Before investing in some of the best deflationary cryptocurrency, you should familiarize yourself with all the pros and cons, including token burning, redistribution, and liquidity.

Find out how to choose deflationary cryptocurrencies and get some investing tips in this article, where we compile an updated deflationary cryptocurrency list.

Top Deflationary Crypto Coins List

  1. Bitcoin ETF Token (BTCETF) – Overall Best Deflationary Crypto will Burn 25% of its Token Supply
  2. Bitcoin Minetrix (BTCMTX) – Revolutionary Stake-to-Mine Crypto Offering Cloud Mining Credits
  3. Tamadoge (TAMA) – A Play-to-Earn Ecosystem with 5% Token Burn
  4. Terra Classic (LUNC) – Now a Deflationary Promising Crypto
  5. Binance Coin (BNB) – Big Cap Deflationary Cryptocurrency
  6. FTX Token (FTT) – Weekly Buy & Burn
  7. XRP (XRP) – Deflationary Cryptocurrency Used for Cross-Border Payments and Transactions
  8. Polygon (MATIC) – New Deflationary Cryptocurrency Since 2022

Reviewing the 9 Best Deflationary Crypto Coins

Below, we take a closer look at our list of the best deflationary cryptocurrencies and how they work:

1. Bitcoin ETF Token (BTCETF) 

Among the best deflationary cryptocurrencies is Bitcoin ETF Token ($BTCETF), an ERC-20 token that offers burn mechanics and staking rewards in correlation with the SEC’s approval of a new Bitcoin ETF (Exchange-Traded Fund). 

Bitcoinetf deflationary crypto

While the SEC is yet to approve the first Bitcoin ETF, Bitcoin ETF Token will offer community members exclusive earning opportunities as the ETF arrives. According to the Bitcoin ETF Token whitepaper – the project will burn 5% of its token supply on the completion of each of these 5 milestones: 

  • SEC approves the first Bitcoin ETF 
  • The first Bitcoin ETF is launched
  • Bitcoin ETF assets under management hit $1 billion
  • Bitcoin reaches an all-time high of $100K
  • $BTCETF reaches $100 million in trading volume 

Bitcoin ETF Token has a total supply of 2.1 billion, which will be reduced to 1.575 billion after the 5 milestones are met. Thus, the remaining tokens will increase in value, making the Bitcoin ETF Token an important deflationary cryptocurrency to hold. 

Furthermore, Bitcoin ETF Token will also charge a 5% trading tax on all transactions. The tax will be reduced by 1% as each milestone is met. $BTCETF investors can also stake their holdings on a verified smart contract and generate high annual yields. 

$BTCETF’s presale was divided into ten stages, each releasing 84 million tokens, and as of late December 2023 is sold out.

Follow the Bitcoin ETF Token Telegram channel to stay updated. 

2. Bitcoin Minetrix (BTCMTX)

The next cryptocurrency on our deflationary cryptos list is Bitcoin Minetrix ($BTCMTX). This new crypto project converges the world of cloud mining and token staking. Bitcoin Minetrix is the first to decentralize cloud mining by offering it as ERC-20 tokens that can be burned in the ecosystem.

bitcoin minetrix presale homepage

Bitcoin Minetrix has tokenized cloud mining into ERC-20 credits, which are recorded on a digital ledger. Investors can earn these credits by staking $BTCMTX tokens on an Ethereum-verified smart contract.

This deflationary cryptocurrency allows holders to burn their holdings in exchange for Bitcoin mining power.

Eventually, the power is used to earn allocated mining times, from which one can earn a percentage of mining revenues. This simple process reduces the entry barrier for earning rewards through cloud mining and offers high annual staking returns through the staking contract. 

From a supply of 4 billion tokens – 70% have been allocated across 39 presale rounds. at the time of writing, the presale has collected more than $6 million. After the presale ends, Bitcoin Minetrix will look to list the token on crypto exchanges. 

Read the Bitcoin Minetrix whitepaper and join the Telegram channel for more project updates. 

3. Tamadoge (TAMA)

Tamadoge is a virtual pets game in which players mint Doge pets as NFTs, each with different attributes, strengths and weaknesses, then nurture, feed and train them ‘Tamagotchi’ style from puppy to adult.

When players purchase food and accessories using the in-game currency TAMA in the Tamadoge store, 5% of the transaction cost is permanently burnt to reduce the total supply of TAMA tokens from 2 billion coins.

Tamadoge deflationary cryptocurrency

You can purchase Tama on Bybit and OKX via the platform’s centralized and decentralized cryptocurrency exchange.

Tamadoge is a deflationary token that helps users compete for top positions on the leaderboard.

Dogecoin achieved that despite being inflationary – Dogecoin technically has an infinite supply and a low inflation rate. Over the course of its price history since 2013, the total supply of Dogecoin has risen from 100 billion at launch to over 132.6 billion today.

4. Terra Classic (LUNC)

The original Terra (LUNA) token – before its crash alongside the collapse of UST – has now been renamed Terra Classic (LUNC).

LUNC coin may now be a safer crypto to invest in as it has announced a token burn to reduce its circulating supply – part of the reason it crashed was the hyper inflation of its total supply from around 350 million to 6.5 trillion – causing the price per token to decline over 99.99% in May 2022.

