It’s no secret that while Kazakhstan has seen a lot of ‘crypto activity’, it is negatively affecting the country’s energy situation. Moreover, with all this trouble regarding the energy crisis in Kazakhstan, Bitcoin has taken a bit of a toll.
As of writing, Bitcoin is trading at $42,838 with a 24-hour percentage change of -8%. Besides Bitcoin, Ethereum is trading at $3,366 with a 24-hour percentage change of -4.89%. Many believe that the energy crisis in Kazakhstan triggered this response of shortfall.
On the other hand, Kazakhstan faces heat in terms of energy and political crisis. Issues such as rising LPG prices have caused assaults on government buildings, clashes with the army, arrests, and casualties. In fact, the country has declared a state of emergency.
To control the dreading situation, the Kazakhstan government has disabled the internet. This effectively closed down social networks that the government hopes will put a stopgap on rioters. Also, the closure of internet services blocked all sorts of mining activities in the country.
Kazakhstan became the go-to place for crypto miners who fled from China due to the latter banning crypto mining. Kazakhstan suited crypto miners as the country had an abundant source of cheap electricity through fossil fuels and a relatively relaxed administration.
However, with many mining companies shifting their operations to Kazakhstan, the energy demand increased tremendously. This is largely due to the massive energy requirement crypto mining machines have to complete the algorithms.
According to reports, nearly 90,000 crypto mining companies chose Kazakhstan as their go-to place for crypto mining. Now, if Kazakhstan shuts down the internet services causing mining activities to stop, the global Bitcoin hash rate drops.