In terms of transaction volume and the number of users, Binance is a big player in the crypto exchange space. Beginner and experienced investors alike are just as interested in mastering the platform’s tools so they can perfect their trading performance. So, how can you invest in AND trade on Binance? This guide will cover EVERYTHING you need to know about this exchange platform.
You should also do your due diligence and obtain as much information as possible before investing your hard-earned cash on any platform. Choosing the best exchange may depend on factors such as its: security record, trading fees, payment methods and range of cryptocurrencies. Bearing that all in mind, let’s start right at the beginning – way back in 2017 at the beginning of Binance’s journey.
The cryptocurrency exchange was founded in early 2017 by Changpeng Zhao (often shortened to ‘CZ’ by the industry), a Chinese immigrant from Canada. CZ was a computer scientist interested both in international finance and cryptocurrency projects, which began to emerge from 2010 (Bitcoin was launched on 3rd January 2009). Therefore, by combining his two passions, he anticipated the promising future blockchain technology (a chain of validated transaction blocks) could have on international trading.
A $15 (£11.5) million funding round
Changpeng Zhao went on to propose a funding round, known as an ICO (Initial Coin Offering) in crypto-world which was, and still is, a very popular way to raise money at the seeding phase of a project. Investors in the project receive digital assets in return for their cash, which can then be stored or exchanged for other virtual currencies.
Binance’s ICO in July 2017 meant they raised $15 million, which brought a lot of hype around the project. CZ was then able to attract more experienced collaborators, who he deployed to promote the Binance ecosystem. In just a few months, Binance had propelled itself to the top, becoming the largest cryptocurrency exchange globally in terms of trading volume.
Binance’s numerical progress in just five months was clear:
Launching binance coin (BNB)
Binance also launched its own cryptocurrency, which is used exclusively on its exchange. The launch of BNB capitalised on the popularity of the platform, so more capital could be raised by the Binance ecosystem.
CZ promoted BNB by revealing that percentage discounts could be obtained on transaction fees when using the coin. Reductions of 25% could be obtained from 0.1% to 0.075% when using BNB, with an additional saving when using the Binance Futures partner programme (requiring a 500 BNB stake).
Another advantage of BNB is that it can convert ‘coin/token dust’ (extremely small cryptocurrency units). This is useful as these residual amounts leftover from transactions can’t be withdrawn because they do not cover withdrawal fees. The success of BNB can be easily measured by its meteoric rise into the top 10 cryptocurrency by market cap (value).
How can I buy crypto on Binance? This is a really relevant question, especially when you realise there is no consistency among exchanges. The exchange platform allows you to buy cryptocurrencies by using other cryptocurrencies, by credit card or bank transfer.
In order to make life easier for investors, Binance widened its range of fiat funding methods by allowing credit cards and bank transfers.
The Israeli company, whose service has been compatible with Binance since January 2019, initially only allowed purchases of BTC, LTC, XRP or ETH by credit card (Visa, MasterCard) and bank transfer. Today, there are tens of cryptocurrencies and the fees charged by credit card are around 5% but there is a minimum fixed fee too. Users are capped at the equivalent of $20,000 (around £15,000) a day and $50,000 (around £38,000) a month.
In June 2019, Binance partnered with the TrustToken platform to offer a range of stablecoins (cryptocurrencies whose values are pegged to another cryptocurrency, fiat currency or a publicly traded stock).
TrustToken has various stablecoins, one of which is called TrueUSD, backed entirely by the US dollar. It is offered on Binance and is used to transfer money quickly and easily between cryptocurrencies and the user’s bank account.
London-based Koinal has been a Binance partner since September 2019. This company, which specialises in the payment processing sector, allows investors to acquire five digital currencies BTC, ETH, XRP, BCH, LTC, ALGO, IOTA, TRON by credit card (Visa, Mastercard or UnionPay). There will be a bank transfer option added in the future. Fees with credit card are around 2.5%.
The collaboration between Binance and Paxful was announced in December 2019. Paxful is a Bitcoin peer-to-peer buying and selling platform. As a result of this partnership, Binance integrated their Virtual Bitcoin Kiosk, which offers users the opportunity to instantly compare the offering based on the criteria that matches their exchange need (payment method, currency etc). With this service it became possible to buy BTC on Binance with lesser known fiat currencies such as the Nigerian Naira, Vietnamese Dong, Mexican Peso or Indonesian Rupiah to name but a few.
Binance allows you to use cryptocurrency to buy other virtual currencies. For example, you can buy BTC by exchanging them for ETH. In short, in order to exchange cryptocurrencies this way you must first deposit cryptocurrency into your Binance account and then make sure it is available to trade with. Thanks to the numerous partnerships mentioned above, you can directly buy cryptocurrencies using different fiat-to-crypto combinations and then store them with the official and secure wallet from the Trust Wallet exchange. It is also possible to withdraw them back into ‘normal’ currency through Binance Jersey.
Before this feature existed, users had to use Binance in conjunction with another platform that allowed you to trade crypto back into fiat (and vice-versa), like Coinbase, Kraken or Bitstamp. This method of transferring from one exchange to another is still very popular, as Binance Jersey has low volumes of cash compared to the other offering cited above.
Some of the most traded cryptocurrencies on Binance by volume are: BTC, ETH, LINK, YFI, BCH, ATOM, BNB, USDT, BUSD, XRP and ADA.
In January 2019, Binance launched a new cryptocurrency exchange located on the UK island of Jersey, which allows users to trade BTC and ETC for € or £. This helps solve the issue of having to open accounts on two separate platforms, therefore allowing it to compete with companies like Kraken, Coinbase and Paymium.
Good to know: the fee for a faster payments deposit is £1.95, regardless of the amount. There is also a £2 withdrawal fee.
