The world’s largest cryptocurrency exchange by trading volume, Binance, has completed its 16th quarterly token burn of close to $400 million U.S. dollars worth of Binance Coin (BNB).
Nonetheless, the news has had no effect on BNB’s price.
Over 1.2 Million Tokens Burned
In 2017, when BNB was launched, Binance committed to burning a total of 100 million BNB tokens. This is equivalent to 50% of all the tokens in circulation. Burning a token basically deletes it, permanently eliminating it from circulation.
The exchange burns tokens each quarter. Per the present version of Binance’s BNB white paper, the number of tokens to be destroyed is based on the trading volume on Binance’s crypto-to-crypto platform registered in the previous quarter.
On July 18, Binance revealed that it had burned 1,296,728 BNB tokens worth approximately $393.6 million at current prices. The exchange also indicated an additional 5,163 BNB that was burned via its Pioneer Burn Program — an initiative that aims to help users who lose their crypto assets from honest mistakes. Notably, the burn is a decrease of over 30% from the previous quarter, suggesting a fall in Binance’s profits.
The latest quarterly burn is the second-highest one ever carried out by Binance in dollar terms — the highest was in April when BNB tokens worth $595 million were burned.
BNB Price Didn’t Budge
Despite the gigantic burn, the event has turned out to be a nothingburger for the BNB cryptocurrency. You see, reducing the supply — ergo increasing scarcity — of something tends to increase its price and benefits its owners; Binance and BNB investors in this case. Yet, the price of BNB has slipped following the announcement. The crypto is currently exchanging hands at $295.92, with 3.00% losses over the past 24 hours.
Regardless, BNB is still one of the best performers in 2021. The coin has enjoyed a raging bull rally since the start of the year. For perspective, BNB has posted eye-popping year-to-date returns of over 1000%, beginning at $36.80 and hitting a historic high-water mark of $675.
Binance has recently been facing growing scrutiny from financial watchdogs in the UK, Germany, Cayman Islands, Japan, Lithuania, Thailand, Canada, Hong Kong, Italy, among others. This unprecedented regulatory heat has prompted high-street banks Barclays and Santander to prohibit their customers from using their cards to send funds to the embattled exchange.
Also last Friday, Binance announced that it would shut down its stocks platform, which allows users to buy and sell tokens tied to the share prices of popular companies such as Apple, Tesla, Microsoft, and Coinbase.