Binance carried out its 10th token burn, removing ~$38.8 million worth of BNB from circulation, forever.
Binance Performs its 10th Quarterly Token Burn
The malta-based crypto exchange, Binance, has just carried out its 10th quarterly token burn, removing $38.8 million worth of its tokens (2,216,888 BNB) from circulation, forever. According to the exchange’s founder and CEO, Changpeng Zhao, this is the 2nd biggest burn when it comes to the coins’ USD value, and also the third-biggest burn in terms of BNB.
10th $BNB Burn | Insights and Expectations for the Future of BNB
“This is the 2nd biggest burn in USD terms and the 3rd highest burn in terms of BNB. Moreover, the USD value of the BNB burn grew for a fourth consecutive quarter. ” – @cz_binance https://t.co/jsF0LxAxS2 pic.twitter.com/ShX3bvYFhP
— Binance (@binance) January 18, 2020
Zhao also pointed out that this was the fourth consecutive quarter in which the USD value of BNB burn grew. As some may remember, the 9th BNB burn took place in mid of October last year, when the exchange burned 2,061,888 BNB, which was equal to $36,7000,000 million, as compared to the current $38.8 million.
Binance reported the 10th successful BNB burn yesterday, January 17th. In the announcement, CZ pointed out that,
The 10th quarterly burn represented the first full quarter that we factored in the performance of our most recent new products.
By that, CZ means Binance’s margin trading, launched in July; lending, launched in August; and futures, launched last September.
He also noted that Binance made an effort to increase its fiat-to-crypto options by adding support for 24 global fiat currencies to its exchange. He admitted that Binance Coin is still quite far away from its ATH, which it reached in June 2019. He says,
But I don’t worry about it as much, because we view BNB as a long-term play, and many in the Binance community continue to use and hold BNB.
Will it Affect BNB’s Price?
Token burning is a common practice in which the token issuer removes a certain amount of existing cryptocurrency from circulation. This is done by token creators, who buy the coins back from the community, and permanently lock it away.
Tokens are burnt usually for deflationary purposes. The Malta-based exchange had already announced quarterly token burn plans when the coin was initially launched, to keep the supply to 100 million BNB,
The exchange-based crypto asset’s current circulating supply is 187,536,713 BNB. However, after 10 token burns that were performed so far, the total supply has dropped down to 155,536,713 BNB. In other words, there are still over 55.5 million BNB that Binance will burn in future token burns, in an attempt to reduce the number of circulating tokens. BNB price could grow as a result.
At the time of writing, BNB is priced is at $17.75, after seeing a 1.49% drop in the last 24 hours. On the day of the burning, January 17th, BNB price grew from $17.17 to $18,03. However, the coin’s price was unable to breach the resistance level at $18. Even so, it was strong enough to handle the rejection and only drop by around $0.60 before returning and attempting to breach the resistance for the second time, once again unsuccessfully.
Do you expect Binance Coin’s price to continue growing due to the recent token burn? Let us know what you think in the comments below.
Image via Shutterstock, Twitter: @binance