Global leading cryptocurrency exchange Binance retorted to the ongoing Bitcoin (BTC) network congestion by halting withdrawals on its platform twice over the past 24 hours.
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While this is a temporary measure, data has shown massive BTC outflows from the digital asset service provider. Robinhood, a California-headquartered financial service company, is caught in a similar web, recording several pending transactions and record-high fees.
Markedly, the huge outflows from Binance have sparked different reactions and speculations. Within the last two days, a total outflow of 200k has been reported from cryptocurrency exchanges with 190k from Binance, according to data from CryptoQuant. These 190,000 BTC is estimated to be worth approximately $5.5 billion based on the current market value of the coin.
Binance Huge Outflows Explained
Fortunately, the public and Binance users have no reason to fret as it was discovered that a reasonable percentage of those outflows were internal transfers to newly created Binance change addresses. According to Julio Moreno, CryptoQuant’s head of research, the withdrawal of two substantial transactions of 117,000 and 140,000 BTC sparked concerns among netizens.
Upon investigation, it turned out to be that the actual BTC outflow from Binance is way lower than what the crypto community feared. Moreno believes that the figure is just around 10,100 BTC.
Binance Plans to Leverage Lightning Network
Binance plans to make certain alterations to its fees to avoid a recurrence in the future. The exchange also assured the public of its commitment to keeping up with on-chain activity and effecting changes where necessary. Therefore, for the pending transactions on Binance, the digital asset service provider has decided to replace them with higher transaction fees to achieve faster transactions.
Also, Binance stated that it is already working on improving Bitcoin Lightning Network withdrawals. Notably, the network encourages faster and cheaper off-chain transactions. Once this is achieved, there will be a drastic drop in the rate of withdrawal congestion when demands are hitting the roof. Ultimately, this would enhance withdrawal efficiency.
Bitcoin Price Dips Amidst Huge Outflows
Within the last 24 hours, BTC price dipped by almost 3% and is currently trading at $28,133.48 based on CoinMarketCap’s data. At the same time, it seems investors are losing interest in the leading cryptocurrency as its trading volume has decreased by 13%.
If the digital currency remains steady and the market continues to mature, Bitcoin may possibly reach around $50,000 to $60,000 in the long term as predicted by TheCoinRise.
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