Binance is the largest crypto exchange, but its tokens are undervalued

Exchange tokens have existed for more than 3 years and yet there are many people who claim that these assets remain difficult to value or that it is difficult to assign real value to them. This is interesting because the definition of a token is quite clear – a utility token that gives users a share of the crypto exchange. It motivates them through discounted business fees, voting, etc.

Now, a recent TokenInsight report has attempted to evaluate the price performance of many top-level crypto market exchange tokens. It examined, inter alia, the BNB, OKB, Huobi Token and FTT Token. For the purposes of this article, let’s focus on Binance and its native Binance Coin (BNB) token.

Binance’s native tokens are undervalued

Using a series of metrics that included price / earnings, price / performance, market capitalization, and network value / transaction (NVT), the report found that Binance’s BNB tokens were in fact undervalued. Finding that a token is undervalued should usually be troubling. Common sense, after all, suggests that the performance of a token is highlighted by its valuation on the charts, and an underestimation should mean insufficient performance.

However, these rules may not apply to exchange tokens, especially such a Binance Coin. In fact, such a finding may not be a cause for concern. Think about it – A token like Binance Coin is fundamentally different from cryptocurrencies like Bitcoin and Ethereum. While the values ​​of the last two cryptocurrencies are inherently internal, the values ​​of exchange tokens such as the BNB and OKB are external, linked to the fate and wealth of the crypto exchange from which they originate.

The value of the BNB is linked to the value of the Binance, crypto exchange that has proven to be probably the largest in the world over the past few years. In just the last few months, Binance has acquired CoinMarketCap, launched the Binance Smart Chain and Binance mining pool, which are development successes that have succeeded in a number of other development activities last year and the previous year. It can therefore be argued that underestimating the BNB is only a matter of time.

After all, Binance is one of the world’s best crypto exchanges and the BNB itself has a very long history of exponential growth. Let’s go back to 2017, the year when Binance expanded at the fastest pace and its native BNB tokens responded with an increase of 8000%. That’s not all, because even in 2019, a number of exchange tokens surpassed Bitcoin. Binance Coin alone recorded profits of over 500% in the first half of the year, before the market collapse pushed profits back to less than 120%.

Full report can be seen here.

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