Exchange temporarily halts Ether withdrawals as gas fees hit new highs

Average gas fees hit a new all-time high of $17.5 per transaction on Feb. 3, triggering some exchanges to halt Ether and ERC-20 withdrawals.

Japanese cryptocurrency exchange Liquid has temporarily disabled Ether (ETH) withdrawals as the altcoin hits new all-time highs.

According to a Feb. 4 announcement, Liquid has halted withdrawals for ETH and some ERC-20 tokens due to a massive spike in transaction costs, or gas fees. “Service will be resumed once gas fees return to normal levels. All other crypto currencies are operating as per normal,” Liquid said.

On Feb. 4, ETH price posted another high of above $1,600, following propelled growth of nearly 20% over the past seven days. The growing price has been steadily driving transaction costs higher, hitting new historical highs.

According to data from YCharts, gas fees reached an average $17.5 per transaction on Feb. 3.

*Ethereum Average Transaction Fee. Source: YCharts*

As previously reported, gas fees started to see significant growth in early January 2021 when Ethereum broke its previous record of above $1,400.

The latest spike in gas fees has had a massive impact on a number of decentralized finance projects, with some DeFi transaction fees surging above a$1,000. Fees on major decentralized exchanges like Uniswap and SushiSwap surged to abnormal levels of between $40 and $75. Looking for lower fees, DeFi users have reportedly turned into Ethereum alternatives like Flamingo.

Kain Warwick, founder of Ethereum-based synthetic asset issuance platform Synthetix, expressed confidence that surging ETH fees will even drive transaction volumes higher:

“Obviously we need to see what the user behaviour is when fees are not subsidised by I strongly suspect that the tx volume will only increase from here. Right now you can’t do much but sit and mash the mint button.”

At publishing time, Ether transaction volumes amount to $44 billion, up from $37 billion on Jan. 28. The second-largest cryptocurrency is trading at $1,639, up 6.3% over the past 24 hours at the time of writing.