What’s Happening on Binance? Bitcoin Transactions Stopped for the 2nd Time!

Binance, the world’s largest crypto exchange, stopped Bitcoin withdrawals for the second time in 24 hours. He cited a sudden increase in the Bitcoin network transaction fee for this. Here are the details…

Binance has stopped trading BTC

Binance stated in its latest tweet that they are pausing “large volume pending transactions”. He said the team is working to bring back BTC withdrawals as soon as possible. Currently, according to the data, there are half a million pending transactions on the Bitcoin network due to high gas costs. As we reported on Kriptokoin.com, Binance briefly stopped Bitcoin withdrawals for about two hours yesterday evening, as the number of unconfirmed transactions reached a record level. The second stop this morning also took a little over two hours.

Recent events have put some selling pressure on the Bitcoin price. The coin has dropped more than 2% in the last 24 hours and is currently trading at $28,228 with a market cap of $546 billion. On Sunday, May 7, Binance halted BTC withdrawals for about 90 minutes while blaming the congestion on the Bitcoin Blockchain. As a result, volumes on the Binance exchange exceeded $6 billion in 24 hours. In fact, it has reached five times that of OKX, the second largest crypto exchange.

Binance assured investors that the funds are “SAFU”. On the other hand, he added that they are replacing pending BTC withdrawals with higher fees for them to be received by the mining pool. The exchange recently tweeted that its team is working to resume trading within the next hour. Binance also said that they are considering enabling the Bitcoin Lightning Network to help in such situations. There were unconfirmed transactions numbering around 400,000 during the initial pause. This was approaching 500,000 when the second pause occurred. That number has now started to drop and is now just over 430,000 in a 12 hour period.

The stock market recorded a large amount of fund outflows

In the last two days, the total stock market outflow from crypto exchanges was 200 thousand. According to CryptoQuant data, Binance registered an outflow of 190,000, worth approximately $5.5 billion. However, the actual exchange exit from Binance is much lower as the exchange has taken several steps such as wallet transfers and enabling the Bitcoin Lightning network to continue BTC withdrawals. On Sunday, exit transactions such as 17 thousand and 40 thousand BTC drew attention. These funds went from Binance to other wallets.

However, Binance sent these BTCs to a newly created wallet address that actually belongs to Binance. According to Binance, these exits actually point to transactions between Binance hot and cold wallets due to BTC address adjustments. Actual exits are probably close to 10,000 BTC, which is lower than Binance exit values ​​shown on CryptoQuant. According to DefiLlama data, Binance has $16.99 billion worth of Bitcoin on the exchange. Total locked value (TVL) is $65.61 billion.

Did “Bitcoin Ordinals” clog the network?

In early 2023, Bitcoin developer Casey Rodarmor published a protocol called Ordinals that will help print NFTs on the BTC network for the first time. These have increased transactions on the Bitcoin Blockchain. According to Hayden Hughes, co-founder of social trading platform Alpha Impact, Ordinals has led to “a massive increase in network fees and congestion.” Interestingly, the use of Bitcoin Taproot, which makes transactions anonymous, increased on Sunday. Crypto journalist Colin Wu says that “the increase in Taproot adoption indicates that block sizes are increasing.” “This also means that it causes an increase in transaction costs,” he explains.