On Monday, the largest cryptocurrency exchange in the world, Binance, stopped Bitcoin withdrawals for the second time in less than 12 hours. The reason for the interruption was due to blockchain congestion caused by an overwhelming amount of pending transactions. Binance on Twitter stated that the pause was a result of a substantial number of withdrawal transactions that have yet to be processed.
Increasing Gas Price
Gas fees are expenses incurred by users of blockchain to compensate validators for each transaction conducted on the network. Recently, Bitcoin experienced a surge in gas fees due to the increasing popularity of BRC-20, a new token standard that led to the introduction of several memecoins this year.
Current on-chain data indicates that the Bitcoin network has almost 500,000 pending transactions due to high gas costs. These recent events have created selling pressure on Bitcoin, resulting in a price drop of over 2% in the past 24 hours. Currently, Bitcoin is trading at $28,173 and has a market capitalization of $546 billion.
On Sunday, Binance temporarily halted BTC withdrawals for around 90 minutes due to congestion on the Bitcoin blockchain. Despite this setback, Binance has seen impressive trading volumes in the past day, exceeding $6 billion – five times more than their closest competitor, OKX.
Binance has assured its users that their funds are secure and has taken steps to ensure that pending BTC withdrawals are processed by the mining pool through higher fees. The exchange has also tweeted that their team is actively working to resume transactions within the next hour.
All about BRC-20
Earlier this year, a programmer nicknamed “Domo” released BRC-20, a platform that allows individuals to launch new tokens on the Bitcoin blockchain. This resulted in the emergence of several new memecoins, sparking a fervent trading atmosphere as users competed to be early adopters of the latest wave of tokens.
As a consequence, trading activity on the Bitcoin blockchain surged, causing gas fees to reach nearly two-year highs. Regrettably, it also exposed traders to a plethora of new pump-and-dump schemes, which are a frequent occurrence in the crypto market.
Binance added a number of the new memecoins created under the BRC-20 standard, including the popular PEPE token. However, the exchange also warned users about a possible speculative bubble, stating that the tokens lacked utility.