Yesterday we told you that the leading cryptocurrency Bitcoin (BTC) had the worst start of the new year in its history. Bitcoin, which fell to $ 38 thousand on Friday, fell to $ 35 thousand last night and saw its lowest level since the summer.
The loss of more than 20% of the leading cryptocurrency also hit other cryptocurrencies. This situation, as can be expected, caused many investors to lose thousands of dollars and the market was turned upside down. So, why is this decline in Bitcoin, which has reached the highest level in history by exceeding $ 68 thousand in the past months? Let’s have a look.
Pandemic and country decisions were effective
In the first days of 2022, the US Federal Reserve’s (FED) cut off its emergency support and its readiness to move away from the monetary policies towards the pandemic affected the market. In addition, it is possible to say that the Omicron variant, which started to wreak havoc on the world with the new year, had a significant impact on the markets.
It is stated that the Fed’s preparations to raise interest rates may also affect the markets. According to Sözcü, some investors think that cryptocurrencies are a hedge against inflation; however, high volatility and risks keep people away from the market on such news days.
Events in ‘mining paradise’ Kazakhstan hurt market
Of course, it is possible to say that the events in Kazakhstan, which is described as the new center of mining after China’s ban on cryptocurrencies, may have also affected the market. The protests that started in the country after the government’s hike decisions caused the disruption of mining activities in the country and affected the crypto money market.
In addition, the nationwide internet outages seriously affected mining operations. These events and disruptions caused mining devices to fail and millions of dollars in damage, and caused the leading cryptocurrency Bitcoin to take big hits.
Russia wants to ban cryptocurrencies
In addition, there were statements from Russia that could affect crypto currency exchanges. The Central Bank of Russia, in its statements recently, stated that it wants crypto currency trading, mining and exchanges to be banned in the country. In the report published on the subject, it was stated that the transactions carried out by Russian citizens with cryptocurrencies amounted to up to 5 billion dollars annually.
Russian officials emphasized that cryptocurrencies limit the country’s monetary policy sovereignty, while emphasizing the risks and illegal activities caused by these currencies. In addition, it was underlined in the report published by the central bank that cryptocurrency mining activities could harm the country’s energy consumption and environmental plans.
New decisions can be made for cryptocurrencies in the UK and USA
Finally, statements about cryptocurrencies came from the United Kingdom and the USA. The UK government said in a statement earlier this week that it plans to restrict “misleading cryptocurrency ads”. In the statements made by the authorities, “Crypto-assets may provide an opportunity for people to invest; however, assets presented with misleading claims may cause harm to these people. We aim to ensure consumer protection while supporting crypto innovation.”
The United States government has also recently made statements regarding digital assets. The government, led by President Joe Biden, will release a strategy for digital assets within the next month; He also stated that while this strategy is being formed, possible risks and opportunities will be evaluated.
In short, it is possible to say that this sharp decline in Bitcoin (BTC), which is currently traded at 36 thousand dollars, and which has caused a loss of over 1 trillion dollars since November, is likely to have arisen due to statements from countries and other events.
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