Crypto exchange Bitget has completed the initial burn of its native token, BGB. This reduced the total supply of BGB by 40% in an attempt to increase its value in the long term.
BGB is an ERC-20 token that operates on the Ethereum blockchain.
All About Bitget’s Token Burn
On December 30, Bitget announced that it burned 800 million BGB tokens, reducing the total supply from 2 billion to 1.2 billion tokens. The burnt tokens were worth nearly $5 billion.
“The completion of Bitget’s first-ever BGB burn, destroying 800 million tokens—40% of the total supply stands as a defining moment in our journey to build a sustainable and impactful token economy for BGB. This step aligns with Bitget’s goal of building long-term value for users by maintaining transparency and providing high utility for BGB,” Bitget CEO Gracy Chen said.
Token burn is the process of permanently removing a certain number of cryptocurrencies from circulation by sending them to wallets where they cannot be spent or recovered.
The move is an attempt to control the price of tokens. Many crypto teams burn tokens to keep up the demand, and the token price grows over time.
For instance, the price of memecoin BONK rose by 25% in July following a proposal to burn 84 billion tokens from the Bonk DAO treasury.
Bitget has also outlined a quarterly BGB burn mechanism which will commence in 2025. According to this plan, Bitget will use 20% of quarterly profits from exchange and wallet operations to repurchase and burn BGB tokens.
Following each repurchase, the acquired BGB tokens will be destroyed by sending them to a burn address.
Separately, earlier this week, Bitget announced that it will merge its two tokens, Bitget Token (BGB) and Bitget Wallet Token (BWB). The news even pushed BGB to an all-time high of $8.49.
BGB was a top-performing coin in December, as its price rose by over 260% in 30 days. On December 1, BGB was trading just around $1.6. According to TradingView, the token was trading at $5.75 at press time.
With a market cap of $8.56 billion, the Bitget token is now the 25th largest cryptocurrency.
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