Binance Burns $480 Million In BNB, Will Price Recover?
Binance, the world’s largest cryptocurrency exchange, just completed its quarterly BNB burn, destroying $480 million worth of its native BNB token. According to the company’s blog post, 1,991,854.33 BNB was recently burned in its 24th quarterly BNB burn, with 747.51 BNB going through the Pioneer Burn Program.
Binance Completes 24th Quarterly BNB Burn
BNB Chain’s token-burning events are not new and have become somewhat of a routine. BNB has an auto-burn protocol that removes a predetermined amount of BNB from the crypto market every quarter of the year.
The number to be burned each quarter is determined by the price of BNB and the number of blocks mined on the BSC blockchain. With the circulating supply of BNB now at 153.8 million, the latest 24th burn represents 1.2% of the total supply.
The initial total supply of BNB was 200 million BNB, but the supply is gradually decreasing due to the regular coin burn events. According to Binance, the auto-burn protocol will continue until its total supply is 100 million BNB.
Earlier today, #Binance completed the 24th quarterly #BNB token burn of 1,991,854 BNB through BNB Auto-Burn.
Not sure what the BNB Auto-Burn is?
Give this a read https://t.co/C5wlki9Lmb
— Binance (@binance) July 19, 2023
$480 Million In BNB Destroyed: The Impact On Price And Supply
For BNB holders, token burns are usually a reason to celebrate since they reduce the total BNB supply and should make the cryptocurrency more valuable. In the days following the burn, the BNB price may increase slightly as the circulating supply drops. However, these price spikes are often temporary. At this time, the BNB price barely budged despite the burn.
BNB price fails to move despite latest burn | Source: BNBUSD on TradingView.com
After hitting an all-time high of around $600 in September 2021, BNB has declined along with the rest of the crypto market. At its peak, the market cap of BNB went over $90 billion, making it the third-largest cryptocurrency behind Bitcoin and Ethereum.
Now, the cryptocurrency has been ranging between $300 and $200 since the beginning of the year, bringing its market cap to $37.1 billion. With its current market cap, the coin is now the 5th-largest cryptocurrency after XRP overtook it to claim the fourth position.
With less BNB floating around, the remaining tokens should become more scarce and valuable. However, scheduled or routine coin burns tend to have a negligible impact on price over the long run, as evidenced by BNB’s performance over the last day.
While the burn is meant to be a bullish event for BNB holders, the price hasn’t skyrocketed immediately as many investors had hoped. Considering the price of BNB is affected by various market conditions, past burns have had different outcomes on BNB.
The cryptocurrency is currently trading at $241.84 and is down by 2.39% over a 7-day timeframe. Trading volume in the past 24 hours is also down by 17.91% to $585 million.
Featured image from Currency.com, chart from TradingView.com
Source: NewsBTC.com
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