Binance Lost $480M in BNB, Will Price Recover?

Binance, the world’s largest cryptocurrency exchange, recently completed its quarterly BNB burn, destroying $480 million worth of its native BNB tokens. According to the company’s blog Post1,991,854.33 BNB was recently burned in its 24th quarterly BNB burn, with 747.51 BNB going through the Pioneer Burn program.

Binance Completes Q24 BNB Burn

BNB chain token burning incidents 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 being reduced due to regular coin burn events. According to Binance, the auto-burn protocol will continue until its total supply reaches 100 million BNB.

earlier today, #binance completed 24th quarter #bnb 1,991,854 BNB token burn via BNB auto-burn.

Not sure what BNB auto-burn is?

read this 👇

— Binance (@binance) 19 July 2023

$480 million in BNB destroyed: 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 drop in circulating supply may see a slight increase in the price of BNB. However, these price increases are often temporary. At this point, the price of BNB barely moved despite the burn.

BNB price fails to move despite latest burn | Source: BNBUSD on TradingView.com

After hitting an all-time high of nearly $600 in September 2021, BNB has declined along with the rest of the crypto market. At its peak, BNB’s market cap exceeded $90 billion, making it the third largest cryptocurrency behind bitcoin and ethereum.

Now, the cryptocurrency has ranged between $300 and $200 since the beginning of the year, giving it a market cap of $37.1 billion. With its current market cap, the coin is now the 5th largest cryptocurrency after XRP took the 4th spot.

With less BNB circulating, the remaining coins should become more scarce and valuable. However, scheduled or regular coin burns have negligible effect on the price in the long run, as shown by the performance of BNB in ​​the last day.

While the burn meant a bullish event for BNB holders, the price did not immediately rise as many investors had hoped. Keeping in mind that the price of BNB is affected by different market conditions, previous burns have had different results on BNB.

The cryptocurrency is currently trading at $241.84 and is down 2.39% on the 7-day time frame. The trading volume has also decreased by 17.91% to $585 million in the last 24 hours.

Featured Image from Currency.com, Chart from Tradingview.com