In light of the significant demand for blockspace, Binance has reintroduced Bitcoin withdrawals; however, to expedite the process, the fees associated with withdrawals have been increased.
Due to a substantial backlog of pending transactions on the Bitcoin blockchain, Binance has raised its BTC withdrawal fees. The leading crypto exchange, which halted bitcoin withdrawals twice on Sunday, experienced a surge in unconfirmed transactions. These are transactions that have been submitted by users but are awaiting processing by the network’s miners. The blockchain’s “mempool,” which stores unconfirmed transactions, hit an all-time high on Monday morning, with a record 444,000 transactions pending.
During times of high competition for Bitcoin blockspace, miners tend to prioritize transactions with higher fees. Binance did not anticipate the surge in demand, resulting in longer withdrawal times.
According to YCharts data, the average transaction fee has increased nearly five-fold since March, reaching its highest level in two years. Currently, the transaction fee is $19.21, representing a staggering 789% increase compared to the same period last year. The surge has been attributed to an influx of Ordinals inscriptions and BRC-20 mints.
To alleviate similar situations in the future, Binance stated that it is working to enable Bitcoin withdrawals on the Lightning Network, a layer-2 network designed to make transactions faster and cheaper.
Binance intends to provide an update once all pending transactions have been processed.
A Binance representative declined to provide additional information beyond the company’s Twitter updates, but did confirm that “BTC withdrawals have been resumed.” Blockworks has sought clarification on the modifications made to the withdrawal fees.
Bitcoin’s price has decreased by 3% in the last five days, trading at approximately $28,000. Despite this, the cryptocurrency remains up 70% year-to-date.