Binance's Second Bitcoin Withdrawal Pause In 24 Hours Worries Crypto Community, Sends BTC, ETH Prices Tumbling

The crypto community was left worried after Binance, the world's largest centralized crypto exchange platform by trading volume, shared for the second time in 24 hours that it was halting Bitcoin withdrawals.

The announcement subsequently sent prices of major cryptocurrencies like BTC and ETH tumbling.

Bitcoin (BTC) and Ethereum (ETH) saw a decline in their values for a few fractions over the weekend, with the world's first-ever crypto asset down by 0.34% at $28,787 and Ether, the world's second-largest cryptocurrency by market capitalization, down by 0.4% at $1,913 following Binance's momentary halt in Bitcoin withdrawals, which was announced Saturday night.

Binance made another announcement about pausing Bitcoin withdrawals less than 12 hours after its first advisory, triggering an extended retreat in the prices of Bitcoin, Ethereum and other digital assets.

The exchange explained in a tweet that the decision had to be made because of the large volume of pending transactions. It then assured the crypto community, saying that it was "currently working on a fix and will reopen $BTC withdrawals as soon as possible."

After around 11 a.m. ET on Sunday, the exchange posted an update, noting that it was intending to resume Bitcoin withdrawals in the next hour by paying a higher fee so transactions would be picked up by Bitcoin miners, the rigs of computers that run the network.

Data from CryptoQuant revealed that Binance saw its highest-ever net daily outflow of BTC and recorded a net of 175,646 tokens Sunday.

The second announcement further sunk BTC's price by as much as 3% and saw the crypto asset trading at $28,070 before the closing of the weekend, with the 100 biggest crypto assets posting a similar fall in their values.

Binance then released the latest advisory, announcing the resumption of Bitcoin withdrawals following the second pause.

Since the exchange paused withdrawals, the number of unconfirmed transactions reportedly surged to 500,000 from approximately 400,000 at the time the first pause was announced.

The exchange admitted that the incident was "a learning opportunity" and told its users that it would do its "best" to prevent the same incident from happening again.

"To prevent a similar recurrence in the future, our fees have been adjusted," Binance said in a tweet. "We will continue to monitor on-chain activity and adjust accordingly if needed."

Binance also shared that its "team has also been working on enabling BTC Lightning Network withdrawals, which will help in such situations."

However, Binance's move did not sit well with the crypto community, with some people encouraging fellow users to remove their funds from exchanges. There were also those who resorted to blaming the exchange for causing the problem by not enabling lighting deposits.

Ethereum has seen a 1.69% loss over the past 24 hours and was trading at $1,864.63 with a 24-hour volume of $8,020,214,960 as of 12:27 a.m. ET Monday.

Bitcoin, on the other hand, has not left the $28,000 price level. Moreover, it has seen a 2.24% loss over the past 24 hours and was trading in the red zone at $28,243.12 with a 24-hour volume of $13,018,293,793 at around the same time, based on the latest data from CoinMarketCap.