What’s up with Bitcoin? It’s at its lowest point since September following a steep drop.
BITCOIN’s decline has accelerated this week, owing to events in the United States and Kazakhstan.
In November, the cryptocurrency hit a high of just under £50,000, but it has since fallen.
This week, a sharp drop since Wednesday has pushed it even lower, to just over £31k, its lowest level since September of last year.
The disruption of mining in Kazakhstan, which is the world’s second-largest Bitcoin mining country, contributing 18 percent of its computing power or hash rate, has taken a toll on Bitcoin recently.
Following protests over rising fuel prices, the country’s internet was shut down this week, resulting in a drop in the hash rate.
“The hash rate is not directly correlated to the price of Bitcoin, but it does give an indication of the network’s security, so a drop can spook investors in the short term,” Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, explained.
“According to a recent report, some mining companies are already leaving the country in search of places with more stable power supplies, such as the United States.”
Clem Chambers, CEO of trading platform ADVFN, argued that price fluctuations were unavoidable in Bitcoin, as they were in many other assets.
“The more explosive the upside, the more explosive the downside, that’s how markets work.”
Bitcoin’s decline “corresponds with a widespread cyclical rotation in the cryptocurrency regime,” according to Pierce Crosby, General Manager of investment website trading view.
Bitcoin experienced significant gains at the start of 2021, rising to over £46k before more than halving in July.
It has since rebuilt its gains, reaching a high in November.
Mr Chambers explained that political instability in places like Afghanistan had aided demand for Bitcoin during this period of growth, as people sought a safe and portable store of value.
“Now that we’re in a period of less geopolitical stress, Bitcoin will be under downward pressure until the next thing happens.”
Mr. Crosby also mentioned that interest has shifted elsewhere, citing “an increased focus in recent months on cryptocurrencies that are much more programmable and provide a much wider range of utility functions across web3.”
“Smart contract projects like Ethereum, Solana, and Polygon, to name a few.”
Although it is primarily of interest to those involved.
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