Binance, the world’s largest cryptocurrency exchange, has just completed its quarterly BNB burn, destroying $480 million worth of its original BNB token. According to the company’s blog after1,991,854.33 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.
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 BNB’s circulating supply now at 153.8 million, the last 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 the total supply reaches 100 million BNB.
Earlier today, #Binance completed the 24th quarter #BNB token burn of 1,991,854 BNB via BNB Auto-Burn.
Not sure what the BNB Auto-Burn is?
Read this 👇 https://t.co/C5wlki9Lmb
— Binance (@binance) July 19, 2023
$480 million worth of BNB destroyed: The impact on price and supply
For BNB holders, token burns are usually a cause for celebration, as they reduce the total BNB supply and should make the cryptocurrency more valuable. In the days following the burn, the BNB price may rise slightly as circulating supply falls. However, these price spikes are often temporary. At this point, the BNB price barely moved despite the fire.
BNB price fails to move despite latest burn | Source: BNBUSD on TradingView.com
After reaching an all-time high of around $600 in September 2021, BNB has fallen along with the rest of the crypto market. At its peak, BNB’s market cap was over $90 billion, making it the third-largest cryptocurrency after Bitcoin and Ethereum.
Now, the cryptocurrency has fluctuated 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 scarcer and more valuable. However, planned or routine coin burns tend to have a negligible impact on price in the long run, as evidenced by BNB’s performance over the past day.
While the burn is intended as a bullish event for BNB holders, the price did not immediately skyrocket as many investors had hoped. Since the price of BNB is affected by different market conditions, previous burns have had different outcomes on BNB.
The cryptocurrency is currently trading at $241.84 and is down 2.39% over a 7-day time frame. Trading volume in the last 24 hours is also down 17.91% to $585 million.
Featured image from Currency.com, chart from TradingView.com