Binance a popular cryptocurrency exchange firm recently announced that it has destroyed nearly 1.6 million of its BNB tokens worth over $17 million as a part of its 5th quarter coin burn – a step readily referred to in the exchange’s whitepaper. The destroyed coins have been sent to an address from where they cannot be drawn back, basically bringing the coins off the crypto market.
However, compared to Binance’s previous coin burns, the recent burning saw a smaller number of coins at its disposal. Over the past few months, a stable crypto market has led the investors to hold back their crypto rather than trading it, which resulted in lesser profits for exchanges.
The Crypto exchange firm should purchase the tokens from investors to carry out the quarterly coin burns. However, owing to the drop in profits observed this quarter, Binance could only retrieve fewer BNB Tokens.
Mostly cryptocurrency exchanges conduct coin burns to elevate the paucity of a coin in which a coin’s value must improve as it becomes harder to acquire.
BNB Token Burns are Observing Counter Effects
Unfortunately, the value of BNB token started to fall after the recent coin burn carried out on October 17. The previous coin burn conducted in the month of April also failed at increasing the coin value.
However, the coin burn practice is not going to end so soon. The cryptocurrency exchange firm, Binance is adhered to conduct regular coin burns until nearly 100 million BNB tokens are burned, which will remove half of the total BNB supply from the circulation.
Even if this coin burn practice does not increase the price of BNB, it may atleast curb the price of the coin from falling more than it could have fallen. Recently, the Binance resumed its operations after a system maintenance as the firm was facing some issues with its data synchronization on the platform.