Bitcoin is still trembling after a stumbling start to 2022 — a new year’s flop that was unexpected even by cryptocurrency’s ever-unpredictable norms. It is impossible to ascribe any movements in Bitcoin’s price to a single factor because of its fundamentally decentralized structure.
However, it appears that the drop in the first week of January tied to several major political upheavals taking place throughout the world. Kazakhstan was the first country to experience violent turmoil. Thousands of inhabitants of the Central Asian country flocked to the streets to protest the dramatic spike in petrol prices that occurred after the government lifted a price cap on January 1, 2022, fueled by anger about economic disparity and mounting unhappiness with the government.
In an attempt to quell the protests, the Kazak authorities imposed a near-total Internet blackout, effectively shutting down the country’s burgeoning bitcoin mining business. The Bitcoin mining sector in Kazakhstan has exploded in the last year. Kazakhstan emerged to become the second-largest Bitcoin mining nation behind the United States after China outlawed the practice in 2021, accounting for over 22% of global mining as of August 2021. When Kazakhstan’s internet interrupted, its mining capacity plummeted, and Bitcoin’s computing power plummeted. As a result, uncertainty was seeded, and the markets began to sag.
Crypto mining is the computer activity that used to generate new coins and keep track of all current transactions. To complete this duty, powerful computers must solve extremely complicated algorithmic challenges, which necessitate a massive amount of energy – as well as an Internet connection. Another piece of news shook the cryptocurrency markets in Europe.
Kosovo, another important mining hotspot, has decided to prohibit cryptocurrency mining in order to reduce electricity use. The country is currently experiencing an energy crisis, which has forced the government to buy electricity at exorbitant prices and impose rolling blackouts. The government also targeted the energy-intensive mining industry in an attempt to alleviate the crisis.
Interior Minister Xhelal Svecla declared on Facebook “the Kosovo Police has organized an action to identify and confiscate equipment for minimum cryptocurrency.” “A total of 272 pieces of this type of equipment were seized, and one person was apprehended.” “Everything went off without a hitch and concluded without a snafu.” Of course, neither the political nor the cryptocurrency worlds can predict how the rest of the year will unfold. We will not wager since a single Elon Musk tweet can cause the price of a meme coin to spike overnight.
