Inflationary mechanism has been widely considered as one of the major deciding tool for rise in token value. Ethereum for example, uses both deflationary and inflationary mechanism. The inflationary mechanism which is primarily token-burns was introduced recently to control supply. While Ethereum inflationary mechanism employs token-burns from network fees, other projects do either, quarterly or yearly burn like BNB and BGB.
In Q4 of 2024, we saw how BGB for instance, rose from $1.4 to $8.5 after the Q4 burn of the token. Now, there is another burn on the horizon for the same token, coming up in Q2 of 2025, but the burning question is "will this burn contribute immensely to the token price as it did last year?
In Q4 of 2024, we saw how BGB for instance, rose from $1.4 to $8.5 after the Q4 burn of the token. Now, there is another burn on the horizon for the same token, coming up in Q2 of 2025, but the burning question is "will this burn contribute immensely to the token price as it did last year?
Tokens burns don't necessarily cause market prices to rise. It all depends on demand. If there's low demand for a token, don't expect a "pump" to occur anytime soon. Believe me, I've seen this happen many times. For instance, there's a coin called Garlicoin with a limited supply which never reached the "double digits". That's because there was no demand for the cryptocurrency, leading market prices all the way down the drain. DASH is in the same boat. Even Binance's periodic burns of BNB's supply hasn't had any effect over market prices. BNB still sits below $1k, ranked as the 5th largest coin by market cap.
At least, tokens burns help tame down inflation. It raises the possibility of higher market prices in the long run (subject to demand). Who knows which will be the next token/coin to be burnt by its developers?
Fun fact: 42 is an old coin with a very finite supply of 42 coins. Current market price hovers around ~$86k. Insane, isn't it?
Doesnt matter whether you would be that that burning 80% or even 90% of the supply as a developer but still it wont be that enough for you to make sure that the coin/token value would be having that guaranteed price increase. It all matters about demand in the end of the day because if demand is that keeping still or increasing and the supply is that decreasing then it would be just that talking about some simple economics lesson on here on which it would be that understandable on this case. Its never ever a solid indication that the price would be shooting up just because it do make that supply that less or having those burning event but in the end of the day on which we know that it would be that depending or basing up on the demand and this is something that you do always consider when you are investing into it.
I've been through different projects that have experienced with those burn of tokens but ending up on having no effect just because there are no new investors that do flow in and make out some investment or holding into such project. There are just that those times that people do easily get hyped up whenever they do hear out some talks about burning event or what.