Despite Burn, Binance Coin (BNB) Price Drops by 3%

Yesterday, Binance announced that it had completed its 18th burn of Binance Coin. This also marks the first implementation of the new auto-burn system that the exchange implemented last year. 

Binance Burns Over 1 Million BNB Tokens

According to the exchange, over 1.6 million BNB were destroyed in the latest burn, including 6296.305493 BNB burned during the Pioneer Program Burn.

While the actual value of the burned tokens was not released, it is estimated to be worth around $800 million. The figure might be more as it is difficult to determine the value due to the new auto-burn system that was recently introduced.

In previous times, BNB tokens were burned quarterly. The exchange through this quarterly burn has been able to take 35 million BNB out of circulation. The CZ-led firm has stated that its goal is to burn 100 million BNB tokens which is half of its total supply.

The leading crypto company introduced the BEP95 upgrade last month, which is geared towards adjusting the burn amount based on the token’s price and the number of blocks produced ​​on BSC during the calendar quarter.

According to Binance CEO Changpeng Zhao (CZ), this new auto-burn mechanism would help provide more autonomy, predictability, and stability to aid the growth of the exchange’s native token.

BNB Price Declines by Over 3% in 24 Hours

The recent BNB burn has not had any significant effect on the asset’s price. 

The digital asset had reached an ATH of $690 in May 2021 and has struggled to reclaim that glorious height. The closest it has been was in November, when its price crossed $660. Since then, it has been on a downward spiral following the general dip in the market.

In the past 90 days, BNB has lost over 2% of its value. But a closer look would show that the drop has been more substantial in recent times. In the last 30 days, the asset lost over 12% of its value, trading for as low as $408. 

Despite the burn, it lost over 3% of its value in the last 24 hours, and it is currently exchanging hands for $468.

While the burn is yet to have the expected effects on the prices, it’s likely to influence the asset’s value in the long run positively. Burnt tokens generally mean a reduction in supply which eventually affects the price when demand goes back up. 

This article was originally posted on FX Empire