What is the cause of the fall in the price of Bitcoin?

There is no doubt that 2021 was the year of cryptocurrencies, being led mainly by the increase in the price of Bitcoin. Likewise, the emergence of other technologies based on blockchains or blockchain that follow the same volatility of the currency market was seen.

Indeed, we had the arrival of NFTs as well as games that used this medium to generate income, known as NFT games. All using a token or cryptocurrency that had a value within the market.

But then why has Bitcoin dropped in price?

Beyond the growth of cryptocurrencies and their usefulness, today different situations have caused Bitcoin to remain in a downtrend. And, being the main crypto in the world and the highest value, it has had a great stir.

In addition, it should be noted that the entire cryptocurrency environment is considered a volatile market, since at any time it could rise or increase in value.

However, over the years and since its inception, Bitcoin has been the crypto with a regular and stable growth.

Unrest in Kazakhstan, the main reason

In the first instance, anyone would wonder what is the relationship that this country has with Bitcoin. However, they have a lot in common.

And it is that, recently in Kazakhstan it has become the scene of war between the enemies that the government has, against the armed forces.

The main reason: the increase in the prices of liquefied gas, which in the Central Asian country is the most used energy source.

The problem comes when we realize that Kazakhstan is the second most Bitcoin mining country in the world, behind the United States. It even gained much more relevance due to China's hunt for the world's leading cryptocurrency.

It should be noted that, for BTC mining, powerful computers are required, which in turn demand a greater amount of energy.

After the multiple protests and clashes against the government of Kazakhstan, the first measure was the complete shutdown of the Internet. This action was mainly affected by the price of Bitcoin, where It's hashrate decreased up to 13% due to the fact that it stopped mining.

For now, according to CNBC, Internet service has already begun to be restored in the Central Asian country. However, through NetBlocks Internet Observatory it was revealed that the connectivity is still not in its normal ranges.

Federal Reserve interest rates

Another reason for the downward trend of BTC is due to possible increases in interest rates from the Federal Reserve.

In turn, this increase is directly related to the increase in inflation in the United States under Joe Biden.

New variant of Covid-19: Ómicron

There is also a general fear among the great world and economic powers due to the scourge of the new Omicron variant that promotes speculation.

In this sense, there is the possibility of entering a new stage of restrictions and confinement in order to avoid further infections.

As could be seen in 2020, these measures had a harsh impact on the world economy, where only large companies are beginning to recover.

The fear

For anyone who has all their investments in a cryptocurrency, it is normal that in the face of a downtrend they tend to withdraw their savings. However, fear and speculation greatly influence the price of any crypto, especially Bitcoin.

Faced with the growing fear for the price of Bitcoin, many people have chosen to sell the units they have in order not to lose more money.

As a consequence, in the face of greater supply and less demand, it is logical that the price tends to fall as it "loses value". That is why holders urge people to remain calm and regain faith in one of the most stable cryptocurrencies in the world.

However, it is still a volatile market

It should be noted that it is impossible to predict what would be the movements that any cryptocurrency or currency would have in any market. Therefore, each of the reasons presented above is just a long list of factors that can affect the volatility of Bitcoin.

Even so, it is important to remember the great stability that the price of Bitcoin has maintained despite the recent problems mentioned.

That is why analysts and the investment market stand in good faith, speculating that 2022 will be much better for the leading cryptocurrency.