- A new report revealed that CZ has control over 64% of BNB’s token circulation
- Social volume and sentiment remained positive though
Binance has had one of its toughest years despite the crypto markets rallying, owing to the challenges it has faced on a litigious level. Despite this, however, BNB’s price movement has remained relatively stable over the last few weeks, with the altcoin not losing much of its market cap either.
Will that change now?
CZ has a lion’s share
According to a recent report by Forbes, former CEO CZ still holds a whopping 64% or 94 million tokens of BNB’s circulating supply. This dominance can be traced back to an initial allocation of 80 million BNB tokens to Binance’s founding team, with 46 million still under the company’s control.
Combined, CZ and Binance effectively hold a staggering 71% of the 147 million BNB currently in circulation.
This concentration of ownership translates into significant wealth for the former exec as well.
While CZ’s recent imprisonment reduces the immediate threat of a massive sell-off, one that could trigger a price correction, the high concentration of BNB ownership raises a significant concern for investors – Centralization. A high concentration of ownership in the hands of CZ and Binance gives them significant control over the price and future of BNB. This lack of decentralization can be seen as a risk factor for investors.
Moreover, if something happens to CZ or Binance, such as a security breach or a regulatory crackdown, the value of BNB could fall rapidly. This vulnerability to a single point of failure is a major drawback of a centralized cryptocurrency like BNB.
No negative reaction
That being said, at the time of writing, the price of BNB had not reacted negatively to the CZ holdings update. At press time, BNB was trading at $607.33, with its price marginally in the green.
Social activity spiked significantly over the last few days too, in the days following the CZ update. Surprisingly, reactions on social media platforms were positive as well, as evidenced by the rising weighted sentiment for BNB.
Realistic or not, here’s BNB’s market cap in BTC terms
Source: Santiment