I remember the first time I wrote about BNB in the public account "Xiabibi's Bitcoin World" was on July 25, 2020, four years ago. It has been almost exactly one bull-bear cycle since then. The title was "BNB is on the road to a market value of 100 billion US dollars". At that time, the price of BNB was around US$17, and the market value was around US$2.7 billion. Looking back at the trend of BNB in the past four years, the market value exceeded US$100 billion in May and November 2021 (the highest price of BNB was US$676), and then went through the bear market with a market value of US$31.6 billion. Recently, it has risen back to US$89 billion, approaching US$100 billion again. The previous round of price predictions for BNB have basically been realized.
Looking ahead, let’s make another prediction about the price of BNB in the new bull market! First, let me give you the conclusion. I predict that the high point of BNB price in this bull market will reach 2,000-3,000 USD, corresponding to a market value of about 300-400 billion USD, which is the current total market value of ETH (not to say that BNB will exceed ETH, because ETH will also rise). Next, let me talk about my general logic, mainly from two perspectives, the logic of the currency circle and the logic of the product.
Based on the logic of the currency circle:
Considering this matter from the logic of the currency circle, returning to the essential question, what is BNB? I have analyzed it in previous articles. BNB is a very unique type of token, which can be regarded as a complex. It is a platform token, a native token of the public chain (L1 and L2), and a native token of the storage chain (BNB greenfield). These angles can be used to value BNB, and there are corresponding benchmarks. However, among these roles, BNB still has the largest role of platform token. The most typical one is that BNB can be used to deduct transaction fees, and holding BNB to participate in Launchpad will obtain continuous new issuance income.
The author clearly feels that since November 2023, Binance has accelerated the frequency of Launchpad listings. So far, there are an average of 2 to 3 Launchpad listings per month (compared to 2 to 3 launchpad listings per quarter in the previous bear market). As a BNB holder, I am very happy to participate in every new coin issuance activity. I have also roughly calculated that the single yield is basically 1.5% to 2.0%. According to this frequency, there are 2 Launchpad listings per month, so the approximate yield for 12 months a year is 36% to 48%. If we look at it according to the traditional price-earnings ratio, BNB's price-earnings ratio is 2.08 to 2.78 times. What does this mean? Let's benchmark the traditional financial industry. The most conservatively valued A-share five major silvers have a price-earnings ratio of more than 5 times. There are basically no financial institutions such as banks and payments in the United States that are less than 10 times, and the price-earnings ratio of high-quality financial institutions is rarely less than 20 times. Conservatively, if it is valued at 10 times, BNB also has about 4 to 5 times of room for growth, which is almost exactly corresponding to the price of US$2,000 and the total market value of US$300 billion.
The only problem or challenge under this valuation model is: Will the frequency of Launchpad decrease? My judgment is that it will not, and it may even increase. I don’t know if you feel that it is really difficult to invest in altcoins in this round of bull market. One of the important reasons is that the number of altcoins has increased a lot. The total amount of new projects with old narratives and new projects with new narratives has almost increased exponentially. For example, there are dozens of public chains (including L2), and each public chain (including L2) has its own ecological projects. Behind a large number of new projects are the layouts of various VCs and institutions. It is well known that VC money has a cycle and needs to be exited, and the bull market is the best time. At present, the channels that can carry institutions to exit are very limited. The best place is Binance, which has a global market, global investors and huge liquidity. It is observed that the current speed of 2 new coins per month is actually unable to meet the needs of VCs and other institutions. This month, Binance has added a new function Megadrop, which is another way to list new coins. It confirms from the side that there are still many needs for projects that need to be listed on Binance, and Launchpad is not worried about new projects.
Based on product logic:
If you are an excellent fund manager of A-shares, in addition to looking at industry and enterprise data, you have to do the most basic homework when studying stock targets on a daily basis - that is, to experience the products of the researched enterprises from the perspective of consumers. For example, when studying the food and beverage industry, you always have to buy and experience it yourself, to see how it tastes, how is the price, how is the packaging, how consumers evaluate it, how the channel boss evaluates it, and then judge whether the product is competitive and whether it can bring returns to the enterprise in the future. Often, by studying products, you can see the development and problems of the enterprise. One of the important reasons why Mr. Buffett has been heavily invested in Coca-Cola for decades is that he is a heavy user of Coca-Cola. He likes this product, consumes this product, and understands this product, so he dares to invest heavily.
