Binance Fixes the Circulating Supply for Binance Coin, BNB Price Shoots 5%

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by Bhushan Akolkar · 3 min read
Binance Fixes the Circulating Supply for Binance Coin, BNB Price Shoots 5%
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The anomaly with the circulating supply of Binance Coin caused a massive $1.5 billion drop in its market cap this week. Binance assures that it has resolved the problem and BNB is back on track.

Investors of Binance’s native crypto token Binance Coin (BNB) had a bumpy over the last week. In the last seven day, BNB price crashed 20% losing nearly $1.5 billion of its market valuations.

The reason behind this price drop was Binance burning over 800,000 BNB tokens as part of its long-term strategy. Coin Burning is the process of reducing the total supply by permanently removing the coins from the ecosystem. Binance does this coin burning activity every quarter.

Concerns Over BNB Circulating Supply

The major concern was that BNB lost nearly one-third of its market cap dropping from $4.5 billion to less than $3 billion. However, it seemed that after the Coin Burning event, there was some issue with the circulating supply of BNB tokens. Data aggregator CoinMarketCap showed a drop of 80 million BNB tokens. This caused the total BNB supply to drop at 100 million.

There were doubts if the Binance team had spent any of the 40% of allocated tokens which are primarily used for development issues. Binance CEO Changpeng Zhao denied this possibility stating:

“CMC just gave an 80M BNB haircut. They way CMC calculate Circulating Supply works only for mining coins; it does not work for projects with burn, unlocked team allocations, etc. Oh well, more room for $BNB to grow.”

On Thursday, July 18, Zhao again confirmed that the circulating supply issue is fixed and that it is back to over 150 million.

BNB Price On Recovery Mode

Soon after Zhao’s announcement, the Binance Coin (BNB) price has been on the recovery mode. In the last 24 hours, BNB has shown an upswing of 5% and is currently trading at $28.83 with a market cap of $4.4 billion.

Solving the issue of BNB’s total supply has helped its climb above the ranks ladder. After losing its 6th spot to EOS and Tether earlier this week, Binance Coin (BNB) has once again reclaimed it.

So far, if you see the year-to-date chart, Binance Coin (BNB) has had a phenomenal journey The coin surged all the way from $6 to hit its all-time high of $39 on June 22. Its means a massive 550% returns in just a span of six months.

Experts and analysts are quite bullish on BNB and many believe it to cross $50 price by the year-end.

On the other hand, Binance’s Decentralized Exchange (DEX) is showing considerable development.

These two listings are likely to attract more users to join the Binance ecosystem. At this stage, things seem to have turned normal for BNB investors and the recovery hints towards pushing the BNB price northwards.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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