Bitcoin plummets to lowest level in months
The Bitcoin cryptocurrency saw its value drop by 5% this Friday (7). The asset reached its lowest level since the end of September last year. Now it's worth $41,000 per digital currency , amid a massive sell-off in cryptocurrencies.
Last time, Bitcoin dropped 3.7% to $40,938 on September 29, 2021. The record for the world's largest cryptocurrency was $69,000 in November. Since then, it has lost more than 40%, in a volatility that has plagued it since the beginning, for more than a decade.
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Because of its decentralized nature, there is no single cause for the drop in Bitcoin value. One of the reasons was the pressure after the last meeting of the Federal Reserve, the central banking system of the United States, held in December and released on Wednesday (5).
The Fed has been sapping investors' appetite for riskier assets through more aggressive policy action. The minutes of the meeting suggest an earlier-than-expected increase in interest rates, in addition to the sale of the agency's assets. This has led traditional investors to look for something less risky.
Another reason is the political crisis in Kazakhstan , the second largest cryptocurrency miner in the world, just behind the US, which concentrates around 20% of all Bitcoin mining. The Central Asian country is facing protests against rising energy and fuel prices, caused by the growth in the exploitation of assets. On Wednesday (5), the government shut down the Kazakh internet.
“Kazakhstan was already mining relatively a lot of cryptocurrencies, but when China banned it, there was a strong migration of miners, boosting activity a lot. They looked for the fact that the country has a very cheap coal and gas energy structure, but coal draws more attention and becomes a good business. Without China, Kazakhstan is an attractive option”, explained professor Carolina Moehlecke, from FGV's School of International Relations, in an interview with Olhar Digital on Thursday (6).
In addition to Bitcoin, other cryptocurrencies also suffered crashes. The Ether , the second-largest token by market capitalization, has dropped more than 4% in 24 hours, from $3,800 to $3,200, the lowest since Oct. 1 of last year.
Via: BBC / Reuters
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The Bitcoin post plummets to its lowest level in months first appeared in Gaze Digital .