- A new report revealed that CZ has control over 64% of BNB’s token circulation
Social volume and sentiment remained positive though
As a crypto investor with some experience under my belt, I’ve learned that the crypto market is not always black and white. news of CZ’s significant control over BNB‘s token circulation raised red flags for me. With 64% of the circulating supply under his control, it’s hard not to see this as a centralization issue. This concentration of ownership translates into significant control over the price and future of BNB, which can be a risk factor for investors.
As an analyst, I’ve observed that Binance, despite experiencing a challenging year marked by legal issues, has managed to keep its BNB token’s price movement and market capitalization relatively steady in recent weeks. The crypto markets have rallied, but Binance’s troubles haven’t significantly affected the altcoin’s value.
Will that change now?
CZ has a lion’s share
As a researcher, I’ve come across an intriguing piece of information from a Forbes report. The former CEO of Binance, CZ, retains an impressive 64% or approximately 94 million tokens of Binance Coin (BNB) in circulation. This significant control stems back to the initial allocation of 80 million BNB tokens to Binance’s founding team. Currently, around 46 million tokens remain under the company’s ownership.
Together, CZ’s holding and Binance’s reserve account for approximately 71% of the existing 147 million BNB tokens.
This concentration of ownership translates into significant wealth for the former exec as well.
The current detention of CZ (Changpeng Zhao) from Binance lessens the imminent danger of a large-scale sell-off, potentially causing price adjustments. However, the extensive ownership of BNB by CZ and Binance creates a major issue for investors – Centralization. With such a high degree of control over BNB’s price and future, Binance holds considerable power in this market. This lack of decentralization is perceived as a risk factor that investors must consider.
Should something befall CZ or Binance, for instance due to a security incident or harsh regulatory actions, the price of BNB could plummet sharply. The reliance on a singular point of control is a significant disadvantage that comes with dealing with a centralized cryptocurrency such as Binance Coin (BNB).
No negative reaction
At present, the price of Binance Coin (BNB) has remained unchanged following the recent announcement about CZ’s updated holdings. Currently, BNB is priced at $607.33, showing a minimal increase.
As a crypto investor, I’ve noticed an impressive surge in social activity over the past few days, particularly after the recent CZ update. To my surprise, the response on social media platforms has been predominantly positive. This is clear from the increasing weighted sentiment towards BNB.
Realistic or not, here’s BNB’s market cap in BTC terms
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2024-06-15 22:15