In an announcement via the Tron (TRX) Foundation medium page, the team at Tron made it known that they will conduct a coin burn of 1 Billion TRX all at once, to commemorate the exciting event that is The Tron Independence Day. This amount in TRX roughly translates to $50 Million worth of the digital assets.
According to the announcement, this amount might set world records for the highest amount of money or its equivalent, destroyed in human history at one go. The amount of TRX at the beginning of the MainNet launch will be reduced to 99 Billion TRX with the remaining 33,251,807,524 TRX held by the TRON foundation will stay locked until January 1st, 2020.
So how does this affect the price of TRX?
Considering the fact that the Tron Foundation will burn TRX from the amount in its possession, this act only reduces the total supply of TRX and not the circulating supply of the digital asset. When calculating the price of a stock or cryptocurrency, it is the circulating supply that determines the supply and demand dynamics that determine the price of an asset.
This means that the coin burn will not directly affect the price of the digital asset. All it does is guarantee that there is 1 Billion less TRX possessed by the Tron Foundation. Perhaps what might drive the price up, is the guaranteed lockup of the remaining TRX by the Tron Foundation. This will give investors more confidence in the digital asset.
One can remember the market response of the Ripple camp locking up 55 Billion XRP in escrow. This guaranteed that the company would not ‘flood’ the digital asset in the markets. Investors were pleased and the value of XRP went up for a good while until mid-January.
So how else will the price of TRX go up?
As earlier demonstrated by Global Coin report, the increase in the price of TRX will be brought about by a stable and secure MainNet blockchain that will be the choice of the many DApp developers out there. With a solid product, comes the attention to the project and coin. This is a manner similar to how Ethereum managed to climb up the market cap ladder from mid last year to the current number two spot according to coinmarketcap.com.
There is also the transactional TRX coin burn that was highlighted by Justin Sun during the launch of the MainNet on the 31st of May. There will be a burn of 0.1 TRX when a new account on the platform is created and transfers cost 0.001 TRX. This means with time, the circulating supply of TRX will gradually decrease hence pushing the price of the future TRX coin up.
That said, the value of TRX has been affected by the general decline of the cryptocurrency markets. TRX is currently trading at $0.045 and down 6.21% in the last 24 hours. Perhaps as we inch closer to the Independence day that is less than 2 days away, the price of the Token will reflect the excitement of the Tron believers and HODLers.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
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The post Here Is How The Tron (TRX) Token-Burn Will Affect The Price of TRX appeared first on Global Coin Report.
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