Bitcoin slumped to its lowest level in three months after tensions over the tightening of US monetary policy late on Friday and the shutdown of the internet in Kazakhstan, the world’s second largest Bitcoin mining centre.
According to data from Coin Metrics, the value of Bitcoin dropped to $40,749.90 on Friday, dropping below the $41,000 level and hitting its lowest level since September 29. Prior to these events, Bitcoin was last trading at $41,947.75, down 2.9 percent.
Bitcoin drop may scare investors in the short term
Bitcoin, the world’s largest cryptocurrency, tumbled earlier this week after the Federal Reserve hinted at its December meeting that it would turn down pandemic-era stimulus from the US central bank; This comment triggered a splashy sale of cryptocurrencies on global exchanges. In addition to Bitcoin, Ethereum (6.8 percent) and Solana (7.7 percent) continued to drop on Friday.
Another development affecting crypto prices was the President of Kazakhstan’s decision to shut down the internet service after anti-government protests. According to the Cambridge Center for Alternative Finance, Kazakhstan accounts for 18 percent of the processing power of the global Bitcoin network; however, after the government disabled the internet, 15 percent of the country’s Bitcoin network has been disabled.
In a statement on Thursday, UK-based digital asset broker GlobalBlock analyst Marcus Sotiriou said that Bitcoin’s computing power “is not directly related to the Bitcoin price, but is an indicator of the security of the network,” so a drop could scare investors in the short term.
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