The depressive week: Cryptos present falls by mining countries
Russia, Kazakhstan and the US are the causes that have caused the queen currency to be at $36,000 at the close of this week
The beginning of the year in the crypto theme had looked gray enough until a few days ago. Even more so, when we show it compared to the all-time high reached by bitcoin, just over two months ago.
We had a period of decline and then a few days of rare "stability", but the dominoes have succumbed to give us an unestimated end of the week for these dates.
There are several reasons for this decline in market capitalization, since it seems that everything has lined up to hit the highly volatile market that presents both bitcoin and the cryptocurrencies that follow it. Continue reading to find out more!
Falling prices this week
Bitcoin
Bitcoin (BTC), by the middle of the day on Friday, found itself with a dismal figure of $36,525. This value within the virtual asset market was seen at around 7:00 p.m. in a much worse number of $35,894.03.
At 00:00 hours it closed the week with a cost of $36,339.73 and at the time of writing this article its price is $35,800.
It can be said that bitcoin is currently rising after having numbers to mourn during the early hours of today. Showing a percentage of fall in the last seven days of 16.23%.
Other cryptocurrencies
The effects of BTC will always generate replicas in the other cryptocurrencies. This cryptocurrency will be the epicenter for much longer of the disaster and order of this type of market.
Ether, the second reigning cryptocurrency, posted a much worse drop than the previous token embodied. Its graph shows a vertical red line, with a stumble percentage of 27.91% in the last seven days.
In other dramatic cases we witnessed XRP down 24,763%; Dogecoin 29.163%; Polkadot 34.51%; Avalanche 35.71% and Solana fell 36.46%.
Crypto Depression Reasons January 2022
There has been problem after problem for the volatile market. Even situations that had not caused a big change at the time have pushed for the latent fall of all cryptocurrencies these days.
Triggering factors include mining and miners, sinking the community that started and grew thanks to the proof-of-work (PoW) format for conducting transactions within each platform.
The countries leading the Hashrate, which are the US, Kazakhstan and Russia, have shown very cruel attitudes, given the lack of control that crypto assets cause to their nations.
The problems that stand out are: the high costs of non-renewable energy as a result of large processors for mining, scams and cryptographic dangers, the possibility of money laundering and payments to terrorists.
Among these reasons, the last point stands out: The inability to visualize and control the market by government financial entities.
We show you each one of these cases broken down below:
China: Even after banning cryptocurrencies
The disappearance of mining in its entirety in the Asian country, due to the law applied in September 2021, caused something much bigger than the fall of cryptocurrencies on those dates.
The giant territory was in charge of 70% of the mining in the entire globe, and even so the market did not fall as much as it could have diminished for a very important reason: "The movement of miners".
Kazakhstan borders China, and it had attractive characteristics for this specific type of activity, which were also those of the Chinese territory when mining was still being built.
It was a low cost for electrical energy, compared to other nations, and it had the necessary power to have a computer processor on 24/7 working to get the hash.
All of this made it the setting for those who saw China as the home of cryptocurrency mining.
Kazakhstan: The new mining home destroyed in a few months
Kazakhstan held a much lower range than that covered by China, but was projected to rise in the market with that all-time high for the queen currency in November.
In the list of mining countries it is in the number two position, with a number of 18% of the virtual extractive industry.
However, the move of the miners generated a great blow for the energy of this country. This did not in the least sympathize with the heavy-handed government of President Kasim-Yomart Tokayev.
Measures taken by the Kazakh government
Tokayev saw raising the prices of liquefied gas, electricity and the Internet as a solution to this activity.
With all these government measures, the electricity crisis was immediate and affected every part of the Kazakh lands, which resulted in citizen protests.
Since last week the internet and electricity is present, but it is not reliable, since it does not seem to be able to cover mining 100%.
Russia: FSB and Central Bank dictate report to impose in March
Russia occupies the third position of the territories with the largest mining on the planet, with 11% of the prospecting of cryptocurrencies.
This Thursday, January 20, the central bank of Russia was forced, due to pressure from the Federal Security Service (FSB), to publish a report to ban cryptocurrencies throughout Russian territory.
The title of the public document is "Cryptocurrencies: trends, risks and measures". Generates an exhaustive analysis of why the cryptocurrency market is a threat to all national financial activity.
Implying that the Russian ruble, because it is not a reserve currency, cannot remain fragile, in the face of other currencies that are not controlled by national entities.
Characters in this story say:
The FSB, for its part, uses the argument of the use of cryptocurrencies to move large amounts of assets, which could be sent to entities harmful to the security of Russia.
This is worrying about this security component, because cryptocurrency is the place where transactions are invisible to the police eye.
Elvira Nabiúllina, governor of the central bank of Russia, clarifies that although the issuance, mining, exchange and circulation of cryptocurrencies will be considered illegal, citizens have the right to own digital assets.
The document where they explain their desire is a message for answers to members belonging to the government opposition. They will have time until March 1 when the most appropriate measures will be taken.
USA: Wall Street and the idea of taking cryptocurrencies out of the national budget
One of the last explosive components that generated the break in the support of the price of virtual currencies was the closing of the week of the New York Stock Exchange, which indicated a drop of 5%.
This percentage for all your transactions, although it seems small, is a big difference that generates dramatic effects. Even more so as the US is the country with the largest mining in the world, with 35% of the power of mining activity.
This is not the whole situation that exists in the United States regarding cryptocurrencies, there is also the threat of the country's reserve of not projecting more assets to the volatile market.
In addition to the announcement by the congressmen of this country to speak in the coming days about the financial weight that PoW mining is, and the environmental damage generated by this activity that is so popular in its territory.
Apparently mining is being repudiated more than ever and difficult times will still come for cryptocurrencies. The price of bitcoin could possibly drop to $30,000, dragging other currencies with it.
Although not everything is bad. A rise is expected after another drop in the market.