BNB Chain has just completed its 31st quarterly token burn, destroying over $900 million worth of BNB tokens. Despite the massive burn, the market reaction was underwhelming, with the token’s price barely moving.

$916 Million Burn, Minimal Price Reaction

On April 16, BNB Chain burned 1.57 million BNB tokens, valued at around $916 million. The announcement was shared on X (formerly Twitter) by Binance co-founder Changpeng Zhao (CZ). This event is part of BNB Chain’s ongoing mission to reduce the total supply of BNB to 100 million tokens.

However, despite the scale of the burn, BNB’s price moved just 0.85%, trading at $583.51 at press time. It remains more than 25% below its all-time high of $788.84, reached on December 4, 2024.

Auto-Burn Mechanism Explained

BNB uses an auto-burn system, which calculates the number of tokens to be burned based on two factors:

1. BNB’s market price
2. The number of blocks produced on BNB Smart Chain (BSC) during the quarter

This mechanism ensures a predictable and transparent token reduction process. Once the circulating supply reaches 100 million, these quarterly burns will cease.

After the latest burn, the current circulating supply stands at around 140 million BNB.

Why Token Burns Don’t Always Pump Prices

In theory, reducing supply through burns creates scarcity, which can lead to price appreciation—if demand is strong. It also encourages long-term holding, or HODLing, especially among loyal investors who believe in the project’s future.

However, in this case, the market seems unmoved. The broader bearish sentiment in the crypto space is likely suppressing any short-term price surge, even after such a major deflationary move.

BNB Holds Strong Despite Market Mood

Despite the muted price action, BNB remains a major player. With a market cap of $85 billion, it is currently the fifth largest cryptocurrency in the world. The latest burn reinforces its long-term supply strategy, but it also reflects the challenge of boosting price amid market-wide caution.

While BNB’s fundamentals remain strong, investors may need to be patient for the token’s price to reflect these ongoing deflationary efforts.