ExecutiveChronicles.com | If you are like me, and are new to the world of cryptocurrency or maybe even finance then you will have problems getting to know and understanding about Binance ETF. Here we’ll break down the phrase into parts so that it can be easier for you to understand. This guide will help anyone who is a beginner tremendously. However, if you are already familiar with this there still might be things that you can learn from them. So, let’s get started.
As we’ve stated before we are going to break it down into parts
- What is Binance
- What is ETF
- How do ETF and Binance come together
- How it is going to affect Binance
- Why it should be of interest to you
If you are familiar with any of the topic points you can simply skip to the one you might find more interesting
What is Binance?
The first thing we need to know about is what Binance is.
Binance is an exchange market for cryptocurrency. As we know there are so many cryptocurrencies now so this is an exchange center for them. Binance allows for the exchange of more than 100 cryptocurrencies such as Bitcoin(BTC), Binance Coin(BNB), Ethereum(ETH), Litecoin(LTC), etc.
So what Binance does is allows users to exchange between several different cryptocurrencies including one of their own by creating your wallet and depositing the desired amount of your preferred currency into your wallet. With this, you can now exchange between different kinds of currencies.
What is ETF?
ETF is short for Exchange Traded Finance. But the name, of course, doesn’t explain much.
What ETFs essentially represents is an option of investment with diversification. Maybe you want to invest in different kinds of assets or equity to reduce your risk. With ETFs, you can do this without even owning the individual assets. How does this work? Well, ETFs are a specific basket of assets that track all the other of the same kind. So instead of buying all of the different assets you just buy 1 basket with all of them or 1 ETF.
ETFs are sold in the stock exchange which is the most interesting part. Meaning they can be bought and sold throughout the day multiple times. This is important as the stock exchange is popular and sees a substantial amount of financial exchange it can open up new opportunities.
Binance a market for all the major cryptocurrencies is trying to get permission for selling ETFs. What this would allow Binance to do is sell in the stock exchanges where there is a large number of investors consisting of various sorts of corporations.
Many of the cryptocurrencies have already tried to get permissions for ETFs but currently, have not been able to. One of the main reasons for those getting denied is because to sell an ETF you have to have a diversified product. Here’s where the fun part begins. Binance, as we know, is an exchange market for many cryptocurrencies. They can mix up the different sorts of currencies as products and offer different ETFs. So, they have the largest requirement checked. ETFs are also able to move with the prices throughout the day like stocks. That is also true for these different currencies that we see.
If Binance gets approval for selling ETFs they could offer many of the currencies in a basket without having people to go through the lengthy and formative process of buying the individual currencies. As many of we know currently there are many steps needed to be taken before buying any sort of cryptocurrency.
With ETFs, it will be possible to reduce risk the cryptocurrencies by using portfolio while simultaneously allowing for participating in multiple currencies without actually owning any of them
How ETF is going to Affect Binance
As you know Binance has not yet been approved for selling ETFs yet. However, here is some foresight into some predictive things that are going to happen if it is approved.
ETF’s can be sold in the stock market, which is a very popular and big market, with wide-ranging participants and mountainous finance power.
This will let a lot of other people know about the already popular crypto exchange platform concurrently introducing new investments.
More people will get in on Cryptocurrency
The more people know about Crypto the more people will but it as it a decentralized, commitment-free safe currency or investment option.
Safety of Cryptocurrencies
There is a lot of concerns regarding the safety of cryptocurrencies. On the contrary, ETFs are known to be safe. When people buy ETFs they will now safely buy cryptocurrency.
Your Interest in ETF
If you are already a participant in Binance all the points above apply to you. Nevertheless, even if you are not participating in Binance but, have an interest in cryptocurrency or ETF, this will also end up affecting you.
ETFs in general will gain popularity
Many people still do not know about already common ETFs. This will change if Binance is approved for selling it
Binance’s own currency’s price will surely increase with its achievements.
Positive Effect in Cryptocurrency
As ETFs will allow for diversification in the purchasing of cryptocurrencies, different kinds of currency will be bought. This will allow for a widespread increase in the number of currencies available. As different ETFs will allow for diversified variations among the offered currencies, people will end up buying more of the currencies without risks.
Binance ETFs will allow people to buy diversified baskets of cryptocurrencies, reducing risk, while not owning any individual one of them. The ETF’s could be bought and sold in the stock exchanges. Allowing for massive growth both in participant number and amount of money spend. This will result in an increase of the cryptocurrency values and markets of exchange such as Binance. Needless to say approval of this will result in the most gains for Binance Company. Their control and influence over the currency and holdings will skyrocket. Your holdings in any cryptocurrency should also be positively affected, most of it is Binance exchange or in Binance currency.