Binance is the largest crypto trading platform in the world by daily trading volume. It has about 30 million global users and spends tens of billions of dollars in daily trading transactions. The company was founded in 2017 and was first based in China until the Chinese government regulated the crypto industry. Binance is now based out of the Cayman Islands and is still under the control of its founder and CEO, ChangPeng Zhao. Can I buy Binance stock?
Table of Contents
- What Is Binance?
- Other Crypto Stocks to Buy
What Is Binance?
Binance itself is a global platform that is used in over 140 countries around the world. To make matters confusing, Binance is used in every country except the US, where BinanceUS is used.
Why did the company spin off the American side of its company in 2019? First, you might wonder if it is the same thing that the Chinese social media company, TikTok, did.
Crypto asset and security regulations in the US are stricter than in other countries.
Rather than change its entire platform to accommodate Americans, Binance created an entirely new platform for American use. Can I buy Binance stock?
Can I Buy Binance Stock?
As of right now, you cannot. Binance and BinanceUS are privately owned and do not trade on any stock market. But that does not mean it will stay this way forever!
BinanceUS just completed another round of funding, receiving $200 million. This gives BinanceUS a pre-money valuation of $4.5 billion as the company prepares for an IPO shortly.
CEO ChangPeng Zhao, or CZ as he is known in crypto circles, confirmed that BinanceUS would seek an IPO in the next couple of years.
Investors who want to buy shares of BinanceUS won’t have to wait much longer. But they should know they will only invest in BinanceUS and not the entire company.
BinanceUS does a respectable 24-hour trading volume of about $306 million on average, but it pales in comparison to the performance of the global parent company.
The dynamic between Binance and BinanceUS is interesting. Aside from having the same owner in CZ, the two platforms have very little in common—other than that; they are not affiliated in any way except for using the Binance name.
BinanceUS is not an affiliate or subsidiary, so Binance won’t benefit much from having the American segment go public. BinanceUS is a more limited version of the global Binance platform, and part of the money raised from going public will be spent on getting the app up to speed with other crypto platforms in the industry.
Will Crypto Companies be Regulated in the US?
It has been on the radar of the US government, the SEC, and the Federal Reserve.
While most other countries have treated cryptos as an asset, the US is considering regulating the industry.
Could this have an impact on BinanceUS? Of course.
If the regulations are not investor-friendly, we could see a mass exodus in the US. On the other hand, other major countries like China and India have regulated their crypto industries to some extent.
Some in the industry believe that the crypto world has grown too large and that the US is late with regulation. Others believe the US is attempting to create its stablecoin to track the US dollar.
Whatever the case, the concern for regulation hangs over the US crypto industry. It’s one of several risks in investing in a crypto exchange today!
Can I Buy Binance Stock or Invest in a Crypto Exchange?
It’s a valid question at this point, given how easy it is for anyone to invest in crypto assets. So why buy crypto exchange shares instead of just the cryptos themselves? The first reason is simple: crypto assets are far more volatile. This is somewhat of an old myth, especially about Bitcoin or Ethereum.
The blue-chip cryptos are not as risky as they once were. They can still be subject to volatile price action, but there isn’t as much chance for these projects to go to zero. Of course, it depends on which cryptos you invest in, but any of the big ones are about as volatile as trading stocks these days.
Buying shares of BinanceUS or any other crypto exchange is an investment in the company, not the industry. Of course, the industry certainly impacts the company and its ability to attract users. But buying stock in a publicly traded company is specific to that business.
If you believe that BinanceUS can succeed in the future, regardless of the crypto industry, you will likely see it as a good long-term investment. This is because crypto exchanges profit from transactions and trading fees to continue making money in any market.
Finally, an investment in BinanceUS is an investment in the future of digital assets. As many crypto opposers as there are, there seem to be more supporters nowadays. From retail traders to Fortune 500 companies, nearly everyone is getting exposure to cryptos in some form. From DeFi to NFTs to crypto gaming, the future of cryptos is bright, and exchanges are at the heart of the industry.
Coinbase (NASDAQ: COIN)
The single largest US-based crypto exchange, Coinbase, has traded publicly since April 2021.
Coinbase is widely used across the world, and it is the most popular exchange for US traders.
With 89 million registered users, Coinbase has a large share of the US crypto trading market.
The company also recently launched its NFT marketplace to compete with OpenSea in another booming industry. Coinbase is down by over 55% since its IPO and nearly 70% since its all-time high price of $429.54 per share.
Can I buy Binance stock? Nope, but you have other options.
Robinhood (NASDAQ: HOOD)
We all know Robinhood from its role in the meme stock short squeeze in January of 2021. Robinhood also has an extensive crypto trading platform for users, although it pales compared to the scope of Coinbase or Binance.
Shares of Robinhood are down just as bad as Coinbase, with a 67% loss since its IPO. Robinhood recently became one of the first trading platforms to extend its trading hours. While crypto markets trade 24 hours daily, Robinhood wants to allow equities trading after the session closes.
Block (NYSE: SQ)
Block is known for its payment systems, and Cash App platform millions of Americans use daily. Unlike Coinbase and Robinhood, Block is not a brokerage or trading exchange. However, it does allow users to buy, sell, and hold Bitcoin in their digital Cash App wallets.
Block has even added features so users can instantly convert paychecks into Bitcoin. It has also added a top-up service to round payments up and use the extra funds added to the total to convert to Bitcoin.
This is all tied into CEO Jack Dorsey’s strong belief in a digital economy that Bitcoin can support. Of course, Block isn’t an exchange, but there are not many companies as bullish on cryptos for the future.
Silvergate Capital (NYSE: SI)
Silvergate Capital is a small bank in San Diego that has been changing how traditional banks think about cryptos. The company has created a long list of products for its customers to invest in, including cryptos and other digital assets.
Silvergate is leveraging its patented digital trading software and offering its banking APIs to other websites. It started investing in digital assets in 2013 and has been profitable for 13 years.
Is BinanceUS a Good Investment?
If you need further proof of mainstream acceptance, look at legacy banks like Goldman Sachs and JPMorgan entering the space. Even as recently as five years ago, the thought of these companies entering such a nascent industry would be mindblowing. Likewise, crypto exchanges like Binance or Coinbase were a fraction of their current size.
The growth of the industry has been staggering. Last year, reports revealed that nearly 30% of American parents have invested in or traded cryptos. When we expand this further, over 60 million Americans are exposed to digital assets.
Cryptos are no longer a fringe investment vehicle. With rising inflation and legacy banking system inefficiencies, cryptos are favored by the first generation of the population raised by computers and digital systems.
Can I buy Binance stock? Not yet. However, BinanceUS will likely be an excellent investment when it goes public in a few years. While stocks like Coinbase have struggled, it has been more of a case of succumbing to a market correction than poor company performance. The future of mainstream crypto trading will rely on these centralized exchanges, and the Binance brand is the most prominent in the world.