In its latest move to reduce the circulating supply of BNB tokens, Binance has successfully completed another major Auto-Burn event, part of its ongoing BEP95 initiative. While the token burn is designed to enhance scarcity and drive price growth over time, the market reaction has been surprisingly muted, with BNB’s price slipping over 2% in the past 24 hours.
Binance Completes Another Auto-Burn: Supply Reduced to 139 Million BNB
The Auto-Burn mechanism under the BEP95 model, which Binance launched in late 2021, is designed to reduce the circulating supply of BNB tokens each quarter. This latest burn successfully decreased the total BNB supply to just above 139 million tokens—a significant step towards Binance’s ultimate goal of reducing the total supply to 100 million BNB. Once the 100 million mark is reached, the burn mechanism will automatically deactivate, marking the completion of the deflationary phase.
The BEP95 burn system adjusts the number of tokens removed based on price performance and on-chain activity. The idea is simple: by reducing the available supply over time, Binance aims to create a scarcity effect, which could potentially drive the value of BNB higher in the long run.
However, despite this deflationary move, BNB’s price action hasn’t exactly followed the expected bullish trend.
BNB Price Dips Despite Deflationary Burn
Following the burn announcement, BNB’s price dropped by 2.11%, briefly dipping to $578.04 before stabilizing at around $583.84. Traders and analysts quickly noticed that the price slip came despite the deflationary nature of the token burn—an event typically seen as a bullish catalyst in the crypto market.
While most token burns tend to prompt a positive price reaction due to the reduction in circulating supply, BNB’s price action suggests that investor sentiment may not be as optimistic as expected.
Market Pressures and Sell-the-News Behavior
Crypto market observers are pointing to several factors that may explain this muted response. Macroeconomic conditions, including ongoing global economic uncertainties, as well as broader crypto market volatility, may be dampening investor sentiment across the board. Additionally, some analysts speculate that the price dip could be the result of sell-the-news behavior, a common phenomenon where investors take profits or exit their positions after positive news has already been priced in.
With BNB already seeing substantial growth in previous months, some traders may have expected the burn event to trigger even more significant price movement, leading them to take profits or reallocate their funds elsewhere. This could explain the short-term decline despite the long-term deflationary potential of the burn.
Binance’s Long-Term Goal: 100 Million BNB
Despite the short-term price dip, all eyes are now on the road to the ultimate 100 million BNB target. As Binance continues its quarterly burns, the market will be watching closely to see how each burn event impacts the supply-demand balance and whether it will eventually spark a more sustained upward price trend.
For now, the burn seems to have had little immediate impact, but the deflationary effect is set to continue in the background, with potential long-term benefits for the token.
