The largest exchange on the planet, Binance, has just announced that withdrawals for the Bitcoin network will be temporarily halted due to the current congestion the network is experiencing.
In a statement released on the afternoon of May 7, the Binance team explained that they are working on a solution while the network stabilizes. They also explained that there is no date to resume withdrawals, as long as the congestion continues.
According to Mempool.space data, the network is at its highest congestion point in recent months, even reaching levels not seen since 2021, with an average of 200 sat/byte, around USD per transaction.
The current congestion situation is due to BRC-20 tokens, a standard that uses the Ordinals protocol to issue Bitcoin tokens.
The Bitcoin mempool was jammed with more than 400,000 transactions waiting to be processed at the time of writing. The mempool is known as the “holding area” for incoming transactions before they are independently verified by each node on the network.
The announcement, while eye-catching, is quite exceptional. In 2021, with Bitcoin soaring to its all-time high above USD 69,000, Bitcoin suffered the worst congestion in history. However, by this date, despite the situation, Binance did not take the decision to pause Bitcoin withdrawals from the platform.
Binance Resumes Withdrawals
Binance tweeted that BTC withdrawals had resumed after nearly an hour of standstill. According to CryptoQuant data Outflows on the cryptocurrency exchange peaked on Sunday, reaching USD 187 million.
Behind the congestion is believed to be a surge in transactions on BRC-20 in recent days due to memecoins such as Pepe (PEPE). The boom in memecoins transactions drove Bitcoin transaction fees to their highest point in two years.
On May 3, the total amount of commissions paid on the Bitcoin blockchain reached USD 3.5 million, which was a jump of nearly 400% since the end of April, Cointelegraph reported, this can be seen in a graphic called Bitcoin outflow on Binance over the past seven days published by CryptoQuant.
Developed from Ethereum’s ERC-20 token standard, BRC-20 is a recently introduced experimental token standard that allows users to create and transfer fungible tokens on the Bitcoin blockchain. It is currently becoming a hot spot for meme tokens.
CoinMarketCap data shows that PEPE’s price has risen more than 263% in the last week. However, at the time of writing, memecoin is down more than 7% after a 30% drop on May 6, when the whales benefited from Binance’s recent listing. Two weeks ago, cryptocurrency exchanges MEXC Global, Bitget, Gate.io, and Huobi listed PEPE trading pairs, kicking off the token fever.
Since the introduction of Dogecoin in 2013, memecoins have become an important part of the cryptocurrency world, making and ruining fortunes alike.
Investopedia defines a memecoin as a cryptocurrency represented “with comic or animated memes, which are supported by enthusiastic traders and online followers.”
On the other hand, memecoins has been attacking the major cryptocurrency networks and are the main cause of the congestion of Bitcoin, making related crypto partners take disproportionate decisions affecting the market and users.
By Marina Meza