Similarly, when studying Binance and BNB, we must also experience and feel the products from the user's perspective. Today, let's look at a product of Binance, Binance Pay, from the user's perspective. I remember that Binance Pay, a product launched by Binance in 2021, is similar to a payment project of Alipay, which was briefly mentioned in my previous article. After Binance launched the function that year, I tried it out of curiosity and felt that it was good overall, but it did not attract the author's special attention. But in the past six months, I found that things have changed. Some friends have started to use it. When there are some stablecoin transfer needs between friends, the first priority option is not on-chain transfer, but Binance payment. For people in the circle, Binance payment has several advantages. First, there is no problem of receiving counterfeit coins; second, there is no problem of receiving black coins (some on-chain addresses have been contaminated by dirty money and are easily frozen when received); third, the speed is extremely fast, almost in seconds (no block confirmation is required).
So, based on this experience, let's make a logical extension. Binance's payment is actually a blow to the services of these traditional payment companies (such as Visa, MasterCard, American Express, etc.), just like the situation of e-commerce to traditional commerce in the early years. Compared with the services of traditional payment companies, Binance's payment has several incomparable advantages:
The cost is extremely low, almost zero cost. There may be costs in the future, but currently there is no cost.
The speed is extremely fast, almost within seconds, which provides the possibility for commercial retail applications;
It is global in scope and can be used almost anywhere in the world where there is an Internet connection, making it very convenient for cross-border use.
7*24 hours, the exchange is open all year round, and so is Binance Payment;
The most important point is that the threshold is extremely low. As long as you have a smartphone and an Internet connection, you can download the Binance app and pass the KYC certification. Compared with the application thresholds of other financial institutions, the entry threshold of Binance Payment can be negligible. This provides inclusive finance for many countries with weak traditional financial infrastructure. In Africa, many people are not qualified to open a bank account in their lifetime, but they may have their own Binance account because mobile phones and the Internet are far more popular than banks.
Although traditional financial companies are also trying to embrace blockchain, such as Visa and MasterCard, which are trying to use blockchain technology on a small scale, and even PayPal has issued its own stablecoin. However, if we look at it from a longer-term perspective, it is like the battle between Kodak and Fuji in the film industry against digital cameras. It may slow down the decline, but it will not reverse the situation of one rising while the other falling. At present, the only thing that can hinder the development of Binance Payment is the international policy on stablecoins. Once stablecoins are legally recognized and regulated, Binance Payment will develop at a rocket-like speed.
Currently, the market value of Paypal is 64.5 billion, the market value of American Express is 174.3 billion, the market value of MasterCard is 427.3 billion, and the market value of Visa is 509.4 billion. Although BNB is not equity, it is not excessive to give it a market value of 300 billion. After all, price is a comprehensive reflection of psychological factors. When more and more people value BNB, they think of the business logic of Binance Payment and related benchmark anchors, and the analogy valuation is reasonable.
In addition to the above two major logics, there is another major benefit for Binance. The US regulatory penalties for Binance and founder CZ have been settled. The $4.3 billion fine and CZ's 4-month imprisonment are equivalent to Binance's heavy historical burden being unloaded at one time, which is a major long-term benefit for Binance's development. In fact, this penalty is somewhat unfair to Binance and CZ. After all, in the early stages of the development of the currency circle, there was no supervision, and the entire industry was basically growing in a barbaric manner. Supervision lagged far behind the development of the industry. Different countries and different regulatory agencies have different definitions of tokens. It's just that Binance has developed the fastest and is most capable of paying enough protection fees, so it was punished. Anyway, in the long run, bad things will turn into good things.
The above article is purely personal nonsense and does not constitute any investment advice.
