The world’s largest exchange has decided to suspend Bitcoin withdrawals. The official explanation has been provided by Binance itself, which explains that it has closed the withdrawals due to a “large volume of pending transactions”. It is not a one-time event, since less than 24 hours before it had already paralyzed these movements due to “serious congestion” in the network.
The Bitcoin network is experiencing moments these days that are reminiscent of 2021, when Bitcoin reached its all-time high price. Although, even then, Bitcoin withdrawals from the platform were not paused. Yes it had happened at other times, but current network congestion is quite exceptional.
Too much activity on the Bitcoin network
At all times, Binance has tried to reassure users that the funds are safe and that there is no compromise.
The technical team of the exchange have been working on it and the withdrawals are already operational again.
The congestion of the Bitcoin network is, according to data from Mempool.space, at its highest point in recent months, reaching levels of 230 sat/byte. A level of congestion that has not been seen since 2021, when Bitcoin reached $69,000 in exchange and the volume of transactions was very high.
According to data from Dune Analytics, 320,000 blocks have been added to the Bitcoin network in the last few days. And since a few weeks ago, 4.3 million have been added. It is a huge leap that clashes with what we had in recent months.
Approximately, this month the number of transactions per day has doubled compared to what we had at the beginning of the year.
Entering unknown territory
For what is this? There seems to be a pretty clear answer: ordinals. Based on this new protocol, it is possible to create BRC-20 tokens on the Bitcoin network. An addition that opens many possibilities but is stressing the network.
As GlassNode explains, these ordinals (loosely described as the NFTs in Bitcoin), have caused the hourly transaction record to be broken, reaching 16,497.
“If fees go up, more will use network congestion as an excuse to avoid withdrawals,” explains a Bitcoin Core developer.
Beyond the value of the cryptocurrency, we are in a very particular moment for Bitcoin, where the effects of that Taproot update that promised so many changes are beginning to be noticed.