It did not take long for the Kraken exchange to lower its Bitcoin withdrawal fees. Charging US$7 or more per transfer is way too expensive. After a lot of community backlash, the fee has now been cut in half. It is possible this number will decrease further before dynamic fees are introduced, though. With the rising Bitcoin price, fixed fees can quickly result in paying double-digit fees to withdraw a BTC balance.
It is good to see the Bitcoin community make its voice be heard. While people understand exchanges pass transaction fees to customers, flat fees are never a good idea. In the case of Kraken, that fee was 0.0025 Bitcoin just yesterday. However, the company received a lot of backlash over this number. At the time of writing, such a fee represented US$7 in costs. With the Bitcoin price rising, this fee only becomes more expensive.
Kraken Reduces Flat Withdrawal Fees By over 50%
Thankfully, the company has taken this feedback to heart. As of today, the Bitcoin withdrawal fee has been lowered to 0.001 BTC. Right now, this still represents a US$2.83 fee. It is a lot better compared to US$7, though. Bitcoin transaction fees have been on the rise for quite some time now. Until the scaling issue is solved, that situation will not improve by any means. It is good to see Kraken acknowledge the problem of a fixed fee, though.
The bigger question is whether or not the company will further reduce the fee in the future. We do know Kraken will introduce dynamic fees in the future. However, it is unclear when this will happen exactly, though. A withdrawal fee is the price we pay to avoid delays, though. One way to bypass these fees is by using a different currency to withdraw money and convert to Bitcoin later on. Litecoin is a good option in this regard, that much is evident.
Kraken is also the first exchange to lower its withdrawal fees. Albeit other platforms seemingly use dynamic fees already, they are still quite steep. it will be interesting to see if other platforms lower their costs as well moving forward. Making it too expensive for people to access their funds is not a positive development by any means. These problems need to be addressed sooner rather than later.
Header image courtesy of Shutterstock