Major bitcoin exchange Kraken has raised withdrawal fees to 0.0025 BTC, just under $7 at current prices, citing the value as its average cost of network fees per transaction.
In a circular to customers on Thursday, Kraken, which together with Coinbase is one of the US’s largest cryptocurrency exchanges, said the move “brings the withdrawal fee more in line” with costs.
“Kraken always pays a miner fee that is sufficient to ensure transactions are processed quickly. However, the average miner fee required to prioritize and confirm Bitcoin transactions has been increasing for some time without a corresponding increase in the fee we charge to clients.”
When a bitcoin transaction is broadcasted to the network, there is a fee attached to incentivize miners to include that transaction into their next mined block. The higher the attached fee, the higher the likelihood of a miner including the transaction to their block.
Kraken adds that the new updated withdrawal fee it will now charge customers is closer to the miner fees it sees.
Like Coinbase, Kraken is feeling the pinch from a combination of increasing fees and increased transaction numbers as a wave of new adopters come on board.
Along with Bitcoin, the withdrawal fee for USDT tokens also increased, coming in at 5 USDT as the token utilizes the same network.
Gnosis also came in for rises, this time to 0.004 GNO, Kraken saying this was due to a fall in the token’s value.
The move appears to be a precursor to what officials are calling “more dynamic” fees which will be active in future. These will track current miner fee rates, offering customers a suitable fee at the time of the withdrawal request along with more closely matching Kraken’s own costs.
“In the near future network fees for bitcoin (and possibly other tokens if needed) will be updated dynamically to better match the fee to our costs.” Kraken stated.
Reactions were predictably dry, with users suggesting trading and withdrawing other coins with lower fees, including Ethereum (ETH) and even Dogecoin, the latter attracting fees of around one cent.
Yesterday, Blockstream’s Adam Back suggested Bitcoin users would ultimately accept paying up to $100 per transaction.