Will the 15th BNB burn, pump Binance Coin to $1000

0
284
Binance Coin (BNB) makes fresh bullish move, 24 hours after 15th BNB burn

As a quarterly routine for Binance, the 15th BNB burn will hold sometime this month, on or before April 30, 2021. In a statement made on Twitter two days ago, Changpeng Zhao stated the need to take some tokens out of circulation to increase the value of BNB. 

Although the 14th BNB burn was recorded as the highest so far, many crypto enthusiasts have expressed their optimism for the 15th BNB burn on Binance’s Reddit page. Many believe that it will be the biggest burn of all time due to the increased trading volume. Since the price of BNB has increased massively since the last burn, the number of BNB coins to be burnt this time may be higher to increase scarcity and the coin’s price. 

Read more: Binance’s CEO says the 15th BNB Coin Burn Should Happen in a Month

A major event in the Binance ecosystem

Binance Coin (BNB) ‘s burn by the Binance exchange is a widely discussed topic in the crypto industry. The Binance exchange burns coins every quarter, reducing the asset’s total supply and increasing the demand ratio. The Binance fund’s reserves— 40% of the total supply—and tokens received as a commission by the exchange are often allocated for burning. The aim for burning BNB tokens was also revealed in the project’s White paper: “to halve the total supply of BNB (from the initial 200 million to 100 million)”. 

Moreover, Changpeng Zhao has resolved to increase the burning speed, considering that BNB has increased in value, and the burning rate so far is not commendable. Back then, trading volumes were used to determine the speed of BNB burns. But this strategy proved to be too slow, as the company has burnt only 13% of the overall amount. This is a total of $426,304,000 in about three and a half years. And at this rate, burning 100 million would take another 27 years.  

The plan to speed up burns would allow the company to reach 100 million burns in about 5-8years. However, they are yet to determine by how much. Changpeng Zhao also asserts that several reasons could influence this factor. It could depend on market conditions, BNB price volatility, and more. The bottom line is that their plan to burn a 100 million BNB has not changed. But the crypto market will only see a change in speed and by how much.

In all, Coin Burning is a common practice in the crypto industry. Many projects—like Tron and Ripple—use coin burning to preserve their assets supply and demand ratio. Theoretically, reducing the total volume of coins leads to an increase in value, provided that current demand indicators are sustained.

The question therefore is will the 15th burn pump BNB’s price to $1000?

The fuss about the upcoming burn has already contributed to a price surge, as BNB is currently trading above $500. If mere anticipation of the burn could increase the price, it is safe to expect BNB to reach $1000 after the burn. 

However, burning does not often guarantee an immediate asset’s value appreciation, as it simply destroys coins that have not been in circulation for a long time. But as the demand for coins increases over time, this can contribute to significant growth.

No matter how coin burning is executed, it acts as a deflationary mechanism. It remains to be seen how the market will react to the 15th BNB burn, but all signs point that the price of BNB could soar.