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The crisis in Kazakhstan affects bitcoin miners and the price of BTC

The country boasts the second largest mining hash rate in the world.

Kazakhstan is in the midst of escalating antigovernmental protests after the president ousted much of his team. Amid the incidents, Kazakhstan’s largest telecommunications company, Kazakh telecom, shut down internet supply and the country’s normalized network connectivity fell to 2%. Being one of the countries with the largest number of bitcoin (BTC) miners -mainly after China’s ban-, the situation affected the crypto ecosystem considerably.

Kazakhstan boasts the second-largest BTC mining hash rate in the world. According to data from October 2021, the Asian country represented 18%, surpassed only by the United States. In that sense, internet outages in the country and business interruptions could affect the global hash rate of BTC.

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The price of BTC was affected by the situation, and yesterday afternoon it plunged by 7%, going from almost $ 47,000 to $ 43,000 in a few hours.

The protests in Kazakhstan began after a rise of almost 100% in the price of LPG gasoline, which was much cheaper than normal and therefore used by a large number of inhabitants. As of January 1, the government decided to increase its cost and began an escalation of violence. Yesterday, hundreds of protesters set fire to the presidential residence in Almaty and, as confirmed by the Interior Ministry, eight police officers and members of the National Guard were killed amid the unrest, and nearly 100 officers were injured.

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In response to the protests, President Kassym-Jomart Tokayev declared a two-week state of emergency across the country and imposed a night curfew in Almaty, where mobility in urban areas is also restricted.

The demonstrations were led mainly by young people, who are seeking solutions to the problems that plague their nation for years. Tim Ash, the emerging markets strategist of BlueBay Asset Management, explained that ” young Kazakhs, internet savvy, probably want freedoms similar to those of the Ukrainians, Georgians, Moldavians, Kyrgyz, and Armenians, who have also vented their frustrations over of the years with authoritarian regimes ”.

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