The increase in crypto activities, which had seen trading volumes plummet high, is becoming prevalent in the Blockchain space. The sole reason for this is that the mass adoption of digital assets is on the rise, and hence, investors and traders are trying to make the best use of their assets in generating profits. Surprisingly, in a new report gathered, Japanese leading cryptocurrency exchange, Liquid, has halted withdrawal operations of Ethereum holders. The main cause of the latest development by the QUOINE owned exchange is high gas fees associated with the token’s network.
Increasing Ethereum token prices have taken its toll on gas prices
The new development by the exchange, who offer crypto service for Bitcoin, Ethereum and several other cryptocurrencies, has not affected the trading of any other token on its platform. In a public release by the exchange, it apologized to its customers, sighting that the high gas fees were a major determinant in its new decision and that things will return to normal immediately after it normalizes.
The growing prices of the Ethereum token Ether, which crossed above $1650 in the last 24hours, has been touted as a reason behind the high transaction volumes of recent. The increase in the gas fees was first observed in the early part of the year when the price of Ethereum started to pump up.
The impacts of the high gas fees have also been felt by many DeFi projects that have started to look for alternative means to work on. Flamingo has been touted as the closest alternative to Ethereum, and many DeFi users are considering the possibility of working on the network. Despite the variations in gas prices from several exchanges and decentralized exchanges, average gas prices are still pegged at about $20.
Gas fees might not drop anytime soon
In the statement of Liquid exchange, they affirmed their customers that the gas prices would return to normalcy soon. However, many analysts disagree, as the general belief is that the higher the price of Ether, the more the transaction volume. Higher transaction volume also indicates that gas fees might go up.
In the statement of Synthetix CEO Kain Warwick, he believes that high Ethereum fees will only imply that transaction volumes will go up and urges everyone to expect nothing less. The future of Ethereum has been predicted to be a bright one by many analysts and investors who have high hopes for the second most valuable cryptocurrency.
The king of altcoin has started the year brightly and has outperformed the giant since the beginning of the year, even when compared to Bitcoin. However, the growing concerns of gas prices may slightly affect its operation, except something is done. The general belief around the situation is that the higher the price of Ethereum, the higher the transaction, which means the gas prices will go up. Enthusiast and analysts will hope that this will not be detrimental to the growth of Ethereum.