PUBLISHED FRI, JAN 7 20226:25 PM EST
Ryan Browne@RYAN_BROWNE
KEY POINTS
- Bitcoin hit a three-month low, below the $41,000 mark on Friday, its lowest point since September 29th.
- The Federal Reserve sparked a sell-off in global stock markets. This spilled over into other cryptocurrencies. The Fed indicated that there could be a rise in interest rates.
- An internet shutdown in Kazakhstan, the world’s second-largest bitcoin mining hub, is also effecting crypto prices.
Bitcoin dropped to a three-month low late Friday. This was caused by jitters over U.S. monetary policy tightening. An internet shutdown in Kazakhstan, the world’s second-biggest bitcoin mining hub, was also a factor.
The price of bitcoin fell below $41,000 to $40,749.90 just after 10:50 a.m. ET Friday. This was the lowest level since Sept. 29.
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. Experts, however, have noticed growing parallels in the price movements of bitcoin and stocks.
Other digital currencies continued to slide Friday, with ethereum shedding 6.8% and solana falling 7.7%.
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. 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, an analyst at U.K.-based digital asset broker GlobalBlock, said in a note Thursday.
