Trading the Binance Coin (BNB) token with a crypto broker
Using a Binance Coin (BNB) trading platform offered by a broker regulated by the FSCA is an essential step for investors wishing to gain exposure to the native token of a digital ecosystem. Before taking your first position on the markets, or buying the slightest asset, it is essential to understand how cryptocurrencies work and this complex technological universe. This complete guide aims to provide you with every piece of information needed to understand this market. This universe requires fundamental knowledge and involves risks. CFDs make it possible to gain exposure to the token without managing a digital wallet.
The story of Changpeng Zhao and the creation of the token
To understand the power of this asset, one must look at its origins. The story of the project is closely linked to that of its emblematic founder, Changpeng Zhao (often nicknamed CZ). The company was officially launched in July 2017.
To finance this large-scale project, the team resorted to a community fundraising, known as an Initial Coin Offering ICO. This process made it possible to raise the funds needed for the development of a digital services ecosystem.
- The beginnings on Ethereum: In the summer of 2017, the token was issued as an ERC-20 token. It then relied on the blockchain Ethereum (ETH). This ERC standard status allowed compatibility with existing wallets.
- Technological emancipation: In 2019, the company developed its own infrastructure, initiating a massive migration of tokens. This first technological iteration, initially named Beacon Chain, marked the independence of the network.
- The development of smart contracts: Faced with the rise of decentralized finance, the network evolved to become a blockchain network, offering a parallel technology capable of executing smart contracts with fees.
- The evolution toward BNB: Today, we no longer speak only of an exchange token, but of a native cryptocurrency driving a unified network (Build and Build), underlining its vocation to be a global infrastructure solution.
The complete ecosystem: from the Binance Chain Native Token to DApps
Trading this currency implies taking its ecosystem into account. The token has largely exceeded its status as a basic utility crypto. Today, the Binance Chain Native Token BNB (the native token of the chain) is the fuel of thousands of decentralized applications (DApps).
The advantages linked to the use of BNB
Historically, the first use case of this utility token was to pay certain transaction fees on services linked to its ecosystem. This incentive function created an immediate demand. Certain services of this ecosystem make it possible to settle fees with the token.
However, the advantages linked to the use of BNB have diversified thanks to the BNB network. This parallel network allows the development of applications in multiple sectors:
- Decentralized finance (DeFi): The token is massively used as collateral to borrow, lend or generate yields within automated protocols. Liquidity is often expressed in pairs such as the BNB USDT (Tether) on decentralized exchanges.
- The launch of new projects: Certain Web3 project launch programs may involve the temporary locking of tokens; their terms vary.
- The digital art and gaming market: The purchase and sale of NFTs (non-fungible tokens) on this network consume tiny fractions of the currency to pay the validators.
- Governance: Holding BNB tokens grants a right to vote on future updates of the network, thus conferring a community governance power.
Open a demo account today with RaiseFX. Practice your strategies on this ecosystem with a virtual capital in real time.
The economy of the asset: Total supply, burn and capitalization
To study the characteristics of the market, every trader must analyze the tokenomics (the economy of the token). At its creation, the total supply (also called total supply in the jargon) was set at 200 million units. No additional monetary creation is planned under the current rules.
The programmed destruction mechanism (Auto-Burn)
One element of the tokenomics of this BNB crypto currency is its combustion mechanism. The mechanism provides for the periodic withdrawal of a quantity of tokens from circulation.
The final objective is to reduce the circulating supply until only 100 million BNB remain. This mechanism provides for a reduction of the circulating supply.
Valuation and parity on the markets
The quotation of the asset (often searched under the query price of Binance Chain) is constantly scrutinized. Although a correlation with Bitcoin (BTC) is possible, the BNB the BNB (as some enthusiasts like to call it) has its own dynamic. Among the trading pairs are the BNB EUR (for markets denominated in euros) and the BNB/USDT for traders seeking to hedge in stable dollars.
Buying spot vs Investing via a CFD Broker regulated by the FSCA (RaiseFX)
To trade this asset, a question arises: physically holding the token or trading its value via derivative products?
Traditional platforms: physical purchase
Spot trading of Binance Coin implies holding the asset.
Holding Binance Coin spot requires a certain technical skill. You must set up a compatible wallet (digital wallet), keep a private recovery phrase, and expose yourself to the risks of computer hacking. Moreover, on the Spot market, results depend on the evolution of the price and on the applicable fees.
The advantages of the CFD solution with a broker regulated by the FSCA
As an investment services provider, RaiseFX offers another trading method. Our crypto platform and CFD allows you to trade the price of the token through Contracts for Difference. You can thus speculate on a rise, but also on a fall (short selling) during market corrections.
| Evaluation criteria | Spot platforms (Exchanges) | CFD broker regulated by the FSCA (RaiseFX) |
|---|---|---|
| Ownership of the asset | Physical purchase, requires a wallet | No wallet, synthetic exposure |
| Safekeeping of funds | Risk of hacking of the personal wallet | Safekeeping conditions specified in the documentation |
| Trading direction | Result linked to the price movement | Speculation on rises and falls |
| Execution fees | Variable trading fees and network commissions | Spreads variable depending on market conditions |
| Accepted deposits | Complexity varies depending on the country | Bank transfer, payment cards, etc. |
The trading process and placing an order
Access to global financial markets is offered via our infrastructure. Whether you are an expert looking for a new technical platform or an insider, the registration process follows several steps.
- Opening the account: Fill in the online form to join our platform. Our onboarding system follows the steps indicated during registration.
- Identity verification (KYC): In the interest of transparency and to comply with regulations, we verify the identity of each trader. This verification is part of our identification process.
