How often does token burning benefit the token holder?

[AlphaBheta]

If we're to go by averages how effective do you think burning tokens is for the token and especially for people that hold the token?

Is it something that's beneficial most of the time? because that must be the incentive for all the hype I've been seeing online about BGB burning their token in this quarter. Of course it concerns me, I also bought it just before the surge last year, and although the price dropped a bit, it looks like people expect another price surge as a result of the burn.

I don't want to get ahead of myself because I'm also a holder, but if that is the case, then it is definitely good news

[Charles-Tim]

People should not let burning of tokens deceive themselves. You can easily see how it would be ineffective from these formulas:

Market Cap = Price of a coin * Circulating Supply.
If the supply is reduced, the marketcap will reduce.

Price of a coin= Marketcap/Circulating Supply
If the marketcap is reduced, the price will reduce back in a way that the burning will have no significant effect on the coin.

What that actually matters is demand.

[bettercrypto]

Of course, as long as there is a burning mechanism taking place in a token and its trading volume is good in the daily market, this is a good sign for holders of tokens like BGB, so this can be considered good news especially if the average number of burned coins is high.

Because there are usually kicks in its price in the future, and then another thing for me, BGB is also okay in reality and that's why it's one of the ones I'm holding right now,
even if I only hold a little of it as long as at least I have some of it.

[DanWalker]

Supply is one of the factors we rely on to evaluate the potential of a token, and for coins with decreasing supply over time, this will be a catalyst for the price of coin to increase.

But supply is not the main factor that determines the value of a coin, it is the demand for it and to have high demand there needs to be a real use case. That means you need to evaluate the coin's potential through its utility, its use cases before looking at the supply. A coin is useless without utility, without use cases and especially without demand even if the supply is very low. Supply is secondary.

[avikz]

If we're to go by averages how effective do you think burning tokens is for the token and especially for people that hold the token?

Is it something that's beneficial most of the time? because that must be the incentive for all the hype I've been seeing online about BGB burning their token in this quarter. Of course it concerns me, I also bought it just before the surge last year, and although the price dropped a bit, it looks like people expect another price surge as a result of the burn.

I don't want to get ahead of myself because I'm also a holder, but if that is the case, then it is definitely good news

Token burning is a marketing trick that brings no real benefit. Let me give you a real world example.

When the value of a fiat currency starts decreasing against USD, the central bank of that country usually steps in and starts selling USD against their own fiat currency. That increases the buying pressure of their own currency. That's one of the tools they have to arrest the price decline. But it's still questionable whether this trick works or not. Sometime it does but not for every single time. It's not a full-proof solution.

Now transfer this tick into crypto market. Token owners try to reduce the supply by burning tokens when the demand is not adequate. So they try to keep a balance between demand and supply. because if the gap becomes too wide, the price declines.

Don't get fooled by these things. If the demand of a token reduces over a period of time, it's best to book your profit and come out of it.

[Cointxz]

If we're to go by averages how effective do you think burning tokens is for the token and especially for people that hold the token?

It’s effective if the token burn rate is greater than the growth of the circulating supply.

Only few project manage to use token burn for their price growth in long term because the typical problem of altcoins are the vesting period of tokens especially through Staking are much larger compared to token burn that’s why the supply becomes saturated.

It’s dumb to think that token developers set a high total supply of token just to burn it while they can start with low total supply to easily create scarcity on the token instead of burning it.

[Felicity_Tide]

Burning a certain number of token doesn't necessarily or automatically trigger a better price, but investors and market conditions are actually the reason behind it. It's very simple, whenever an announcement is made that a certain number of coins will be burnt, in the case of BGB for example, it automatically gets Investors involved. Since some portions are been removed, investors starts having the mindset to get their hands on the others.

Take the BGB that you mentioned for example, they burned about 800K (if I remember correctly), and that's was during a very bullish market move, that later triggered BGB further. So, It was not as if the burning process actually triggered the price, but the crypto market was in a very bullish condition at that moment, and investors wanted more so as to make a better profit.

[Dunamisx]

What needed to be considered here is the total supply in respect to the coin in circulation, when we do the mathematics, we are going to see that some developers will encourage for their token burning in other to effect the circulation so that the price could push up a little and then burn a particular amount to make the demand increase, but when a project is left without being utilized like that, it becomes dumped by users and this is not good for its value as it will continue to decrease except they burn some particular amount.

