Binance Burns $620 Million Value Of BNB, Massive Rally To Follow?

Binance accomplished its twenty second burn round, removing 2.064 million BNB tokens from circulation. The large token burn amounts to $620 million, in keeping with the value on the time of the burn. Through these programmed burning transactions, Binance goals to scale back BNB’s circulating supply to 100 million via its Auto Burn System. 

The twenty second Token Burn Round By Binance

Out of the entire BNB burned, 7,181.03 BNB are taken out of circulation through their Pioneer Burn Program. Some users are lauding the move on Twitter and comparing BNB to BTC’s price motion. 

On seventeenth January at 13:19 hours, over 2 million BNB tokens were burned, and the corporate shared the info on this event on its website. After the burn is complete, the present circulating supply of the BNB coin is 157,904,427. Following the deflationary mechanics, the BNB token burn can assist inflate the value and improve the token’s market value. Up to now, BNB has successfully burned over 44 million tokens. 

What’s the Auto Burn System?

The BNB Auto Burn is a quarterly protocol used to burn a determined amount of BNB while offering greater transparency and predictability to the BNB community. When the circulating supply reaches 100 million BNB tokens, the Auto Burn system will stop. The mechanism replaces BNB’s earlier quarterly accelerated burn mechanism, which lasted till the seventeenth Burn round. 

BNB Auto-Burn Chart, Source: Binance

Determining what number of coins shall be taken off circulation relies on on-chain automatic calculations. The system takes BNB’s price on the time of burn into consideration before burning. If the value is low, the burn amount shall be higher to take care of the supply-demand dynamics. 

Through its official announcement, Binance shares that “each objective and verifiable, independent of revenues generated on the Binance CEX through the usage of BNB.”

Will The BNB Price Soar After The Burn?

Working to the principle, when an asset’s supply reduces, its price tends to extend. On the time of burning the tokens, there are fewer number tokens available out there. Following the last burn transactions, BNB’s price increased, which is anticipated to occur this time. 

Binance Chart
Binance Coin price with some small profits on the every day chart. | Source: BNBUSD on TradingView

Nonetheless, one other interesting trend is emerging in the shape of a decrease in trading volume by 2%. This will mean traders lose interest in Binance Coin (BNB) and don’t need to purchase or trade in BNB. 

Featured image from Kanchanara on Unsplash.com, the chart from TradingView.com

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