- Capital deposit: Fund your balance by card or bank transfer. We accept various base currencies, notably the euro and the dollar.
- Terminal configuration: Open the chart of the asset (look for the Binance Coin ticker BNB).
- Risk management: Assess the risks associated with each position. CFDs can lead to rapid losses of capital.
- Placing an order: Determine your trading volume. Place a buy order or a sell order, and manage your position by always applying a Stop Loss (loss limitation).
The importance of regulation (MiCA focus)
The legal framework surrounding crypto currencies is evolving. RaiseFX is regulated by the FSCA in South Africa (FSP 50506). RaiseFX operates as a CFD broker under the regulation of the FSCA.
Log in to your RaiseFX trading area. Analyze the charts, draw your trend lines and study the price levels for your trading analyses.
Technical analysis, Proof of Staked Authority and Staking
The analysis of candlestick charts is the basis of short-term trading. However, to properly understand the evolution of the price, one must grasp the mechanism of proof (proof of validation) that runs the network.
Unlike Bitcoin mining, the Binance uses a consensus protocol called Proof of Staked Authority (PoSA). This hybrid system relies on a limited number of validators. To become a validator, an entity must carry out the staking of a colossal quantity of tokens.
These validators approve the data blocks and receive in exchange the fees paid by the users of the network. Holders of smaller amounts can delegate their assets to these validator nodes to receive a fraction of the rewards. Although we do not offer a direct staking service (our offer being focused on CFD trading), understanding this voluntary retention of liquidity helps to explain why the supply available on the open market is shrinking, and may influence the supply available on the market.
Factors that may influence the BNB price
The BNB price may react to the activity of its ecosystem, notably to the use of its applications and to the transactions carried out on its network. Technical developments, updates and service interruptions may also change market perception. These elements do not, however, determine on their own the evolution of the price.
The general context of digital assets, available liquidity and variations in risk appetite may cause movements in BNB. Regulatory announcements or changes concerning the services associated with the token are also likely to influence trading. A Binance Coin (BNB) trading platform may display prices derived from market data that change rapidly, without these factors making it possible to deduce a certain direction.
Reading the costs of a CFD on BNB
A CFD makes it possible to track the price variation of an asset without directly holding its tokens. The spread is the gap between the displayed buy price and sell price, and represents an element to take into account in the cost of a transaction. The margin is a sum required to open a position; it does not correspond to the maximum possible loss.
A position held beyond the day may incur overnight financing, calculated according to the terms of the contract and the holding period. The leverage mechanism amplifies both gains and losses linked to variations in the underlying asset. BNB does not pay a dividend as a token, but the terms of the contract may provide for specific adjustments or fees, to be consulted before any transaction.
Hours and calendar of quotations
The digital asset market generally operates continuously, including weekends and public holidays. The hours of a CFD on BNB may however depend on the calendar defined for the instrument and include pauses or maintenance periods. It is therefore useful to check the quotation hours indicated on the platform before following a price.
Economic announcements, network updates or events specific to the ecosystem may occur at any time. When quotations are suspended, a variation of the underlying asset may be reflected on resumption, with a gap between the last displayed price and the new price. The calendar and the trading conditions help to situate these periods, without making it possible to precisely anticipate movements.
Limit orders and stop orders
A market order aims for execution at the price available at the moment it is transmitted, which may differ from the last price consulted. A limit order specifies a maximum price on purchase or a minimum price on sale, but its execution is not guaranteed if the market does not reach this level. These types of orders correspond to different terms and must be understood before being used.
A stop order is triggered when the price reaches a defined threshold, then may be executed at the available price. In the event of high volatility or low liquidity, this price may deviate from the indicated threshold. The proposed parameters and the execution rules may vary depending on the CFD concerned.
Benchmarks for managing risk
The size of a position determines the financial effect of a price variation: the same fluctuation does not have the same consequences depending on the amount committed. To assess it, one must take into account the value of the contract, the required margin and the costs likely to be added. A simulation makes it possible to examine different scenarios without prejudging the real result.
A stop loss can help define a closing threshold, but it does not guarantee execution at a precise price, notably during a sudden movement. Diversification consists of avoiding concentrating all of one's exposure on a single asset or a single market factor; it does not eliminate the risk of loss. Monitoring open positions and understanding the conditions of the CFD are part of a risk management approach, without guaranteeing a given result.
FAQ on trading this digital currency
Yes, digital assets are also traded on weekends. You can open, adjust or close your CFD positions 24 hours a day, 7 days a week.
Traditional platforms: physical purchase can be carried out via an account on an exchange service, with conversion of fiat currencies (such as the euro) against the token. CFDs via our platform make it possible to trade the price without holding the asset in a digital wallet.
At its very beginnings in 2017, the currency was issued in the form of an ERC-20 token on the Ethereum blockchain to facilitate its launch. Today, the asset has its own computer network. Transaction fees (gas fees) may vary depending on the network and market conditions.
It is a programmed process where the founding company permanently removes a certain quantity of tokens from circulation (it "burns" them) according to the price of the asset and the volume of activity on the network. The announced objective is to reach a total supply of 100 million units.
The cash market (Spot) implies holding the currency, whereas CFDs make it possible to speculate on the evolution of prices. CFDs allow you to speculate on falling prices (short selling). The execution and safekeeping conditions are specified in the broker's documentation.
CFD trading carries a risk of loss. Consult the information on risks and the terms applicable to your account.
CFD trading carries a high risk of loss. Stop Loss orders do not guarantee closing at the requested price, notably in the event of high volatility.