Binance Burns $60.5 Million in BNB
There are many different opinions on why companies would want to burn of their assets in the case of crypto token burning but what was a strange phenomenon before has now gotten quite popular to the point where some people are calling it “creative destruction”. While burning of tokens means destroying those tokens so that they can never be recovered, investors and individual traders find these activities to be very beneficial. Going from simple crypto economics, the lesser the supply in the market, the more it will be worth. The opposite is true, if they introduce more of it in the market, the price will drop. So, we know one thing for sure. If a crypto company is burning, its tokens, then it surely is precedent for its value to go up.
History has shown us a few examples of this practice being held and consequently earning the company its due. Take the example of Switzerland based company EIDOO that stated that it would burn 1% of its tokens in November. Immediately after that statement gained some traction, people started buying EDO tokens of the exchanges and the price raised by an insane 40%. For those that were already holders of those tokens before the price increase, a huge return on investment was guaranteed. Coming to the latest and most impactful token burning news, perhaps the most popular Crypto Exchange in the whole world Binance just removed 3,477,388 BNB coins from existence in a record breaking feat. Coin burning is not new for Binance as it has announced that it will host burning events every quarter until half of its total supply is removed. Since it has issued 200 Million BNB, we can expect these events to keep happening until 100 Million coins are burnt. As for those that had BNB tokens, they would have seen a price increase due to the sheer size of it. As quoted by Binance themselves, the burning strategy aims at reducing the BNB coin supply in the market and increasing its value for its stakeholders. This burn came in the same month as the third anniversary of Binance and the number of tokens that are burned are calculated through the number of trades on their exchange in a three-month period.
Binance brought forth its BNB coin in 2017 with the aim of creating a utility token that people could use for discounts and trading in the open market. And just a few hours back, took $60.5 Million dollars’ worth of its token out of circulation. At the time of writing, it is the tenth largest cryptocurrency through market cap and is worth $18.14 with a 24-hour trading volume of $205+ Million. What are your thoughts on Coin burning? Is BNB worth investing in? What price do you expect to see BNB go to at the end of July? Leave your opinions in the comments and we will definitely love to feature your thoughts on our platforms.