An In-Depth Valuation & Analysis of Binance Coin (BNB ) — Fairly Valued and a Potential Store of Value?

Crypto investor diving into an undervalued coin

The current state of crypto asset valuation is what I imagine driving was like in the early 1900s — everyone’s still just trying to figure it out, and we’re probably going to go down a couple of wrong roads while we’re at it. In this article, I’ll attempt to go down the correct path of valuing the Binance exchange coin (BNB).

Unpacking Previous Valuations

There have been a couple notable analysis around this topic already. However, the erroneous categorization of BNB into it’s proper asset class, have led to elegant, but misguided approaches. The two most popular articles have either:

1. Considered BNB as an equity — deriving it’s value directly from Binance’s profits
2. Considered BNB a consumable product — determining the total potential discounted fees provided by BNB as being a direct component of the token’s value

The first approach calculates the value of the total BNB supply as being equal to 20% of Binance’s, the company, implied market cap, given a PE ratio equal to a Hong Kong securities exchange. The premise of the first argument is formed from the fact that “20% of profit is used to buyback and burn BNB”. One can imagine that the concept of…