Amid the ongoing spike in Bitcoin (BTC) transaction fees, some cryptocurrency exchanges have moved to adjust the cost of withdrawing BTC from their platforms.
The United States-based exchange Kraken has increased Bitcoin withdrawal fees to match the current fees on-chain, the company’s customer support manager wrote on Reddit on May 10.
“This helps ensure withdrawals are processed on-chain in a timely manner,” the support manager noted.
Kraken’s representative also referred to the company’s public list of cryptocurrency withdrawal fees and minimum withdrawal amounts. According to the data, Kraken charges 0.00035 BTC, or about $10, for a Bitcoin withdrawal, with a minimum amount of 0.0005 BTC, or $13.
Kraken Support on increasing BTC fees. Source: Reddit
The minimum BTC withdrawal amount on LN also significantly differs from non-Lightning BTC, starting from as low as 0.00001 BTC, or less than $1.
The support manager also advised customers to consider using Lightning Network (LN) as an alternative. Adopted by Kraken in March 2022, the LN option allows users to withdraw BTC from the platform free of charge.
Bitcoin withdrawal fees and minimum withdrawal amounts on Kraken. Source: Kraken
Kraken’s public withdrawal fees are significantly smaller than those of other major exchanges. Crypto exchange OKX charges between 0.00096 BTC ($26) up to 0.00192 BTC ($53) for a Bitcoin withdrawal, a spokesperson for OKX told Cointelegraph. The minimum withdrawal amount is 0.001 BTC, or $27.
OKX declined to comment on whether the exchange will increase withdrawal fees due to skyrocketing Bitcoin transaction costs. The platform also implemented LN in 2022 though.
Kraken isn’t the only exchange that has adjusted BTC withdrawal fees amid the ongoing memecoin trading frenzy though.
Crypto exchange KuCoin uses dynamic adjustment for BTC withdrawal fees and minimum withdrawal amounts, a spokesperson for the firm told Cointelegraph on May 10. The adjustment is based on the amount of actual processing fees on the chain, so that Kraken is “compatible with the market situation,” the representative noted.
“As of this moment, our withdrawal fee is between 0.00002 and 0.001 BTC and the minimum withdrawal amount is 0.0005 BTC,” the spokesperson stated, adding:
“With regard to implementation of Lightning Network, KuCoin has not yet deployed LN, however we will actively monitor the market and make adjustments if needed.”
KuCoin’s current Bitcoin withdrawal fees are similar to those implemented on other exchanges like Huobi or Binance.
“On-chain withdrawal fees are increased due to BTC network congestion. The current withdrawal fee is 0.001 BTC,” a spokesperson for Huobi told Cointelegraph on May 11. Huobi has also not implemented Lightning yet as well. “The Lightning Network is currently under discussion,” the Huobi spokesperson said.
According to public information, Binance also charges 0.001 BTC ($27) as a BTC withdrawal fee, while the minimum withdrawal amount is 0.002 BTC, or $55.
Despite relatively expensive BTC withdrawal fees, Binance has still experienced major issues with withdrawals amid the ongoing “memepool” congestion recently. On May 8, Binance was forced to halt withdrawals two times in 12 hours amid 400,000 transactions getting stuck on the Bitcoin mempool. The events have pushed Binance to seriously consider implementing LN.
Multiple exchanges, including Coinbase, Bybit and Crypto.com, didn’t respond to Cointelegraph’s request for comment.
Magazine: Asia Express: Justin Sun’s SUI-farming sins, PEPE’s wild run, 3AC’s oyster philosophy
As an expert in the field of cryptocurrencies and blockchain technology, I bring a wealth of knowledge and experience to the discussion. My deep understanding of the intricacies of these technologies allows me to provide insightful analysis and commentary on recent developments in the cryptocurrency space.
Now, delving into the article about Bitcoin transaction fees and their impact on cryptocurrency exchanges, it's evident that the ongoing spike in Bitcoin transaction fees has prompted several exchanges to make adjustments to the cost of withdrawing BTC from their platforms.
Kraken's Approach: Kraken, a United States-based exchange, has responded to the increased transaction fees by adjusting its Bitcoin withdrawal fees to match the current fees on-chain. The move aims to ensure timely processing of withdrawals on the blockchain. Kraken charges 0.00035 BTC (approximately $10) for a Bitcoin withdrawal, with a minimum withdrawal amount of 0.0005 BTC (or $13). Notably, Kraken introduced the Lightning Network (LN) option in March 2022, allowing users to withdraw BTC from the platform without incurring any fees.
Lightning Network (LN) Option: The article emphasizes the significant difference in withdrawal fees between non-Lightning BTC and Lightning Network (LN) transactions on Kraken. The minimum BTC withdrawal amount on LN is considerably lower, starting from as little as 0.00001 BTC (less than $1). The support manager recommends customers consider using LN as an alternative to minimize withdrawal costs.
Comparison with Other Exchanges: Kraken's public withdrawal fees are highlighted as being notably smaller than those of other major exchanges. For instance, OKX charges between 0.00096 BTC ($26) and 0.00192 BTC ($53) for a Bitcoin withdrawal, with a minimum withdrawal amount of 0.001 BTC (or $27). KuCoin, another exchange, employs dynamic adjustment for BTC withdrawal fees based on actual processing fees on the chain.
Issues with Other Exchanges: The article mentions that Binance, despite charging 0.001 BTC ($27) as a BTC withdrawal fee, has faced challenges with withdrawals amid the recent "memepool" congestion. Binance had to halt withdrawals twice in 12 hours due to 400,000 transactions getting stuck on the Bitcoin mempool. This has prompted Binance to consider implementing the Lightning Network.
Overall Landscape: While Kraken has actively embraced the Lightning Network to provide fee-free BTC withdrawals, other exchanges, including KuCoin, Huobi, and Binance, are grappling with increased on-chain withdrawal fees due to Bitcoin network congestion. The article underscores the ongoing challenges faced by cryptocurrency exchanges amid the evolving dynamics of transaction fees and network congestion in the broader crypto landscape.
