2022 has begun, but it hasn’t been a smooth sail since January 1. Apart from the fact that the world faces two new Coronavirus variants IHU and Omicron, Bitcoin has been in a bloodbath for the past month.
The OG of cryptos plunged to a record low of $42k at press time, and indicators are not giving any signs of hope that it will rise in the coming days. Not only has BTC plunged, but the market value to other cryptos has decreased to 39.3%, the lowest since mid-2018.
Hash Rate Also Declines
It doesn’t get any better for the king of cryptos. Aside from prices plummeting to a record daily low, BTC hash rate also reduced by 12%, dropping from 194 EH/s to 172.89 EH/s as of the time of this publication.
Bitcoin mining stocks weren’t spared following the plunge in prices. Stocks, such as 1THash and KuCoinPool declined by 82% and 22.7% respectively. Others, such as Marathon Digital and Greenidge Generations fell 9.8% and 5.6% respectively. Surprisingly, Stronghold Digital recorded some gains.
Analysts Find The Missing Link
Experts analyzed the factors that could contribute to the decline in mining stocks, and they all pointed to one – the blackout in Kazakhstan. Famed blockchain media Wu Blockchain, revealed that the protests and nationwide blackout in Kazakhstan affected the hash rate and contributed to the plummet in stocks.
Several crypto analysts agree with the point. Ever since miners exited China in June last year, Kazakhstan’s global mining rate has been increasing rapidly. Currently, the country accounts for approximately 18% of BTC hash rate globally, second on list and only behind the United States. Larry Cermark of The Block stated that BTC is heading for the dust due to the protests in the country.
Reasons For The Blackout
The nationwide internet blackout occurred as a result of the sharp increase in fuel prices. Citizens of the Central Asian country took to the streets to protest the harsh increase. This resulted in the resignation of the government eventually.
Signs of mobile internet interruptions occurred on Wednesday. Some cellular networks, such as Kazakhtelecom shut down the internet across the country, while others shut down in some cities. Due to the protests and internet blackout, network connectivity dropped to 2%.
With media news such as this, BTC is bound to have headwinds. However, HODLers and market analysts are optimistic that Bitcoin will get bullish once again in the long-term despite its volatility currently.
Kazakhstan is one of the countries reportedly exploring its CBDC project. Last year, the country released a report on its pilot, summarizing the benefits of CBDC and the potential dangers of adopting a digitized currency.
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