Why did Bitcoin Crash to $43879 Today?
Kazakhstan has seen a surge in cryptocurrency mining since a mass exodus from China last year, becoming the world’s second-largest source of Bitcoin hash rate after the United States and ahead of neighbouring Russia. According to the Cambridge Centre for Alternative Finance, it now accounts for 18% of the global hash rate, a measure of computing power used to mine bitcoin.
While miners flocked to Kazakhstan partly because of its cheap electricity, the country’s resources were quickly depleted. Kazakhstan is already dealing with a new energy crisis due to petroleum shortages, which have caused gas prices to skyrocket. Despite police repression, large-scale protests are taking place across the country. President Tokayev’s administration declared a state of emergency and shut down much of the country’s internet connectivity as a result.
Protests began in one of the country’s provinces on Sunday and have since spread across the country, resulting in the government’s resignation, according to Insider’s Bill Bostock. According to Reuters, Kazakhstan’s president, Kassym-Jomart Tokayev, accepted the government’s resignation on Wednesday.
Protesters threw projectiles at armoured vehicles, forcing them to turn around in videos. The protests began after the government removed a price cap on liquefied petroleum gas, causing prices to skyrocket. According to Reuters, on Wednesday, the president reversed the price hike.
Amid massive protests over fuel prices, Kazakhstan’s entire internet was blacked out. As a result, Kazakhstan is “in a nationwide internet blackout,” according to Netblocks, a website that monitors the internet worldwide. In addition, the Associated Press reported that many of the country’s news websites were unavailable on Wednesday.
Kazakhstan’s Ministry of Energy intends to limit the nation’s crypto mining industry’s electricity consumption to a total of 100 megawatts (MW) to alleviate power shortages. According to a draught signed by the newly appointed energy minister, Magzum Maratuly Myrzagaliev, on October 1, all newly authorized plants will be limited to using only 1 MW for two years. However, the ministerial order does not specify when the restriction will end.
On Wednesday, Bitcoin’s price fell to a one-month low amid a broader decline across stock markets. As US stock markets closed on Wednesday, the macro picture was unclear. According to Bloomberg, the Federal Reserve indicated that it may raise interest rates sooner than previously expected in newly-released minutes. At the same time, the Fed hinted at the possibility of a balance-sheet reduction resulting from such actions.
According to data from TradingView, bitcoin’s price hit a low of $43,879 on Coinbase.
Today’s price drop is the lowest since December 4, when the price of bitcoin on Coinbase fell to $42,333, as shown in the graph above. On November 9, Bitcoin reached its all-time high, reaching $69,000 on Coinbase.
The worldwide crypto market capitalization has dropped by 6.92% to USD2.07 trillion Over the previous 24 hours. While total trading volume has increased by 12.25 % to USD116.37 billion. Stablecoins accounted for 79.47% of the trading volume at USD92.48 billion, while DeFi accounted for 18.35% at USD21.35 billion. As a result, Bitcoin’s market share increased from 0.30% to 39.66% this morning.
In major cryptocurrencies, Bitcoin fell 4.97% to Rs 35,02,996, while Ethereum fell 6.55% to Rs 2,82,500. Avalanche fell 7.58% to Rs 7,731 and Cardano fell 6.36% to Rs 99.02. Over the last 24 hours, Polkadot has dropped 9.4% to Rs 2,111.1, while Litecoin has dropped 7.83% to Rs 10,858.01. Tether gained 1.12% to Rs 80.43 per unit. Dogecoin SHIB fell 6.74% to Rs 12.62, while Memecoin SHIB fell 7.59%. The price of Terra (LUNA) fell by 8.94% to Rs6,142.2.
Bitcoin’s market share has been steadily declining, and it is now at its lowest point in years. The last time it witnessed a significant drop in market share was in 2018, when it fell to 33%.