Crypto News: Binance Increases Bitcoin Withdrawal Fees Amid Record Network Congestion
Binance, the world’s largest cryptocurrency exchange by trading volume, has increased its Bitcoin (BTC) withdrawal fees due to a backlog of pending transactions on the Bitcoin blockchain.
The exchange had to temporarily suspend BTC withdrawals twice on Sunday, as the surge in network fees on the Bitcoin network caused longer withdrawal times which was later resumed.
To ensure users’ transactions are processed by mining pools, Binance has raised its BTC withdrawal fees from 0.0002 BTC ($5.59) to 0.001 BTC ($27.94) per withdrawal.
The high demand for Bitcoin blockspace has resulted in miners giving priority to transactions with higher fees attached. The average transaction fee has risen nearly five times since March, reaching its highest point in two years. This increase is due to the influx of Ordinals inscriptions and BRC-20 mints.
To alleviate similar future scenarios, Binance is working to enable BTC withdrawals on the Lightning Network, a layer-2 network designed to make transactions faster and cheaper.
The exchange expects to provide another update once all pending transactions have been processed.
Bitcoin’s price has dropped by 3% over the past five days to around $28,000. Nevertheless, it has increased by 70% year-to-date. Despite the price drop, the cryptocurrency market remains optimistic, with investors expecting a bullish trend to return soon.
By raising BTC withdrawal fees, Binance aims to ensure the smooth processing of transactions for its users. However, the high fees underscore the need for a long-term solution to the scalability issues that Bitcoin and other cryptocurrencies are facing.
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