Binance, a leading cryptocurrency exchange, has made adjustments to its Bitcoin (BTC) withdrawal fees in response to a significant backlog of pending transactions on the Bitcoin blockchain. The exchange temporarily suspended BTC withdrawals on two separate occasions, citing the need to address the backlog effectively.
Pending Bitcoin transactions are those submitted by users but have not yet been added to the blockchain by the network’s miners. These unconfirmed transactions reside in the blockchain’s “mempool,” which recently reached its highest-ever count of 444,000 pending transactions.
During periods of high demand for Bitcoin blockspace, miners tend to prioritize transactions with higher fees. Unfortunately, Binance had not anticipated this surge in demand, resulting in longer withdrawal times for its users.
The average transaction fee has experienced a substantial increase, nearly five times higher since March and reaching its highest point in two years. According to data from YCharts, the current transaction fee stands at $19.21, indicating a staggering 789% surge compared to the same period last year. This surge has been attributed to an influx of Ordinals inscriptions and BRC-20 mints.
Binance aims to enhance the efficiency of Bitcoin withdrawals by implementing the Lightning Network, a layer-2 network that enables faster and more cost-effective transactions.
The exchange has resumed BTC withdrawals while processing pending transactions, promising further updates once the backlog is cleared. Although specific changes to withdrawal fees remain undisclosed, Binance’s Twitter account provides ongoing updates.
Bitcoin’s price has experienced a slight 3% decline in the past five days, hovering around $28,000, but it has demonstrated remarkable year-to-date growth of 70%, showcasing its resilience amid temporary challenges.