Shares of cryptocurrency and blockchain companies dropped in value in the early hours of trading on Monday after Binance, the largest crypto exchange in the world, halted bitcoin withdrawals due to high volumes and increasing processing fees. The stops have pushed bitcoin, the largest cryptocurrency in the world, down by 2%, to a low of $27.900, a week ago.
The price of Coinbase Inc (COIN.O), a blockchain-farming operator, dropped by 3.6%. Bitfarms Ltd dropped 5.1%. Crypto miners include Riot Platforms (RIOT.O), Marathon Digital (MARA.O), and U.S. listed shares of Hut 8 Mining (HUT.TO), a cryptocurrency exchange, have seen their prices fall between 5.3% and 6.6%.
Binance closed withdrawals of bitcoins one hour after they were scheduled to open on Sunday. The company claimed that there were too many pending trades because they hadn’t paid enough to the so-called “miners” for them to record the trades onto the blockchain.
The company stated that its set fees were not in line with the recent increase in Bitcoin-network gas charges – payments made to crypto-miners whose computing power processes blockchain transactions.
“There were so much traffic congestion and also the gas fees were so high over the weekend … even by historical standards,” Oppenheimer’s Owen Lau told Reuters. Binance tweeted that it had adjusted its rates to “prevent a similar recurrence”.
In March, the company cited technical problems as the reason for suspending deposits and withdrawals.
Reporting by Jaiveer Singh Shekhawat; Editing by Devika Syamnath; Our Standards: The Thomson Reuters Trust Principles.