Crowd hoping for a rally as Binance burns another 2M+ BNB

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Oct 17, 2019

Binance has just completed its 9th quarterly burn of their native coin, this time burning a total of 2,061,888 BNB (about $36,700,000 USD worth at today’s prices) for the July - September period.

As a result of the burn, the BNB supply has now effectively dropped to 185.5 million tokens. Binance plans to continue to destroy BNB each quarter based on the trading volume on the platform, until 50% of the total supply (100 million BNB) is burned:

“Regardless of which address we store it on and which address we burn it from, we hold true to our whitepaper that we will continue to burn BNB in our possession until there are only 100,000,000 BNB left. Right now, following the burn, there are 185,474,825 BNB remaining.”

As the BNB burn always represents 20% of Binance’s quarterly profits, the event provides a continuing glimpse into the exchange’s financial stature. When compared to previous burns, it appears that Binance has just had its second highest quarterly profit to date - somewhat of a surprise considering the recent market-wide trends.

For reference, the previous burn (which took place back in July) saw ~$23.8m worth of BNB destroyed, implying an almost 55% increase in the company’s profits during the last quarter. In that same time, the total crypto market cap dwindled by 23.5%, which begs the question - what facilitated Binance’s growth in the midst of a bearish momentum?

Which begs the question - what contributed to Binance’s growth during the bear market?

According to the company’s burn announcement, the main culprit is diversification:

“Key contributing factors to this growth include new services like Margin trading, an increased number of fiat on-ramps to make purchasing cryptocurrencies more accessible, and a multitude of other services we introduced that are beginning to bear fruit.“

The blog post also boasts about a number of new initiatives, including the recently-launched Futures trading platform which the exchange expects to be a major contributor in their Q4 returns:

In an otherwise uninspiring week for the market, the burn has attracted an army of hopefuls that expect the reduction of BNB supply to prompt a new rally for CZ’s native coin.

Much like most other high-caps, BNB has been on a decided downtrend over the past few months, losing over 53% since hitting its ATH of $39.35 this June. Even CZ himself seems surprised at his coin’s poor performance over the last quarter, relative to the company’s development efforts:

“There are many possible reasons for it, although none of them make much sense to me. Yes, there was a drop in the price of bitcoin, our industry’s index. There was some FUD on various things (per usual). Regardless of all that, I think (in my biased view) our results out-shine them all. Yet, the price of BNB did decline. Markets often confuse people, even me sometimes.”

For what it’s worth, Binance coin has been showing slight signs of life following the burn announcement, recording a 3.8% bump in the past 24 hours, and a 5.2% gain for the week - a noteworthy contrast to a 5.4% drop in BTC’s price over the same timeframe:

BNB's 1-week price action (Source: Sanbase)

However, it doesn’t seem the ‘modest’ uptrend will be anywhere near enough to satisfy the crowd’s recent appetite:

As for what Q4 may hold for the exchange, seems that Binance is also looking to leverage the cryptoverse’s rising interest in the DeFi space. Announced yesterday, the ninth IEO on the Binance Launchpad will be Kava (KAVA), a DeFi platform which offers decentralized leverage and hedging of a number of assets including Bitcoin, Tether, XRP and Cosmos.

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Oct 17, 2019

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