Recent remarks made by the US Federal Reserve are being blamed for the downward price slump of Bitcoin and other cryptocurrencies.
Bitcoin dropped in value from $47,000 (€ 41,500) earlier this week to a low of just over $40,000 (€ 35,000) per digital coin following remarks from the US Federal Reserve that it may increase interest rates in the coming months.
Recent political events in Kazakhstan have also raised concerns about the capacity of the Bitcoin network as hashrates fell following the shutdown of the internet in the country. Following the crackdown on Bitcoin mining in China in Q3 / Q4 of 2021, many miners moved their operations to Kazakhstan which is now responsible for mining 18% of the world’s Bitcoin, almost one fifth of the network’s global capacity.
The US Federal Reserve minutes suggest that interest rates may increase sooner than expected encouraging some to sell of their riskier assets.
The dip in the price of Bitcoin means that the asset has hit its lowest price since September 2021, down from a November 2021 peak of almost $70,000 (€ 62,000).
Other cryptocurrencies have also seen dramatic price falls. Ethereum (ETH) saw a significant drop in value of more than 4% in 24 hours and is now priced at under $ 3,500 (€ 2,850).