Monday’s premarket trading saw a decline in shares of blockchain and cryptocurrency-related businesses after Binance temporarily stopped accepting bitcoin withdrawals due to high volume and increasing transaction costs.
The halts caused the biggest cryptocurrency in the world, bitcoin, to fall 2% to a one-week low of $27,900.
Coinbase Inc (COIN.O), a cryptocurrency exchange, sank 4%, and Bitfarms Ltd, a blockchain farm operator, fell 4.3%. As bitcoin prices fell, the value of cryptocurrency miners such as Riot Platforms (RIOT.O), Marathon Digital (MARA.O), and Hut 8 Mining (HUT.TO) decreased by 4.6% to 7.2%.
The biggest cryptocurrency exchange in the world, Binance, halted bitcoin withdrawals for three hours on Monday and an hour late on Sunday, claiming there were too many outstanding transactions because it hadn’t paid “miners” enough to record trades on the blockchain.
The business said that the fixed costs it had set had not taken into account the recent increase in gas fees paid to bitcoin miners, whose processing power is used to execute transactions on the blockchain.
Binance had stated that “our fees have been adjusted to prevent a similar recurrence.”
The company stopped accepting deposits and withdrawals in March due to technical difficulties.