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How the $30 Million Coin Burn Affects Binance Coin (BNB)

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The world of Cryptocurrencies and the technology behind itis still intriguing investors and traders around the world, as blockchain technology is still not fully understood by the masses. Among the different terminology that we come across, a token burn is a common occurrence. Crypto companies may decide to burn some of their own tokens from the circulating supply for various reasons. This is known as Coin Burning or token burning event. It has been previously conducted by several token developers, primarily as a tool to increase demand.

The Impacts of a Coin Burn:

Similar to the stock market where a company decides to buy back some its own shares, cryptocurrencies can essentially burn some of their own tokens to lower circulation in the market. As a result, it promotes exclusivity, thereby raising the value of the coin in question.

To further explain the impact on price, let’s take an example of a company “X”. Company X decides to perform a coin burn for 50% of its existing token supply. (Example: 1000) priced at $5 each. As a result of the coin burn, the existing supply is reduced to exactly half (500) which make it 50% more valuable, increasing the price per coin to $10. Hence a coin burn is an advantage of big stake token holders.

The Effect of the Binance Coin Burn:

Binance declared earlier in their whitepaper that they were about to conduct a $30 million BNB token burn event which was completed in due course. However, it did not seem to impact the price too much, as the BNB token was still trading at a -2% on 15th April, valued at a high of $13.84 USD. The token burn generally was for increasing demand for a coin, and although BNB experienced a slight increase in the days leading up to the event, the coin was still trading at a negative despite the burn.

Analysts have argued that a mix of different factors impacted investor sentiment towards the coin. One of the major news was the September decision when Binance moved out their servers and headquarters to Japan from China. The decision was taken after increased fears regarding the Chinese government’s negative stance on cryptocurrency trading and exchanges. The rise and fall of value are quite similar to what happened on January 15th, when a coin burn of 1,821,586 BNB was conducted. The value peaked monumental levels and reached $22.95 at one point before a disappointing slump to $11.14 within the span of a two day period.

Binance as an exchange has enjoyed dominance for most of its lifetime in the crypto space and is still ranked first in terms of trading volume. It is currently up to roughly $1.5 Billion in trades at the moment and the numbers look impressive for quite a recent exchange. Currently, the Binance Coin is trading at $12.32, at a negative of -0.65% at the time of writing (17-4-18).

Final Thoughts

At a time when the cryptocurrency market is experiencing a storm and sentiments are low, it is important for the Binance team to solidify their goals and work towards them. In fact, reports indicate that many exchanges have considered closing operations with Japan’s Kraken Exchange shutting down citing rising costs as the reason. Although trend lines this time around aren’t looking as encouraging this time around, Binance still dominates the crypto space as a community-driven exchange. This is further encouraged by the discounts offered on BNB token usage on the platform, as discussed in detail in their whitepaper. Overall, many tokens and exchanges may struggle for months to come, but Binance’s position is predicted to remain strong for a sustainable period of time.

We will be updating our subscribers as soon as we know more. For the latest on BNB, sign up for our Telegram!

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of Hellcanwait via Flickr

Altcoins

Cryptocurrency Collateralized Debt Positions Are Growing in Popularity

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While Bitcoin (BTC) continues to hover around the magical 10,000 price level, altcoins continue to fight an uphill battle.  Simply put, hopes of a future bull run continue to diminish as Bitcoin maintains its dominance.  One school of thought is that a few altcoins will survive and flourish, but which ones are anyone’s guess.  That being said, it’s hard to go wrong picking against the top coins like Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and EOS.  These projects have managed to find a foothold in the market and have a better chance than most of staying there.  While traders wait for their positions to increase in value, one opportunity that may be worth looking at is initiating a collateralized debt position.

What is a Cryptocurrency CDP?

In traditional terms, a CDP is essentially putting up collateral in order to receive a loan against the deposited amount.  There are several examples of this in our day to day lives.  Auto title loans from large companies like TitleMax are extremely popular with consumers.  Consumers are essentially able to use their car as collateral in exchange for a cash payment which can then be used for whatever needs the consumer has.  The consumer can continue using their car as long as debt payments are made.

The same concept applies to cryptocurrency CDPs.  Consumers are able to put up crypto tokens, such as…

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Altcoins

Hodium Presents a Compelling Opportunity for Outsized Investment Returns

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Hodium
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I’m sure all of us remember the cryptocurrency glory days of 2017 and early 2018.  It was one of the biggest bull runs in history and created incredibly wealth for quite a few early entrants.  Unfortunately, for most of us, those gains have most likely been wiped out during the altcoin apocalypse.  The truth is that traders probably thought a bit too highly of their trading abilities when the reality was that anyone could have thrown a dart at a board and ended up making money.

As markets mature (and the crypto market is definitely maturing) it becomes more and more difficult to generate alpha.  In that regard, it’s similar to traditional financial markets.  I can remember trading during my high school days.  It was the late 90s and right in the middle of the dot.com boom.  Eventually, however, the euphoria fades away and reality hits hard.  Now, it’s become rather difficult to actually trade profitably which has given way to the rise of hedge funds.

Hedge funds are investment funds that pool capital from accredited and/or institutional investors and invest in a variety of assets, often with extremely complex portfolio-construction and risk management techniques.  The professionals employed by hedge funds are the best of the best and have spent years honing their craft.  That is why they’re able to make the millions of dollars that they normally…

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Altcoins

KaratGold Proves Its Business Model By Providing Official Documents

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There has been a lot of renewed enthusiasm in the cryptocurrency market thanks mainly to Bitcoin’s strong move about 10,000.  Although Bitcoin continues to show its dominance, the altcoin market has yet to benefit from that rally.  A few of the largest altcoins remain popular but the rest of the market continues to lag behind.  In 2018, there was a lot of talk regarding a possible altcoin apocalypse where only the strong would survive.  That prediction appears to be playing out as expected.  Going forward, only the best projects that have a real world need will survive.  Crypto traders will have to spend a lot of their time doing proper research in order to find the best opportunities, just like in all financial markets.  One promising project that appears to have the makings of a future winner is KaratGold Coin.

KaratGold Background

KaratGold Coin is a cryptocurrency developed by the reputable German company Karatbars International, which maintains a leading position in the market of small gold items and investments. The project is part of a larger ecosystem, which involves several blockchain solutions that can be used for transactions, communication, investing and other tasks. During the past few weeks, however, the KaratGold ecosystem has been a target of unsavory scam allegations.  

Karatbars International and GSB Gold Standard Banking Corporation…

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