Kazakhstan Chaos, Internet Shuts Down, Bitcoin Mining Company Hits, BTC Price Crashes

Bitcoin mining company in Kazakhstan hit hard (BitcoinInsider)

JAKARTA – In the midst of the riots that hit Kazakhstan, the local government cut off internet connections to quell protests related to rising fuel prices. The decision had far-reaching repercussions for Bitcoin mining companies.

The reason is, Kazakhstan has become a new paradise for BTC mining after China expelled the miners from the country. Due to the Chinese government's crackdown, some Bitcoin mining companies have moved to Kazakhstan. This makes Kazakhstan one of the largest Bitcoin mining countries.

With the riots taking place, and internet services being shut down, the BTC miners were also affected. As a result, about 15 percent of the world's Bitcoin network fell. The price of Bitcoin also falls and affects the crypto market.

According to a data report from the Cambridge Center for Alternative Finance, 18.1 percent of global Bitcoin mining companies are located in Kazakhstan. Since the Chinese government expelled Bitcoin miners, the number of miners in Kazakhstan has increased dramatically. The country in Central Asia has suddenly become a “new paradise” for BTC miners.

According to a CNBC report, the government reactivated its internet services on Thursday. Even so, the price of Bitcoin has not risen from its slump. Data from Coingecko reports that BTC prices fell 9.8 percent in the past week. At the time of writing, Bitcoin is trading at 42,319 US dollars (approximately Rp.606,389.519) per coin.

Bitcoin.com News mentions that the events of unrest that took place in Kazakhstan affected the crypto market and Bitcoin price plunged below US$44,000 on Wednesday, January 5, 2022. In addition to the price drop, this week, the average Bitcoin network hashrate also fell below 170. exahashes per second (EH/s). Whereas on January 1, it almost broke 229 EH/s.

The crypto community expressed concern that the unrest in Kazakhstan could lead to a further setback, with miners potentially moving to new environments with more stable energy sources.

Previously, the government of Kazakhstan welcomed the entry of BTC mining companies and would take appropriate steps to regulate the sector. On the other hand, the authorities blame the lack of electricity supply in Kazakhstan for the entry of Bitcoin mining companies. In the first quarter of 2021, the energy deficit exceeded 7 percent. The unstable energy supply there forced a number of crypto mining companies to move to new countries including the United States.