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Why Cryptocurrency OKB Has More Than Doubled This Week
Key Points
Since last Friday, OKB (CRYPTO: OKB), the native cryptocurrency of the crypto exchange OKX, has risen close to 108% as of 1:22 p.m. ET Thursday. The main reason for the move is because OKX plans to eliminate tens of millions of OKB tokens.
A Key Part of One of the Largest Crypto Exchanges
The San Jose-based OKX crypto exchange is the second-largest cryptocurrency exchange in the world based on daily trading volume. In 2018, the exchange launched a native token called OKB with a fixed supply of 300 million that is regularly reduced through burning and repurchases. OKB started as an ERC-20 token, meaning it was built on Ethereum's blockchain, but later started trading on OKX's own blockchain.
OKB is used by OKX for different programs on the exchange and has been integrated by financial service providers, payment processors, and even some merchants, among other businesses.
The big reason for OKB's move this week is linked to OKX's decision to eliminate over 65 million OKB tokens through a one-time burn from previous repurchases and Treasury reserves. Following this, OKB will have a total supply of 21 million, creating a strong move based on new supply-and-demand dynamics.
Scarcity is a Powerful Tool
It is interesting that the new fixed supply of OKB is similar to that of Bitcoin, the world's largest cryptocurrency. As of this writing, OKB trades for $93, which is much cheaper than Bitcoin. Could investors who believe in Bitcoin as a form of digital gold latch on to OKB as a cheaper crypto hedge against inflation? It's possible, but it is uncertain if any cryptocurrency, including Bitcoin, can hedge inflation.
While OKB has attractive characteristics, caution is advised after such a big move. It is still too early to invest anything more than a smaller, more speculative position that one is prepared to lose.
Should You Buy Stock in OKB Right Now?
Before buying stock in OKB, consider this: The Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks for investors to buy now, and OKB wasn’t one of them. The 10 stocks that made the cut could produce strong returns in the coming years.
This article has been published in fool.com via Yahoo News.