[el kaka22]

Normally it should, because we are working with less supply, but it is a long term thing and not a short term thing. Because if a project dev has bunch of tokens to burn, that means they already had it, we are not talking about "buyback" we are talking about burning.

It means, the project may just have tons of their own token and that could be the problem for people, and when that is burned, it tells the market that the money will not be going back into the market, and that is a great thing for the long term. However it doesn't matter for short term, why? Because it was already not inside the market, it was taken out of the market and was with the project, so the price wouldn't change for the short term.

[MAAManda]

If we're to go by averages how effective do you think burning tokens is for the token and especially for people that hold the token?

Is it something that's beneficial most of the time? because that must be the incentive for all the hype I've been seeing online about BGB burning their token in this quarter. Of course it concerns me, I also bought it just before the surge last year, and although the price dropped a bit, it looks like people expect another price surge as a result of the burn.

I don't want to get ahead of myself because I'm also a holder, but if that is the case, then it is definitely good news

Ok, another Bitget Token (BGB) shilling, no problem .

Token burning is very profitable from the side of token holders, it's because the supply that should be at a certain amount is reduced. When demand is greater, while the available goods are only a few, of course it will increase the price (that's the market theory). So it's clear that burning is very profitable for holders, but it comes back to the development of the project, if the project lacks development, then don't expect the token price to increase.

[TastyChillySauce00]

Burning is just following the basic economic principle of supply and demand.
By burning, the team behind the project token want to reduce the supply to increase the value of it, but in reality it only works for coin that's being sought after.

You can be burning half of your total supply but if nobody care about your project, then the price will still dump .

However, most of the time the investors and traders already considered the long term burning projection and value the token based on it, this results in burning mechanism to not work and become a gimmick.

[btc_angela]

If we're to go by averages how effective do you think burning tokens is for the token and especially for people that hold the token?

Is it something that's beneficial most of the time? because that must be the incentive for all the hype I've been seeing online about BGB burning their token in this quarter. Of course it concerns me, I also bought it just before the surge last year, and although the price dropped a bit, it looks like people expect another price surge as a result of the burn.

I don't want to get ahead of myself because I'm also a holder, but if that is the case, then it is definitely good news

It depends, in the beginning when this new algo was released, some might have benefited for it. However, as time goes by, it doesn't matter anymore as the price could still go down even if the tokens are being burn to benefit their investors.

I do agree that everything is based on the demand and not this algo. That's whey they are also also coins that had a max cap copying Bitcoin and yet their prices still stuck. So it boils down to the demand and the project itself.

[Bournesparks]

Of course, as long as there is a burning mechanism taking place in a token and its trading volume is good in the daily market, this is a good sign for holders of tokens like BGB, so this can be considered good news especially if the average number of burned coins is high.

Because there are usually kicks in its price in the future, and then another thing for me, BGB is also okay in reality and that's why it's one of the ones I'm holding right now,
even if I only hold a little of it as long as at least I have some of it.

The laws of economics states scarcity creates more demand yes? So I think that's the situation here. They're more utilities coming to bgb and more pecks for holders, I think you should add more since the price is at a discount now though..

Burning is just following the basic economic principle of supply and demand.
By burning, the team behind the project token want to reduce the supply to increase the value of it, but in reality it only works for coin that's being sought after.

You can be burning half of your total supply but if nobody care about your project, then the price will still dump .

However, most of the time the investors and traders already considered the long term burning projection and value the token based on it, this results in burning mechanism to not work and become a gimmick.

You're right.. burning should come with utilities and added benefits that'll make the token attractive to holders.

[rat03gopoh]

Token burning may have a temporary bump in price, well people think the law of supply and demand will kick in as supply is reduced. However it isn't an organic attempt to reach higher levels of value. Eventually people will realize that developers can't do anything more sensible to drive value than burning tokens.

[Reatim]

If we're to go by averages how effective do you think burning tokens is for the token and especially for people that hold the token?

it’s a complicated question because it involves different kinds of factors like what was the burn for? were there any long term plans around it or just wanting to manipulate the price for the short term period? because investors can profit off of price changes from token burning if they get their timing right

[AlphaBheta]

People should not let burning of tokens deceive themselves. You can easily see how it would be ineffective from these formulas:

Market Cap = Price of a coin * Circulating Supply.
If the supply is reduced, the marketcap will reduce.

Price of a coin= Marketcap/Circulating Supply
If the marketcap is reduced, the price will reduce back in a way that the burning will have no significant effect on the coin.