It is important to know that Binance Jersey complies with European standards, respecting the Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.
A platform that allows the buying, selling and exchanging of cryptocurrencies has the advantage of being able to present a full range of services to support crypto aficionados (people bullish on crypto – thinking its price will rise). Such an ecosystem can be broken down into nine complementary branches:
Did you know? The name Binance comes from the merging of words binary and finance.
Do you want to start trading on Binance but you have a lot of questions about how it works? How can you invest in Binance? How can you trade on Binance? How can buy coins on Binance? Don’t fret, we have a tutorial explaining the steps you need to take to choose the right account based on your preferences, along with how you can register and how you can make your first deposit.
Binance offers two versions of its platform, each corresponding to a certain type of investor. The basic mode is most suitable for traders who are just starting out (those who do not trade on a regular basis, perhaps are just holding long term), while the advanced mode is designed for experienced investors (buying altcoins and cryptocurrency pairs on a speculative and regular basis). To better understand the world of trading, we recommend that you read this article.
The interface for advanced traders offers interactive charts and multiple tools, which help establish your investment strategy.
It is possible to see your order history, order options and market values for the various cryptocurrencies. Since Binance’s acquisition of CoinMarketCap, the world’s most popular cryptocurrency news and reference site, in early April 2020, this information has become even more useful. A seasoned investor also has access to technical analysis tools (linear tools, indicators), which can be adapted as and when needed (graphs, data projection etc).
In order to register, you must obviously visit the website and start by selecting the language in which you wish to proceed.
These are steps to sign up:
These are the steps to validate your email address:
These are the steps to logging into your account:
Good to know: while it may be cumbersome to add 2FA, we highly recommend doing it, as it is one of the easiest ways to secure your account. We also recommend you choose 2FA via Google Authenticator rather than text. And hey, as an added bonus 2FA gives you a higher withdrawal limit.
If you want to buy crypto on Binance you will need to first make a deposit, there are few ways you can do this.
In order to do this you must have:
As mentioned above, since January 2019 you have been able to buy cryptocurrencies on Binance with a credit card. The range of cryptocurrencies is limited but there are over 20. To do this, you need to:
You are then redirected to the secure page of the payment provider in order to finalise the transaction.
If you want cryptocurrency on your Binance account, follow the steps below.
You need to use dedicated platforms if you want to buy cryptocurrency. Even though you can buy a lot of different cryptocurrency on Binance, there are many more altcoins out there. Some altcoins need to bought on other platforms like Bidesk, Uniswap and Kucoin. However, for most beginners the likes of SwissBorg, Binance and Crypto.com offers enough coins.
How can you buy cryptocurrency on these platforms? First of all it’s important to know that not all offer the same way to purchase cryptocurrency. You need to select the one that best suits your needs. Don’t forget you are not just limited to credit cards and bank transfers, you can also buy prepaid cards, use online payment solutions or even cash.
If you want to exchange your cryptocurrency on Binance, you need to:
To withdraw, you need to click on the ‘Withdrawal’ button and follow the instructions. There will be withdrawal fees which will depend on the value of tokens withdrawn.
You should be aware that there are limits on withdrawals depending on your account level:
A level two account requires you to comply with KYC/AML account identification regulations. The exchange, which is located in Hong Kong, asks you if you live in China or not, before going on to other personal information, such as your last name, first name, sex and country of residence.
KYC requires a phone number and a photo of both sides of a valid ID, as well as your photo, which you can take from the device you are registering from (of course it should match your ID photo).
Cryptocurrency exchange platforms are prime targets for hackers, so in that sense, it is highly recommended that you store your private keys (which allow access to your funds) on an external cold wallet solution. Cold storage means your private keys are on an offline wallet, unlike hot wallets. We recommend the classic cold wallets, such as the ones made by Ledger or Trezor.
Once your identity has been verified, you can store your purchased tokens on an internal Binance wallet. The steps are as follows:
Good to know: although it is possible to trade with a single address, it is recommended to create several, in order to prevent another user from accessing your information, which they could do by associating the link between the given address and the volume of cryptocurrency held.
Since August 2018, Binance has offered to store cryptocurrencies on Trust Wallet, an open source wallet (open source meaning free access for all), which campaigns for decentralised transactions and anonymity. Coming in the form of a mobile application, Trust Wallet allows you to manage tokens while keeping control of your private keys.
This universal wallet allows, for example, Binance DEX users to benefit from secure trading services. The wallet notably incorporates Ethereum as well as ERC-20, ERC-223 and ERC-721 tokens.
The exchange’s security can be found in many different forms:
This Binance tutorial has hopefully clarified a number of points to help understand how to buy tokens on Binance. With its impressive catalog of cryptocurrencies and its future developments, in particular with regards to payment facilitation, the exchange remains a big player in the world of cryptocurrency trading. As long as you understand how to manage your risk, it will be a very fun ride. However, with ever more innovative new features, who knows how far the Binance platform will continue to leave its mark on the world of cryptocurrency.
Just your average global millennial embracing, and interested in, the future of money and finance. Excited by blockchain tech as well as fintech but have a special passion for DeFi and Yield Farming, what will this technological disruption bring next?
Les propos et opinions exprimés dans cet article n'engagent que leur auteur, et ne doivent pas être considérés comme des conseils en investissement. Effectuez vos propres recherches avant toute décision d'investissement.
|BITCOIN (BTCUSD) ₿||$61,377.85||0.83%|
|ETHEREUM (ETHUSD) Ξ||$3,832.21||0.08%|
|IMM. US (REIT)||$2,666.33||-0.01%|
Recevez le meilleur de l’actualité Crypto dans votre boite email
Receive a free hour of coaching with an expert! Just fill in this form and our expert will contact you within 48 hours.