The new LUNA and old LUNA – rebranded as LUNC – also didn’t perform well immediately after the hard fork, since late May. However, as of September, the bullish LUNC news investors were waiting for finally materialized – when a token burn was voted on.

That will enable LUNC to become a deflationary cryptocurrency as of September 12th – with a 1.2% token burn reportedly set to be applied to all transactions on the network. Twitter Account ‘LUNC burn’ (@LunaBurn_13) also reported that 3.08 billion LUNC tokens had already been burned before that date.

See more in our guide on how to buy LUNC.

5. Binance Coin (BNB)

Binance Coin (BNB) is the native token of the largest crypto exchange in the industry by trading volume, Binance – which supports over 600 cryptocurrency tokens.

BNB itself has been one of the best performing cryptocurrency assets of all time, rising to the 5th highest market cap asset only behind Bitcoin, Ethereum, Tether (USDT) and USD Coin (USDC).

Binance Coin deflationary cryptocurrency

The Binance network regularly carries out a buyback and burn each quarter, whereby the Binance team decreases the amount of BNB tokens in circulation. Its 20th quarterly burn for example was completed in July during which 1,959,595.29 BNB were burned.

When it launched in 2017, the Binance Coin’s total supply was 200 million—as of March 2024, that is just 149 million, an almost 20% reduction. In December 2021, an auto-burn protocol was implemented to make the deflation rate even more transparent for traders.

6. FTX Token (FTT)

Another of the best-performing deflationary cryptos on its ALT/BTC pair is the native token of the FTX exchange, FTX Token (FTT).

The FTT/BTC chart closed a monthly candle above 0.00133 in August 2022 and is in one of the strongest uptrends of any crypto asset, partly due to being a deflationary cryptocurrency as well as the work Sam Bankman-Fried has done to build up FTX and stem crypto contagion during the 2022 bear market.

FTX Token deflationary cryptocurrency

FTX buys back FTT on its spot FTT/USD market, then burns it according to a weekly schedule beginning each Monday at 22:00 UTC and ending by 23:59 UTC+8 on Tuesday.

So far according to FTX exchange 19,916,646 FTT tokens have been burnt at the time of writing, a significant deflation of the circulating supply. Each week the burn transaction ID is listed on the website for transparency.

7. XRP (XRP)

Ripple’s XRP is on our deflationary token list, as transaction fees paid in XRP on the Ripple network are burned, permanently removing those XRP tokens from the circulating supply and total supply.

When Ripple first started trading in 2013, its maximum supply and total supply were 100 billion XRP – due to deflation the total supply today is 99,988,129,668 XRP.

XRP coin price chart december 2023

While the XRP deflation rate is relatively low, it was one reason for its popularity during the 2017 bull run alongside its low price per token.

XRP is still a top 9 crypto asset despite correcting from its all-time high of over $3 to just over $0.646 today.

XRP vs XLM is an often cited example of an inflationary vs deflationary cryptocurrency – XLM first launched with a fixed inflation rate of 1% annually, which was later removed. Protocol 12 was voted on to disable the inflation due to ‘operational costs associated with inflation payments’.

Another reason to purchase XRP, is many investors are optimistic Ripple will win its ongoing case against the SEC. In August 2022 Ripple also became a partner of the World Economic Forum.

8. Polygon (MATIC)

In January 2022 Polygon, an Ethereum side chain network, implemented the Ethereum EIP-1559 update within its ecosystem – that went live on the Polygon mainnet on January 17th.

The official Polygon blog at the time stated: ‘The much-anticipated implementation of Ethereum Improvement Proposal 1559 is coming to the Polygon blockchain, bringing with it burning of the native MATIC token and better fee visibility. Polygon deflationary crypto homepage

Users can now monitor Polygon burning through a public interface, Polygon Burn.

EIP-1559 is estimated to burn 0.27% of the total MATIC supply annually.

What is a Deflationary Cryptocurrency?

We know that decrease in supply results in an increase in value over time. So, what is a deflationary token? Cryptocurrencies with a deflationary model gradually reduce their circulating supply, leading to scarcity and higher value. A deflationary model also ensures that the digital finance industry will maintain balance with crypto assets over time. On the other hand, inflationary crypto assets increase their circulating supply over time through a minting or mining mechanism.

How Do Crypto Deflationary Models Work?

In a deflationary cryptocurrency model, the cryptocurrency’s overall supply decreases gradually through mechanisms like token burning or buybacks. This strategy aims to create scarcity, which can increase each token’s value, provided that the demand either remains stable or increases. Overall, it’s a way to boost the value of a cryptocurrency (deflation crypto) by reducing its supply over time.

  • By the law of supply and demand, if an asset decreases in quantity, its intrinsic value per unit increases
  • Scarcity and a finite, deflating supply are therefore bullish catalysts for token price
  • Inflationary assets or those with an infinite supply have struggled to hold their value – e.g. Dogecoin (DOGE), Green Satoshi Token (GST)
  • Many of the best crypto projects incorporate a regular manual or automatic token burn mechanism.

Conclusion

This guide has reviewed 8 of the top deflationary cryptocurrency tokens. Investing in some of the best deflationary cryptocurrencies can be smart as they retain their value due to the limited supply.

In contrast, investing in a cryptocurrency with no limit means there is no scarcity to drive demand, and the value is unlikely to increase.

It’s important to note that both inflationary and deflationary cryptocurrencies carry unique risks and challenges.

FAQs

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