Bitcoin picked up speed once again in the night to Thursday. For a short time, the price even fell to the $42,500 range, its lowest level since the weekend crash at the beginning of December. Two factors are weighing on the price.
On the one hand, the prospect of an even faster end to the Fed’s loose monetary policy is putting pressure on the prices of the top performers of recent years – and thus also on bitcoin. The minutes of the last meeting, published on the eve of the meeting, reaffirm the prospect of an early increase in the key interest rate in the United States. In addition, some of the members were in favor of starting to reduce the size of the central bank’s balance sheet shortly after the first rate hike.
Market participants now fear that the days of cheap money are numbered and are taking profits in asset classes that have particularly benefited from it in recent years. These include (tech) stocks as well as cryptocurrencies such as bitcoin.
Furthermore, the unrest in Kazakhstan due to sharply increased energy prices acts as an additional burdening factor for the Bitcoin, which, in addition to the resignation of the government, also results in a nationwide Internet outage. The problem: After the mining ban in China, numerous miners have found refuge in neighboring Kazakhstan.
Kazakh miners now contribute around 18 percent of the total computing power (hash rate) in the Bitcoin network. This makes Kazakhstan currently the second largest Bitcoin mining nation after the USA. Accordingly, the Internet outage is also having a drastic impact on the Bitcoin network: According to data from YCharts.com, the global hash rate has plummeted by around 13 percent as a result.