In the period between January 1st and March 31st, the Binance Crypto exchange management team was conducting its 7th burn for its Binance Coin (BNB). The team is announcing that the burning process has been completed successfully.
This is a piece of positive news to BNB holders as their Tokens are expected to surge in value as a consequent of the burning process. This is because the amount of BNB in supply will be affected leading to an overbought condition that has the potential to lead to a bullish condition. The exact opposite of not failing to burn is an oversupply condition that is detrimental to the Token’s performance.
About The 7th Burn
The Binance operator is reporting that the exchange has burned 829,888 BNB. The value of the BNB Tokens at current prices is $15.6 million. The April 16th, 2019 report from Binance, reveals that these Tokens are half the amount that was burned in the last quarter.
As per the roadmap of the Binance Coin Project, the team is set to be burning BNB quarterly assuming that all factors remain constant. The whitepaper has clearly specified the plans and the methodology is aimed at protecting investors from value depreciation of the BNB.
The Amount Of BNB Burn Rate Depends On Price Movements
The Binance team notes that the “burn rate will become slower” as the BNB price increases. In the past three months, the value of BNB has tripled and the USD equivalent of coins is, therefore, higher than that prevailing in the last quarter. Hence, the number of Tokens being burned is set to be pegged on the USD factor all other factors being constant.
BNB Price Began To Recover Before The BTC Rally
According to the Binance team, BNB’s price rise started before the Bitcoin over the 7-week recovery cycle. This is meaning that fewer BNB Tokens are being sent to settle trading fees by Binance users. This means that there is technically lower revenue in BNB for the exchange. However, because of the BNB rally after the Bitcoin recovery, the USD denominated net returns for the exchange has significantly increased.
Hence, Binance management team is confident that the current market bull run could increase the USD- revenues for the platform. If this assumption remains the same, the BNB burn rate in the next quarter could be the same.
It is Not Yet Clear Why BNB Rose Before BTC
Binance CEO Changpeng Zhao is acknowledging that the team does not know why BNB started to recover before BTC. However, he reveals that the company has a mantra of being simple and focusing on building the platform. He notes that massive in 2018 and 2019, Binance has been deploying products for real-life use and this could play a part in the BNB unusual price rally.
BNB Is The Seventh Largest Crypto
According to Coinmarketcap data, BNB has a market capitalization of $2,738,029,877 and is, therefore, the 7th largest Crypto. The Binance Coin price is $19.39 which has shed off 1% in the last 24 hours in the otherwise red market. The daily volume of trading is $169,865,081and the supply is 141,175,490 BNB.