is Coinmetro. They just finished they pre-ICO Sale in less time than scheduled and they are going to start the ICO Sale the 21 of February.
Coinmetro can quickly become one of the Top 5 exchange around the world based on futures that they are developing:
- Trade Alts against USD or EUR (fiat currencies): you are going to be able to trade directly against USD or EUR. Like you do in Coinbase or Gemini (this is one of the major disadvantage of Binance because you can only trade against other cryptos).
- Strong User Demand for exchanges: major exchanges are soft close right now, they are probably going to be open for new users when Coinmetro opens but this speaks about the momentum and the strength of the demand for new users
The Coinmetro Team also published a encouraging article highlighting the difference between both exchanges.
Mark your calendars: 21 of February the ICO Sale starts. In the meantime make sure to join Coinmetro Telegram Channel for updates and questions
You can also download the detailed whitepaper and read the Bounty Thread, ANN Thread and join the Telegram group.
Disclaimers
I bought/hold BNB
The link to Binance has my referral code
Binance didn’t pay me or ask me to write this post
