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Binance USD: Should you Invest in this Stablecoin?

Have you traded Bitcoin BTC and other cryptocurrencies through Binance cryptocurrency exchange? If yes, you must have come across Binance USD or BUSD already. It is one of the most popular token pairs the Binance cryptocurrency exchange offers to its users who are buying and selling cryptos on the platform. 

But what is BUSD? It is nothing but a digital version of the US Dollar, pegged at its value. If that is the case, why not use US Dollars instead? Why should you buy Binance USD coins or other stablecoins? These are some of the frequently asked questions about BUSD. 

Let me walk you through the various aspects of BinanceUSD BUSD so that you can make a choice whether you should buy this stable coin.  

What is BUSD (Binance USD)?

Paxos and Binance founded Binance USD or BUSD. Blockchain technology has been used by Paxos for offering their Stablecoin as a Service to other companies. Paxos had earlier created PAX Gold (PAXG), which is a gold-backed stablecoin. Both the Binance USD (BUSD) and PAXG tokens are regulated by the New York State Department of Financial Services. 

Technically speaking, Binance USD can be defined as fiat-backed stablecoin, maintaining a US Dollar peg. US$1 = total BUSD supply held in Paxos, which works as BUSD’s reserves in the US banks that are insured by FDIC. The price movement of BUSD mimics that of the US Dollar. 

BUSD provides 3 major attributes to transactions and they are:

  1. Accessibility
  2. Flexibility
  3. Speed

You can buy BUSD with the help of either fiat gateway services or the cryptocurrency exchange of Binance. In fact, you can also send US Dollars to Paxos for minting new Binance USD tokens for you. 

This stablecoin gives you the flexibility to quickly turn your holdings into a stable asset without even have to move off the blockchain. With nominal fees, you can send money quickly around the globe. 

Binance USD token exists on 3 different blockchains:

  1. Ethereum
  2. Binance Smart Chain
  3. Binance Chain

On the basis of specific needs, holders of BUSD coins can swap their tokens between blockchains. You can either do it through Binance Bridge or on the Binance exchange at the time of making withdrawals.

Binance USD Coins (BUSD): Facts & Figures

All these facts and figures will help you to make a decision on investing in BUSD:

  • BUSD cryptocurrency current price: US$0.9999 (as of Oct 6, 2021)
  • Trading Volume (24h volume): US$7,422,515,890 (as of Oct 6, 2021)
  • All-Time High (ATH) Price: US$6.29 (reached on Jun 14, 2021)
  • All Time Low (ATL) Price: US$0.8861 (reached on Mar 13, 2020)
  • 24h Low: US$0.9992 (as of Oct 6, 2021)
  • 7d Low: US$0.9991 (as of Oct 6, 2021)
  • YTD (Year-To-Date) Return: -0.01% (Jan 1, 2021 to Oct 6, 2021)
  • Market Cap: US$13,055,758,596
  • Crypto Rank (in terms of market cap): 14
  • Fully Diluted Market Cap: US$13,056,094,953
  • Max Supply: ---
  • Total Supply: 13,059,492,391
  • Circulating Supply: 13.06 billion BUSD

How Does BUSD Work?

The exchange rate of 1 BUSD stablecoin is 1 USD from the reserves. When you send 1 BUSD to Paxos, they’ll burn your token and in return provide you with USD fiat currency. This mechanism maintains the supply and reserves at a constant ratio of 1:1. 

It may happen that the BUSD price starts to fall below the US$1 per 1 BUSD. In that case, arbitragers will find the arbitraging opportunity and therefore would purchase large quantities of Binance USD tokens. Even if the price of USD falls to US$0.98, it could give rise to arbitragers in making a very high risk-free profit. Once they buy huge quantities of BUSD coins, they can use the Paxos platform for converting the tokens to fiat currency. When this happens, the demand for Binance USD coins will rise. This will, in turn, increase the token price back to US$1, thereby restoring the 1:1 peg. 

What are the Reasons for Cryptocurrency Traders and Investors to use BUSD?

There are multiple reasons for cryptocurrency investors and traders to use Binance USD BUSD. They are:

  1. Crypto traders and investors buy BUSD to avoid the volatile price fluctuations seen in the cryptocurrency market. 
  1. Crypto traders and investors buy BUSD to lock in profits without having to convert them to US Dollar fiat currency.
  1. BUSD provides traders with excellent arbitraging opportunities to make risk-free profit.

Where to Buy Binance USD Coins (BUSD)?

  • You can buy BUSD through any cryptocurrency exchange (such as Binance exchange) by using bank account transfer, credit card, and debit card. Multiple trading pairs are available including US Dollar. So, check the USD price, Binance USD price, and others before you purchase BUSD. 
  • You can also visit AMM and swap another token for Binance USD tokens in a liquidity pool. 
  • Visit Paxos website for directly converting US Dollars to BUSD coins.

Where to Store Binance USD (BUSD)?

You can store BUSD on any ETH compatible wallet as it is on the Ethereum network (ERC-20) such as Ledger or Trezor (by connecting to MyEtherWallet or MyCrypto). Here are some popular crypto wallets where you can store BUSD coins:

  • Ledger Nano S
  • Trezor One
  • Exodus
  • Coinomi
  • MetaMask
  • Trust Wallet
  • Ledger Nano X
  • Trezor Model T
  • imToken

Invest in Binance USD BUSD and Other Cryptocurrencies

You can buy and sell Bitcoin Cash (BCH) and other cryptocurrencies against various fiat currencies (US Dollar USD, British Pound, Canadian Dollar CAD, South Korean WON, Singapore Dollar, Chinese Yuan, Hong Kong Dollar, etc.) through a wide array of crypto exchanges (centralized or decentralized exchanges), crypto APIs, and bitcoin cash markets. Use Dollar Cost Averaging DCA strategy to invest in cryptos to minimize the risks associated with high volatility. 

If you want to increase your investment explosively in the coming 5-to-10 years, buy crypto coins now. Keep an eye on the market news, price statistics, block times, blockchain news, and others to time your trading of Defi protocols and tokens for maximum profit. 

You can also diversify your crypto coin portfolio by including other cryptocurrencies such as BCH, BTC, AAVE, Ripple XRP, Bitcoin Ether ETH, Bitcoin Gold (also called Bit Gold), Bitcoin Cash BCH, Basic Attention Token, Ethereum Classic, Binance Coin, Wrapped Bitcoin (some also call it wrap bitcoin or wBTC), USD Coin, Gemini Dollar, ERC20 tokens (created on Ethereum blockchain), nonfungible tokens NFTs, and others. 

Also, invest in various types of stocks, mutual funds, index funds, real estate, and others to improve your personal finance. If possible, get help from a portfolio manager or wealth management firm for maximum return. 

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