BNB coin analysis

in #cryptocurrency5 years ago

On the threshold of the next quarterly burning of BNB tokens, which will be held on July 18 according to the schedule set by the Binance exchange, let's analyze this action in more detail.

Looking through the list of coins that had listed on Binance i remembered my own attitude to that exchange last summer (the launch of the exchange took place on July 14, 2017) and you know, it's radically changed! Even say more - IMHO for the year of its work, this playground-monster played a big role in the emergence of the so-called mass market crypto currency. In fact, they showed how to scale without glitches with the provision of maximum convenience for the end users. If you do not use their terminal or mobile application, then i highly recommend enjoy it.

At the moment, Binance have become one of the fastest growing companies of our time. In an attempt to make their BNB tokens more valuable, Binance has appointed a quarterly burning of their parts since the release of the coins. The number changes each time, because according to the strategy of the exchange, they determined to use 20% of the profit for redemption of tokens to be burned. Thus, theoretically, this action should help to increase the value of their currency.

To the question "Why is it burning these tokens that gets so much attention?" We will answer in a couple of sentences.

First of all, this is now the number one exchange for the masses, because any user can make an account for himself in a few minutes and immediately start trading without verification. the only limit is the withdrawal limit - 2 BTC per day.

Secondly, the unique feature of Binance is its Binance Coin (BNB) tokens, namely, that on the one hand holders receive a 50% discount on all exchange commissions, and on the other these same commissions are held in BNB, which is certainly very convenient, so as it does not split the traded coins - this all naturally stimulates users to buy and hold Binance Coin.

Briefly about the workability: now BNB is erc20 token on the Ethereum platform, but soon this coin will work on its own blockade already announced by the company as Binance Chain.

WTF Binance Coin Burn? As indicated in their document:

"Every quarter, we will use 20% of our profits to buy back BNB and destroy them, until we buy 50% of all the BNB (100MM) back. All buy-back transactions will be announced on the blockchain. We eventually will destroy 100MM BNB, leaving 100MM BNB remaining."

The first "burning" was announced on October 15, 2017, actually exactly in 3 months and held on October 18, 2017 - 986'000 BNB tokens were bought out and destroyed. Binance company strictly adheres to the timeframe, which allows analysts to predict the token's traffic, despite the fact that their public resources do not specify dates ....

After the first burning, the next was announced on January 15, and the fact itself took place on January 18, then "got rid" of 1'821'586 BNB, which in turn indicates a healthy growth in profit for the 2nd quarter. Burning for the third quarter (Q3) destroyed 2'220'314 BNB ...

And now look closely at the price chart and estimating the cyclicality I think your conclusions will coincide with mine:

1) Earlier immediately after the announcement of the burning, there was a depreciation, which was the result of the purchase of coins and the decline was stretched for about a month. But the last time the depreciation took a week earlier and, in my opinion, was provoked by large holders of coins who understood that it is better to fix profits and  re-bought at the bottom.

2) With each quarter, the volume of profit grows, that is, the further, the more coins are redeemed and, accordingly, the depreciation is inevitable.

3) Behind every recession, there is a growth of the course conditioned by the set of positions of the adherents of Binance Coin, the new users of this popular exchange and ... of course the release of new news from the company Binance itself.