After a token burn, the total supply of the cryptocurrency is permanently reduced, which can have several potential effects:
Potential Price Increase – If investors see the burn as a deflationary measure, it can create bullish sentiment, potentially driving up the token’s price. However, this depends on broader market conditions and demand.
Improved Tokenomics – Burning tokens can help regulate inflation and make the cryptocurrency more attractive for long-term holders by reducing supply-side pressure.
Psychological & Speculative Impact – Traders may react positively to burns, creating short-term price pumps, though the effect varies depending on the scale of the burn and the overall market sentiment.
Protocol Adjustments – Some projects have periodic burns as part of their mechanism (e.g., Binance’s BNB burns or Ethereum’s EIP-1559 fee burn), which can influence transaction fees and overall network efficiency.
So why has pengu not rise up in price action
The market doesn't always react immediately to token burns, and several factors could be influencing why PENGU’s price hasn't moved up significantly after the
Market Already Priced It In – If traders and investors were expecting the burn, the impact may have already been factored into the price before the official announcement.
Scale of the Burn – If the number of unclaimed airdrop tokens being burned is relatively small compared to the total supply, it might not have a major effect on price.
Overall Market Conditions – If the broader crypto market is bearish or stagnant, even a positive event like a burn might not trigger immediate gains.
Liquidity and Demand – A burn only reduces supply, but for the price to rise, demand also needs to increase. If there isn’t strong buying interest, the impact of the burn may be limited.
Investor Sentiment & Confidence – If traders perceive the burn as a routine event rather than a major shift in tokenomics, it might not generate enough hype to drive significant price action.
Delay in Reaction – Sometimes, the impact of a burn takes time to reflect in the market, as investors analyze the implications before making decisions.
What are your thoughts init
