Bitcoin dives after Kazakhstan kills internet

Bitcoin has seen a sharp decline as protests continue in Kazakhstan, the world’s second-largest mining hub, where internet was shut down, forcing local miners to switch off their equipment.

The world’s leading cryptocurrency has dropped to $42,786, which marked a daily drop of nearly 8.5%, extending losses recorded during the previous session.

The decline occurred after network data provider NetBlocks reported “significant disruption to internet service in Kazakhstan from the evening of Tuesday 4 January 2022, progressing to a nation-scale communications blackout on Wednesday afternoon.” The normalized network connectivity in Kazakhstan reportedly fell to 2%.

Riots broke out in the west of Kazakhstan on Sunday, a day after the government’s decision to remove a cap on energy prices came into effect, doubling the cost of liquefied petroleum gas.

President Kassym-Jomart Tokayev dismissed the government, pledging that lower fuel prices would be restored. However, the announcement had little effect, with rallies spreading across the biggest cities of the former Soviet Union state. In an attempt to reduce coverage of raging riots, the authorities in Kazakhstan reportedly cut the internet.

Among the other headwinds bitcoin currently faces is the US Fed’s signal for the hike in interest rates, which could happen as soon as this March. The news, released on Wednesday, triggered immediate market turbulence, sending US equities sharply lower, and extending bitcoin’s losses.

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