In the last 24 hours, the first cryptocurrency has fallen in price by almost 7%.
The drop in Bitcoin’s price was provoked by news about anti-government protests in Kazakhstan. It also followed the release of minutes from the Federal Reserve Board’s December meeting. Amid this news, Bitcoin fell to $42,645. The total decline in the evening of January 5 exceeded $3,000 for four hours. As of 3 p.m. (GMT+2), the first cryptocurrency is trading around $43,000, according to CoinMarketCap.
The political turmoil and protests in Kazakhstan caused a massive network blackout across the country and disruptions in the operation of mining farms. According to BTC.com, several hours of no internet resulted in a 12% drop in Bitcoin’s hash rate, according to BTC.com. Larry Cermak, a researcher at The Block, published similar figures.
According to Cermak, several major mining pools experienced the biggest drop in speeds:
- 1THash — 82%;
- OKEx Pool — 46%;
- KuCoin Pool — 23%.
The rest dropped by 10-20%. Recall that in August, Kazakhstan was the world’s second-largest center for Bitcoin mining — local miners provided 18,1% of the network’s hash rate. BitMEX Research analysts have already suggested that miners will soon begin to leave Kazakhstan due to the unstable situation.
A less noticeable reason for Bitcoin’s collapse was the release of the Federal Open Market Committee meeting minutes held on December 14-15, 2021. The minutes voiced the Fed’s willingness to raise interest rates higher and earlier than expected. This decision is explained by the strengthening economy and high inflation. The fall in the price of BTC triggered the liquidation of about 208,000 margin positions worth more than $884 million on crypto exchanges, according to Coinglass.
