Bitcoin, the largest cryptocurrency by market value has dropped to a three-month low price late Thursday following the U.S. monetary policy tightening and an internet disruption in Kazakhstan, the second-largest Bitcoin mining pool in the world.
Bitcoin plummeted to as low as $41,222 on Thursday, the lowest level since September 29, according to data from Coin Metrics. As of Friday morning, the digital currency was trading around $41,621.
The first and the largest crypto globally started plunging in price earlier this week. The price decrease followed the minutes from the Federal Reserver’s December meeting where Feds hinted that the central bank of the U.S. would dial back its pandemic-era stimulus.
Following the comments, a huge sell-off in global stock markets occurred which affected the cryptocurrencies market in return. This happened although crypto bulls describe Bitcoin as a digital asset that isn’t tied to traditional financial markets. However, in recent months, Bitcoin and other cryptocurrencies were imitating the stock market several times.
Meanwhile, Ethereum the second-largest cryptocurrency in the world has shed 6% and Solana plummeted 7% on Friday.
Another piece of news that negatively affected the cryptocurrency market was the Kazakhstan president’s move to shut down internet service in the country. The decision came amid deadly protests against the government.
Kazakhstan’s Bitcoin network processing power stands at 18% of the total global power, according to data from the Cambridge Centre for Alternative Finance. After China banned cryptocurrencies mining in the country, crypto miners fled to neighboring countries such as Kazakhstan. Kazakhstan’s internet shutdown took as much as 15% of the network offline, according to some estimates.
Bitcoin’s computing power “is not directly correlated to the price of Bitcoin, but it gives an indication of the network’s security, so a fall can spook investors in the short term,” Marcus Sotiriou, an analyst at U.K.-based digital asset broker GlobalBlock, said in a note Thursday.