Bitcoin slumps to a three-month low as cryptocurrencies extend losses
Bitcoin dropped to a three-month low late Thursday amid jitters over U.S. monetary policy tightening and an internet shutdown in Kazakhstan, the world’s second-biggest bitcoin mining hub.
The price of bitcoin fell to $41,222.41 just after 9 p.m. ET Thursday, reaching its lowest level since Sept. 29, according to data from Coin Metrics. It was last trading down 0.6% at a price of $42,391.20 Friday morning.
The world’s largest cryptocurrency began falling earlier this week after the minutes from the Federal Reserve’s December meeting hinted the U.S. central bank would dial back its pandemic-era stimulus.
The hawkish comments triggered a sell-off in global stock markets which spilled over into cryptocurrencies. Bitcoin bulls often describe it as an asset that is uncorrelated to traditional financial markets, however experts have noticed growing parallels in the price movements of bitcoin and stocks.
Another piece of news weighing on crypto prices is the Kazakhstan president’s move to shutter internet service following deadly protests against the government.
The Central Asian country accounts for 18% of the bitcoin network’s processing power, according to the Cambridge Centre for Alternative Finance. Many crypto miners fled China for neighboring Kazakhstan over Beijing’s ban on virtual currency mining.
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, analyst at U.K.-based digital asset broker GlobalBlock, said in a note Thursday.
– CNBC’s Mackenzie Sigalos contributed to this report