Bitcoin had a surprisingly low start to the new year, even by the always unpredictable cryptocurrency standards. Due to its inherently decentralized nature, it is not possible to attribute any change in Bitcoin price to a single cause. Of course, there are many factors involved, such as political decisions, countries’ attempts to regulate cryptocurrency exchanges. But there are 2 other reasons that are not very common and both are related to cryptocurrency mining.
It is clear that the collapse seen in the first week of January is also linked to some of the major political shocks in the world.
First Blow to Bitcoin from Kazakhstan. . .
First, it flared up in Kazakhstan with violent unrest. Combined with anger over economic inequality and growing dissatisfaction with the government, thousands of citizens of the Central Asian country took to the streets to protest the sharp rise in fuel prices seen after the government lifted the ceiling price on January 1, 2022. To control the protests, the Kazakh government almost completely cut off the internet, stopping the country’s rapidly growing cryptocurrency mining industry.
Kazakhstan’s Bitcoin mining industry has seen a huge boom over the past year. After China banned Bitcoin mining in 2021, Kazakhstan has become the second largest Bitcoin mining country after the United States, accounting for almost 22 percent of the world’s total mining as of August 2021. When Kazakhstan’s internet went down, mining capacity dropped dramatically. On the other hand, uncertainty arose and markets fell.
Crypto mining is the computing process used to create new coins and keep a log of all ongoing transactions. Performing this task requires solving extremely complex algorithmic puzzles that require powerful computers, a staggering amount of energy, and an internet connection.
A Blow to Bitcoin is also from Kosovo. . .
Another news from Europe shook the cryptocurrency markets. Kosovo, the major mining hub, has decided to ban cryptocurrency mining in hopes of restricting electricity use. The country is currently in an energy crisis, forcing the government to import electricity at high prices and impose cutbacks. To try to alleviate the problem, the government has also targeted the energy-intensive mining industry.
“The Kosovo Police conducted an action to discover and seize equipment for minimal cryptocurrencies,” Interior Minister Xhelal Svecla said on Facebook, adding: “272 pieces of such equipment were seized and one person was arrested. All actions were peaceful. somehow it happened and ended.”
What’s in Bitcoin’s Horoscope for 2022?
Of course, we can’t say for sure how the rest of the year will play out, both politically and from a cryptocurrency perspective. Considering that even a single Elon Musk tweet can trigger price spikes in cryptocurrencies that should not normally occur overnight, any predictions may not be very accurate. . .
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