Even though it has been around for well over a decade, many investors are still unfamiliar with the crypto market. And even though almost everyone knows about Bitcoin and many people know about Ethereum and Ripple, there are thousands of other crypto tokens that fly below the radar. And there comes the problem of unfamiliarity.
Being unfamiliar with a particular cryptocurrency and its community keeps a lot of potential investors at bay since they try not to invest in something they don’t understand. But it also limits the total pool of crypto assets they potentially have access to.
So if you are interested in cryptocurrencies and wish to extend your portfolio, there are at least a few well-known and highly traded crypto tokens that you should be familiar with. One of them is Binance Coin (CRYPTO:BNB).
The fourth-largest cryptocurrency
Currently, Binance Coin is the fourth-largest cryptocurrency by market cap, sitting neatly between Tether and USD Coin. The popularity and familiarity of Binance come from the Binance exchange, which is by far the most extensively used crypto exchange in the world.
The exchange introduced its own crypto to facilitate trading and easy exchange between other crypto assets. It has grown beyond that role and stands as a coveted crypto investment asset. The crypto was originally built on Ethereum’s blockchain, but it moved to Binance’s own blockchain.
Binance has been smart about its crypto token. The company repeatedly buys and “burns” its crypto token to manage the available coin supply. Binance Coin is currently trading at about $472.8 apiece, and even though the current price is the result of a massive 42% decline, it’s still over 2,500% higher than in early 2020. Its growth potential is massive, especially if you can buy it at or near its late 2019 and early 2020 levels.
A finance company
Nuvei (TSX:NVEI)(NASDAQ:NVEI) made an explosive entry into the TSX market and had an amazing IPO. This payment processing and solution company saw rapid growth since its inception, and the stock grew about 272% in exactly one year. However, the stock is falling hard and is still in a slump.
The correlation between Nuvei and BNB is quite thin, and it’s through the broad crypto market. As a payment solution company with an extensive global reach, Nuvei is one of the few players of its size that facilitates crypto transactions. And even though the crypto tokens it works with don’t include Binance Coin, the Nuvei stock might sway in response to crypto market headwinds.
The current slump might be a great time to buy the company, which may have the potential to make its investors rich in the long term. And as a stable company with diversified offerings, it’s significantly more stable than cryptocurrencies.
Investors that are comfortable with the vulnerability of certain tech stocks are more open to investing in crypto than investors with a more “conventional” risk appetite. But if you have the right risk tolerance, you might consider adding BNB to your portfolio once it has slumped enough.