- Political unrest in Kazakhstan has lowered the Bitcoin hash rate by 13% and brought BTC down to $ 43,000.
- The riots were caused by the doubling of fuel prices, which led to the resignation of the government and the shutdown of the Internet.
Extensive civil unrest in Kazakhstan has dropped the Bitcoin hash rate by 13.4%. The violent protests are said to have come under pressure when the government removed price caps for liquefied petroleum gas (LPG) on 1 January. The authorities argued that reduced prices at that time were unsustainable for the country’s energy sector.
Prices doubled overnight, with respective citizens taking to the streets of Almaty and other western regions in protest. Many Kazakhs had modified their cars to operate on fuel rather than oil due to their earlier favorable prices. Now, some government buildings have been burnt down, and protests are likely to continue for some time.
Civil unrest in Kazakhstan affects the rate and price of Bitcoin
The story has attracted the attention of the rest of the crypto community, due to its effect on Bitcoin mining. Keep in mind that Kazakhstan is the second largest cryptocurrency miner in the world, according to visualcapitalist.com. With 18.1 percent of the global hashrate, the nation ranks second only to the United States, dominating 35.4 percent.
This has been the case since Chinese giant miners were evicted, forcing them to seek out more friendly jurisdictions, such as neighboring Kazakhstan. Many domestic and foreign miners took advantage of cheap electricity prices of $ 0.055 / kWh, according to Global Petrol Prices. This is less than half of what the US offers ($ 0.12 / kWh).
After a major upheaval, the country’s central cabinet withdrew, and state-owned Kazakhtelecom closed the country’s Internet. Network activity fell 2%, while Bitcoin hashrate fell from 205,000 petahash per second (PH / s) to 177,330 PH / s, according to data from YCharts.com.
At the time of the press, the Internet was still inaccessible in Kazakhstan, with no word on when it will work again. In addition, BTC has plunged 7.3% over the past 24 hours to trade at $ 43,083, a price that last appeared in September 2021. In addition, the global cryptocurrency market capitalization has seen a 7% drop, 9 percent on the day at $ 2.17 trillion.
And now that?
If internet access is not yet available, the consequences may be more acute. Kazakhstan Data Center and Blockchain Industry Association expect to generate $ 1.5 billion each from legal and illicit cryptocurrency mining in the next five years. It has been one of the worst riots in the country for more than a decade. However, a Russian security alliance of a post-Soviet state plans to send peacekeeping forces to Kazakhstan.
The last time Bitcoin mining was interrupted in Kazakhstan, it was September 2021 and it was due to blackouts. And while the country has managed to maintain its leadership position as a miner, its energy sources have been scrutinized for their impact on the environment. 87% of Kazakhstan’s energy sources are carbon related.