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Most cryptocurrencies continue their fall this Friday, with bitcoin in the lead. The benchmark digital currency even fell below the $ 41,000 mark during the day, losing almost 40% of its value since November.
In order to lower inflation in the United States, the US Federal Reserve hinted Wednesday that it could raise its key rates earlier than expected. A policy that strengthens the dollar and raises bond rates. This context is pushing investors to sell risky assets like cryptocurrencies to buy safer assets like US Treasuries.
While the Fed’s announcements triggered the decline in cryptocurrency prices, riots in Kazakhstan against power are rather an “amplifying” factor.
Kazakhstan, second country for bitcoin mining
The shutdown of the internet decided by the Kazakhstani regime caused a drop in global bitcoin mining capacities, which led to a drop in the prices of other cryptocurrencies. According to the Cambridge Center for Alternative Finance (CCAF), this Central Asian country has indeed become the world’s second largest minage de Bitcoin after the United States: it concentrates 15% of global mining capacity.
A place that Kazakhstan won after the brutal ban on crypto mining in China. The Middle Empire carried out 65% mining in the world. Several mining companies have therefore left China to take refuge in Kazakhstan, a neighboring country where electricity is inexpensive and the cold climate favors the cooling of computers. This is a huge advantage for these companies, as the mining activity of creating new units of digital currencies and securing their transactions is very energy intensive.
But political instability in Kazakhstan could push these minors to seek asylum elsewhere, such as in the United States, which has become the new El Dorado after the ban of this industry in China. The reason: the country of North America offers electricity at attractive prices.
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