In a recent twist that sent shockwaves through the cryptocurrency world, a Binance-connected wallet, bearing the name Binance 14, emerged as the epicenter of an unexpected surge in Ethereum gas fees. Etherscan data unveiled a flurry of transactions originating from this wallet, swiftly driving Ethereum gas fees to unprecedented heights. These astronomical fees didn't spare even simple Peer-to-Peer (P2P) transactions, which saw their costs balloon from a mere 40 cents to around $10, as reported by data from Dune analytics.
Meanwhile, Cryptocurrency enthusiasts and market watchers alike were left in awe as two dormant Ethereum wallets suddenly awakened from their slumber, unleashing a flurry of cryptocurrency activity that raised eyebrows across the industry. One of these wallets, dormant for an astounding two years, embarked on a selling spree of its ETH holdings, while another cryptocurrency whale, a participant in Ethereum's 2014 initial coin offering (ICO), began redistributing their substantial ETH riches, some of which found their way to the Kraken exchange.
The large transfers have had a negative effect on the price of ETH. The cryptocurrency price tracking website CoinStats indicated that the altcoin leader suffered a 24-hour loss. Furthermore, this negative daily performance had pushed ETH weekly performance further into the red zone.
Binance-Connected Causes Ethereum Gas Fees to Skyrocket
A Binance-connected wallet, identified as Binance 14, recently grabbed the attention of the cryptocurrency world as it caused Ethereum gas fees to surge by an astonishing 1,900%. Data from Etherscan revealed a flurry of transactions associated with this wallet, leading to an unexpected spike in transaction costs on the Ethereum network.
Within a short time frame, Ethereum gas fees skyrocketed from a modest 15 Gwei to an eye-watering 300 Gwei. This significant increase also impacted simple Peer-to-Peer (P2P) transactions, which surged from the typical 40 cents to approximately $10, according to data from Dune analytics.
Etherscan data further highlighted that the recipient wallet, known as Binance 14, received Ether from wallets that had remained inactive for nearly three years. These transfers lasted approximately 20 minutes, and the subsequent surge in Ethereum gas fees disproportionately affected P2P transactions. Remarkably, the recipient wallet incurred over $840,000 in Ether gas fees within a 24-hour period.
The transfers were reportedly part of Binance's routine consolidation of Ethereum to one of its wallets. Binance, one of the world's largest cryptocurrency exchanges, explained that it typically aggregates wallets during periods of low gas fees to ensure the security of user funds. However, Binance acknowledged that the surge in gas fees was an "unintentional but quickly resolved" consequence of this process.
Despite this explanation, many traders were dissatisfied, expressing concerns about the Ethereum network's decision to bundle these transactions together and execute them sequentially. A more logical approach, according to critics, would have been to space out the transactions to prevent network congestion and the resulting fee escalation.
Ethereum gas fees are directly linked to the level of activity on the blockchain at any given time. The network also automatically increases the cost of submitting new transactions when there is a high volume of pending transactions—a measure designed to protect the network from spam attacks.
Notably, this event propelled Binance 14 to the top of the list of the 50 highest gas-consuming contracts or accounts in today's cryptocurrency landscape. One user acknowledged that Binance had overpaid for the transaction, further fueling the controversy surrounding the incident.
Meanwhile, Binance remains a focal point in the cryptocurrency community, with regulatory scrutiny intensifying. Authorities have been closely monitoring the platform for various alleged misdeeds, including potential fraud and violations of securities laws.
This development further adds to the growing list of reasons why critics continue to scrutinize Binance, as controversies continue to accumulate around the company. As the cryptocurrency ecosystem evolves, incidents like these serve as a reminder of the challenges and complexities associated with blockchain technology and its various participants.
Dormant Ethereum Wallets Spring to Life as Whales Move Millions
In addition to the large Biannce transactions, Ethereum's blockchain also witnessed the reawakening of dormant wallets, sparking speculation and interest across the cryptocurrency community. The on-chain tracking platform Lookonchain recently unveiled intriguing data surrounding two Ethereum wallets that had remained inactive for extended periods but have now sprung back to life, leading to substantial cryptocurrency movements.
One wallet, dormant for an astounding two years, suddenly came to life and initiated a series of ETH sales. Simultaneously, another cryptocurrency whale, who had amassed nearly 300,000 ETH during Ethereum's initial coin offering (ICO) in 2014, also reemerged and began shifting their substantial ETH holdings, some of which have found their way to the Kraken exchange.
According to a post by Lookonchain, this reactivated wallet came to life a mere four days ago. Immediately after awakening, the wallet's owner initiated the transfer of 10,000 ETH, valued at approximately $16.5 million, out of the wallet. This marked the beginning of an active phase for the wallet owner, who subsequently moved the same amount of Ethereum to three prominent cryptocurrency exchanges: Binance, OKX, and KuCoin, utilizing three separate wallets over the past four days. In a recent transaction over the past few days, the same wallet owner moved an additional 10,000 ETH from their wallet.
Lookonchain revealed another substantial Ethereum whale who has decided to divest part of their substantial ETH holdings. This whale originally participated in Ethereum's initial token offering (ICO) back in 2014, acquiring a staggering 254,908 ETH, which in today's market is valued at approximately $422.6 million. The whale, who initially secured these tokens for a mere $0.31 each, recently deposited 6,000 ETH, worth around $10 million, into the Kraken exchange.
These developments have sent ripples through the cryptocurrency community, with observers marveling at the potential implications of these significant transactions. The awakening of long-dormant wallets and the subsequent movement of substantial ETH holdings have fueled speculation about the motivations behind these actions.
While some speculate that these moves may be tied to profit-taking or portfolio rebalancing strategies, the cryptocurrency market remains as dynamic and enigmatic as ever. Ethereum enthusiasts and market analysts will undoubtedly keep a close eye on these developments as they unfold, seeking further insight into the evolving landscape of cryptocurrency wealth and investment.
Meanwhile, data from CoinStats indicated that the global cryptocurrency market cap dropped 0.33% over the past 24 hours. During this time, the price of ETH also slipped 0.91% - pushing its weekly performance further into the red zone to -2.08% as well. As a result of the latest price movements, the altcoin was changing hands at $1,595.88 at press time.
Price chart for ETH (Source: CoinStats)
ETH was able to break above the psychological $1.6K resistance level during the past day of trading, and reached a peak of $1,611.57, as per CoinStats data. Since then, however, it has retraced to trade at its current level. Despite this correction, ETH was still trading closer to its 24-hour high than its daily low, which sat at $1,570.13.
In addition to weakening against the Dollar, ETH also weakened against its biggest competitor Bitcoin (BTC) in the last 24 hours. At press time, ETH was down 0.55% against the leading cryptocurrency. This meant that 1 ETH token was estimated to be worth 0.05988436 BTC at press time.