What’s Riding its rally?
Binance owes the surge to its crypto BNB to crypto burn that is done in order to bring down the supply of the crypto in Crypto market. Why and How?
BNB has outperformed the rest of the crypto market by a substantial margin and has made it to the Top 10 Cryptos for the first time in its history after recording a 6% gain on the day.
On 16th of January, Binance team burned BNB worth $9.4 million in a coin burn and eliminated a portion (1,623,818 BNB) of the circulating supply of the Crypto in Crypto market.
Every quarter, Binance burns the circulating supply of BNB using the profits generated by the exchange.
Burn complete. I remember when I did the first burn of $1,500,000 USD equivalent in BNB, I was nervous as hell. Now, well, I am still nervous, lol. Fastest way to spend money. https://t.co/R6PL2cSURM
— CZ Binance (@cz_binance) January 16, 2019
Coin burning is a unique concept of Cryptocurrencies. Where, a certain amount of crypto coins are eliminated from the existing supply, thus improving efficiency.
It’s done for various purposes:
Protection against spam
Sign of Long-Term Commitment
More effective Consensus Mechanism (for POB adopted coins
As a result, there is an increase in the value of the crypto. As Supply and Demand are the major factors in it’s Value.
Thus, as the demand for BNB grew and it’s price declined , the price increased more than 75 percent.
From BNB’s all time high, BNB has declined by 61% and it is remains the best performer in this cryptocurrency bear market.
Initially, BNB was issued as a means to finance Binance company in it’s early stages. Binance has been using 20 % of it’s profits to buy back BNB and to destroy them.
Changpeng Zhao commented that this is going to happen till the company buy back 50% of all the BNB back.
The surge is also contributed by the good leadership and prospects of Binance.