What that actually matters is demand.

I've also been thinking about how demand would play into all of these, and I'm glad you brought it up, because like I said, I've seen a lot of people talking up the burn, while that would have its benefit, I think the most impressive thing is the potential demand, because as an exchange token they've tied a lot of utility to it, and as the exchange user base continues to grow, it would reflect on the token.

In my head, I'm thinking this should be the primary area of interest, as nothing beats demand.

[AlphaBheta]

If we're to go by averages how effective do you think burning tokens is for the token and especially for people that hold the token?

Is it something that's beneficial most of the time? because that must be the incentive for all the hype I've been seeing online about BGB burning their token in this quarter. Of course it concerns me, I also bought it just before the surge last year, and although the price dropped a bit, it looks like people expect another price surge as a result of the burn.

I don't want to get ahead of myself because I'm also a holder, but if that is the case, then it is definitely good news

Ok, another Bitget Token (BGB) shilling, no problem .

Token burning is very profitable from the side of token holders, it's because the supply that should be at a certain amount is reduced. When demand is greater, while the available goods are only a few, of course it will increase the price (that's the market theory). So it's clear that burning is very profitable for holders, but it comes back to the development of the project, if the project lacks development, then don't expect the token price to increase.

To be fair, BGB makes up a good part of the tokens I hold, although its because I use them for access to stuff on the exchange, but that's not even the point, I just noticed the excitement around the burning, and I wondered if it was historical precedent of tokens that do this  that's causing that.

I like your point about development, and I still think that should be the most important factor when it comes to long term sentiments.

[Agbe]

I think burning of token refers to the removal of a token from circulation there by reducing the numbers of the total amount of Bitcoin in the market the significance is that it helps the price of the tokens to move up because this is simply economics when there is need or demand the price will surely increase so so in this case I think that the the holder of a token will benefit the more when tokens are burnt

[Lanatsa]

If we're to go by averages how effective do you think burning tokens is for the token and especially for people that hold the token?

Is it something that's beneficial most of the time? because that must be the incentive for all the hype I've been seeing online about BGB burning their token in this quarter. Of course it concerns me, I also bought it just before the surge last year, and although the price dropped a bit, it looks like people expect another price surge as a result of the burn.

I don't want to get ahead of myself because I'm also a holder, but if that is the case, then it is definitely good news

I thought it is just some another thread for shilling out for Bitget again, so i did made out some search about their burning.


Bitget , the leading cryptocurrency exchange and Web3 company has successfully completed the initial burn of its native Bitget Token (BGB), reducing the total supply by 40%. This strategic move involved burning 800 million BGB tokens, effectively decreasing the total supply from 2 billion to 1.2 billion tokens. The burn process was executed by transferring the tokens to a designated burn address, ensuring their permanent removal from circulation.

The distribution of the burned tokens was as follows: 19% originated from holdings by the core team, while the remaining 21% comprised tokens from both circulating supply and additional core team reserves.
https://www.bitget.com/news/detail/12560604465157

So the burning have already done on last year and having that 2B supply overall to be lessen into 1.2 on which i could say that its a nice move, but one thing that i dont really like to see that they have that 40% on which its owned by the team. Imagine on the bolded points above 40% from breakdown of 19% for core and 21 for reserves. They might be able to get some negative words or stuffs from the community or investors and thats why they have decided to burn their allocation? Actually it is really just that too much if basing up on core team should be owning on a certain project on which they can manipulatively dump and made out such big impact whenever they have decided on doing that.

So in regarding about on the question on how burning the supply do affects out price? Of course it will be still basing up on the demand and recognition because if the demand is high and the supply has been cut for 40% then expect that the supply getting smaller as the demand is increasing then its no brainer that each token value would be raising up. So everything will be that depending or according into the demand of $BGB if its really that still getting that much demand with less total circulation then we can project out on whats the value of it and pretty sure could reach up even more higher than with its all time high.

[CroverNo01]

If we're to go by averages how effective do you think burning tokens is for the token and especially for people that hold the token?

We have completely different activities when it involves projects in the market, we just cope with the ones that we feel is uncomfortable for our existence and push for exploring alternatives. Burning of tokens is a basic necessity that's been carried out to swiftly boost the price of the token just for gigantic profits, not everybody is opportune to experience this special memorable time where you get to wear a smiling face. What can we offer to the market? We have alot going on already and how we can cope with the market when the bear season is kept at a distance.