Topic: How burn token affect token price (Read 268 times)
After burning the tokens, it is obvious that the total number of tokens becomes smaller. Of course, because of this and the price of those who have remained growing. Fundamentals of economy, friend)
In general token burns should have a big impact on the price, however in Crypto currencies everything is so volatile and there are so many factors affecting the markets that it is sometimes hard to see "cause and effect.
Just in the beginning of march Oyster Protocol burned a large amount of tokens, a few days later the price dropped 30%.
Just in the beginning of march Oyster Protocol burned a large amount of tokens, a few days later the price dropped 30%.
How will burn token affect the price of token? 
Will the price become higher after burning token due to the reduce of supply?
Will the price become higher after burning token due to the reduce of supply?
As a general rule I would say yes to that. To show the same market cap and reduced number of coins has to have a higher price. The effect of a token burn might not always be instant as the trade volume and the actual use of the token also play a role. A coin/token with a pure currency function in its valuation is mainly relying on the perception on the market. There is tokens that have a value apart from that currency functionality like paying for specific products or items. Here a token burn should lead to a timely price reaction.
In general a token burn is a good thing. The rarer something is, the higher its price tends to be.
How will burn token affect the price of token?
Will the price become higher after burning token due to the reduce of supply?
Will the price become higher after burning token due to the reduce of supply?
it will affect the price because it gives investor confident that theres no other coins created that cause the price to fluctuate. it makes coin limited and you know supply and demand.
Usually, the price will increase after a token burn.
This is a double edged sword though. If news spreads quickly about a token burn, people will buy anticipating a price increase due to the burn. The price however might not increase because so many people are looking to dump, and when the price continues to not increase after a burn, a massive dump can ensue, dropping the price significantly
This is a double edged sword though. If news spreads quickly about a token burn, people will buy anticipating a price increase due to the burn. The price however might not increase because so many people are looking to dump, and when the price continues to not increase after a burn, a massive dump can ensue, dropping the price significantly
Most of the time burning of supply makes the price grow as it means scarcity. The law of demand and supply. But everything depends on the market though so sometimes it may not have any effect at all. Long term, you should be happy with it though.
True. The effect isn’t seen instantly after the coin is burned. If you hold for long term, definitely coin burn will affect price of the coin by small proportion or large depending on how good the project is and its demand in the market. March 31st a coin named TRON(TRX) is going through coin burn. I think this will definitely affect the price of tron coin and make it pump as tron has great technology and is a great project, moreover the team working on tron is great and hard working. All these factors show that trx is a great project and will have increment in price of its token in near future.
How will burn token affect the price of token?
Will the price become higher after burning token due to the reduce of supply?
In my own understanding, burning token would probably increase the value of such coin because it would decrease the circulating supply in the market. So, if the supply would become low chances are, price will go up. Will the price become higher after burning token due to the reduce of supply?
Burning tokens will result to good in those coin. As we already know that if it has low supply, the demand will be high. More people want that coin and it will be expensive because of low supply, thats why they burning coins to lower the circulating supply
It depends on :
The coin/token itself : I mean the way it's structured & its usefulness
The number of burnt coins : if the number is someway high then the price may increase .
The total supply : when it's too exaggerated ( unnecessarily) , the burning won't have a mentionable impact .
The coin/token itself : I mean the way it's structured & its usefulness
The number of burnt coins : if the number is someway high then the price may increase .
The total supply : when it's too exaggerated ( unnecessarily) , the burning won't have a mentionable impact .
I dont think burning the coins will affect the price. U could check the 'alive' coins in the market which stands for the amount of trading daily. Most of coins did not share a high daily trading amount.
How will burn token affect the price of token?
Will the price become higher after burning token due to the reduce of supply?
Yes, I think burning of token does affect the price of it. Burning of token means cutting down the circulating supply of a coin or token by some percentage. As the token is burned, the circulating supply of the token is reduced and hence, here the game begins of demand and supply. Now as the token is burned, supply is reduced and if the token is good , the demand keeps on increasing, thus increasing the price of the token after all. The smaller the supply, the greater is the price. Will the price become higher after burning token due to the reduce of supply?
Burning a token means that the tokens are getting destroyed from the total supply, which means that there are less coins that are ever going to be sold and this in short decreases the sell pressure on the coin and thus increases its value.
How will burn token affect the price of token?
Will the price become higher after burning token due to the reduce of supply?
We both know that the price of crypto currency are base on the rate of demand and supply. Meanwhile, Token burning is Proof of burn and is a protocol used by various altcoins/token owner to reduce the current available supply and once the available token supply is reduce it definitely pump the price of the token in market. Will the price become higher after burning token due to the reduce of supply?
Token burn reduces the available supply, so according to basic law of supply and demand, if the token has decent utility and the demand remains constant after token burn, then the price will shoot up
Kind of understand.
Does it share the similar concept of treasury stock?
It can affect the price if supply is low, also it makes sure supply will not increase in future.
Token burn would have the effect of reducing the coin supply and market capitalization. It would mean that your percentage share of the coin if you are holding some will increase. Token burn event sometimes move the price because others are making it a big deal and we know that every time there is a big event of a coin, it will caught attention and makes the price drive up temporarily. The unsold tokens if not burned has a tendency to drive the price down if released in the market and since the ones holding it are the developers then the ICO would look bad which is a disappointment for investors.
How will burn token affect the price of token?
Will the price become higher after burning token due to the reduce of supply?
Will the price become higher after burning token due to the reduce of supply?
Yes you are right that is the right thing to happen but we doesn't really don't know especially if those whales out there manipulated the price of the coins and stop it to rise the price.
Token burn reduces the available supply, so according to basic law of supply and demand, if the token has decent utility and the demand remains constant after token burn, then the price will shoot up
In my opinion if burn some token will affect the price because the supply will reduce, but this is also not guarantee because the main thing the price can go up is the fundamental of the coin and what benefits they will give to the token holder. I look in to Genesis Vision that only has total supply about 4 million token and the fundamental of the project also good and finally the price was going up to 35 times just a few month.
The main reason why token burning after ICO main sale takes place is to preserve the value of a particular token. If unsold (unpurchased) tokens were released to the market, or otherwise allocated without charge, that would inherently drive down the value of each token. Not burning tokens is therefore directly detrimental to any investors in that ICO. And so, not burning unsold tokens should be, and is, a deal breaker for all ICO investors with a grasp of basic math. But it's just one of the factors though that affects the token price.
Recently Oyster Pearl PRL burned 10M tokens last week so the max coin supply has been lowered and that's the case and the reason why investors are holding their PRL tokens because the supply is less and limited but the demand will spike soon when the main net is released to the public.
Token burning will ensure it's investors that unsold tokens will have no use in the market.
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