A very difficult question for many of is, how do I determine the value of a coin?
And while there are many ways, I'm going to try something new today.
I will compare a coin and the business with an established company and the stock behind that company.
Since I have a financial background, I decided to compare one of the biggest exchanges of the crypto world with a global player in CFD ( contract for difference ) trading.
CFD trading is one of the most popular methods to do day trading and the CFD trading market has become a huge industry over the last couple years. It is to note here, that it is not legal to engage in CFD trading in the United States.
And even though there are a lot of differences between CFD trading and crypto trading, I could see a lot of similarities.
One thing that is very obvious is, that the platforms look very similar.
IG markets:
Binance
Both industries are also very compatible, with a lot of companies fighting over a very profitable market.
Something else I think is very similar is the expectation people have when going into this kind of platforms.
Day trading platforms, as well as crypto exchanges, advertise with quick profits.
So let's give you guys some information about IG markets
IG Markets is one of the biggest companies who offer CFD trading and is based in the UK.
The stock of IG group has a market cap of 4.06 billion USD right now.
The revenue in 2016 wasRevenue 671 Million USD
IG has been around since 1974
So how does this compare to Finance?
I'm focusing a lot on the market cap now, in order to determine how much potential there is for the BNB token.
Currently, the market cap for Binane is around 1 billion USD ( 03/03/2018 )
This means, If Finance would get a similar market cap to IG Markets, we would see the BNB token go up times 4.
The question, of course, is if Finance is able to establish themselves as strong as IG did over the last couple years.
With cryptocurrencies being such a huge new global market I feel like Finance will definitely be able to get to the size of IG Markets. Furthermore, I think Finance will eventually become the biggest exchange, which IG is not.
So what do I think is the future of the BNB token?
I think long-term we can definitely see it going up at least by times 8.
So why do I say that? I believe Finance will succeed the market cap of IG in the long term, therefore we will see at least a times 4 rise.
Furthermore, there is an actual value of holding BNB tokens, which is the discount on fees that you get by using BNB.
Another big reason is the token burn Finance is doing every quarter until 50% of the tokens are destroyed.
This is stated in their Whitepaper.
To summarize this a little bit, I think holding BNB is a good investment, and I'm sure we will see some more gains as there are more and more people coming into the market.
However, I'm not a financial advisor and therefore I hope all of you do your own research before investing.
That's it for today guys, hope you have a great weekend!
