(Updated 19. September 2022)
Binance coin had taken the crypto market by storm. I first brushed it off as another coin with little to no real-world use case and questionable motives, but I changed my view and began exploring whether it could reach $10,000–$100,000.
Let me get straight to the point:
Under the scenarios in this article, Binance Coin (BNB) could reach a price between 10 and 100 thousand dollars. That would require BNB to capture 3.25%–10% of the entire crypto market while Bitcoin reaches at least one million dollars. BNB's market cap would then be $1T–$10T.
Let's begin with details regarding the market capitalization of a theoretical 10 and 100 thousand dollar BNB:
Remember: Price per coin * Number of coins in circulation = Market Capitalization.
Logically, the number of coins in circulation impacts the market cap to a great degree. Therefore, we need to get an idea of how the supply mechanics of Binance coin work to figure out what market cap it will reach, given a BNB price of $10,000 and $100,000.
According to Coinmarketcap, Binance coin has a supply of 160 billion coins. However, there are significant coin burns effectively making BNB deflationary.
In total, Binance plans to burn enough BNB to end up with a supply of around 100 million coins in eight years. (source)
If they do this and end up with a supply of 100 million BNB in eight years, the theoretical market caps would be:
$10,000 * 100,000,000 = $1 Trillion
$100,000 * 100,000,000 = $10 Trillion
To give you a more concrete view of these numbers, I created a chart showing them compared to other stuff you're familiar with:
In this comparison, a $10,000 Binance coin fit within the scenario. A $100,000 Binance coin pushed the limits much further.
If, for example, BNB at $10K was bigger than the M2 Money supply, which basically is the market cap of the U.S.Dollar, I would be highly skeptical. But the fact that it is below a $10K Ethereum makes me conclude with this:
Under these assumptions, I considered a $10,000 BNB plausible; the upper end near $100,000 required a far more extreme $10 trillion market cap.
let's get into what it takes for BNB to reach this, and make some predictions (based on speculation):
What It Takes For Binance Coin (BNB) To Reach $10,000:
To reach ten thousand in price is the same as reaching one trillion in market cap. Let's try to figure out what it takes for BNB to reach this number.
To calculate this, we need to make some assumptions. I'll make two, as listed below:
Bitcoin at $1,000,000 by 2037
Bitcoin dominance at 35%
These assumptions drove the scenario. The premise is explained in my historical million-dollar Bitcoin analysis.
We can use these assumptions to mathematically calculate what percentage of the cryptocurrency market BNB needs to capture, like this:
Market Cap / Total Crypto Market = Required Market Share
The equation above shows that "the total crypto market" is needed to get the required market share for BNB to reach $10,000. We can get this by figuring out the market cap of our predicted million-dollar Bitcoin, and dividing it by 0.65 (because Bitcoin is 35% of the total crypto market, according to our assumption)
The market cap of a million-dollar Bitcoin is roughly 20 trillion USD. Divided by 0.65, we get roughly 30.75 trillion USD.
Now we have everything we need. Let's plug in the numbers:
$1,000,000,000,000 / $30,750,000,000,000 = 0.0325 = 3.25%
What we can conclude from our assumptions and calculations that:
For Binance coin (BNB) to reach $10,000, it needs to capture 3.25% of the total crypto market when Bitcoin reaches $1 million and the BTC dominance is 35%.
That market share is actually low-balling it. BNB has held more than 3.25% of the market for a long time:
Even throughout the current bear market, BNB is increasing its market share. This is good news, and further supports the case for Binance Coin reaching $10,000 or even $100,000 at some point in the next decade.
What It Takes For Binance Coin (BNB) To Reach $100,000:
To reach one hundred thousand dollars in price is the same as BNB reaching ten trillion dollars in market cap. Let's try to figure out what it takes for BNB to reach this number.
The assumptions we make now will be more speculative and less realistic than in the section above:
Bitcoin at $1,500,000 by 2037
Bitcoin dominance at 30%
These assumptions are shakier and highly speculative. Using these, we'll figure out the required market share for Binance coin to reach $100,000. Once again, the formula we use is:
Market Cap / Total Crypto Market = Required Market Share
We now need to figure out the market cap of our predicted $1,500,000 Bitcoin and divide it by 0.3 (because Bitcoin is 30% of the total crypto market, according to our new assumptions)
The market cap of a one-point-five-million-dollar Bitcoin is roughly 30 trillion USD. Divide that by 0.3, and you get 100 Trillion USD.
Now we have everything we need. Let's plug in the numbers:
$10,000,000,000,000 / $100,000,000,000,000 = 0.10 = 10%
In other words:
For Binance (BNB) to reach $100,000 in price and a market capitalization of $10 Trillion, it will need to capture 10% of the total crypto market, while Bitcoin, at the same time, reaches 1.5 million dollars and dominance of 30%.
This is less plausible than the $10,000 BNB but not entirely impossible. The 10% market share is a tall order, but Ethereum currently holds over 20%, proving that it is well within the realm of possibilities.
For comparison, see my historical Ethereum investing and trading strategy.
Conclusion: Yes, Binance Coin (BNB) Can Reach $10,000 - $100,000
If you deem the assumptions above reasonable, the calculations show what would be required. I personally thought the lower part of the interval, perhaps $10,000–$20,000, was the more plausible part of the scenario.
To conclude and summarize:
My conclusion was that Binance coin could reach a price between 10 and 100 thousand dollars only under the assumptions above. Given the planned coin burns, the market cap would be between one and ten trillion USD. BNB would need at least 3.25% market share to reach $10K and 10% to reach $100K, alongside a Bitcoin price between $1 million and $1.5 million. Ethereum's then-current market share provided a point of comparison, not proof that BNB would follow the same path.
Price data and supply data are generally from coinmarketcap.com