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Bitcoin fell to a three-month low on Friday night amid nervousness over the tightening of US monetary policy and the shutdown of the internet in Kazakhstan, the world’s second-largest bitcoin mining hub.
The price of bitcoin fell below the $ 41,000 mark to $ 40,749.90 just after 10:50 a.m. ET on Friday, reaching its lowest level since Sept. 29, according to data from Coin Metrics. The last time it traded down 2.5% at a price of $ 41,690.88.
The world’s largest cryptocurrency began falling earlier this week after the minutes of the Federal Reserve’s December meeting hinted that the US central bank would cut back on its pandemic-era stimulus.
The aggressive comments triggered a sell-off in global stock markets that spread to cryptocurrencies. Bitcoin bulls often describe it as an asset that is uncorrelated with traditional financial markets, yet experts have noted growing parallels in Bitcoin and stock price movements.
Other digital currencies continued to decline on Friday, with ethereum losing 6.1% and solana falling 6.6%.
Another piece of news weighing on the prices of cryptocurrencies is the decision of the President of Kazakhstan to shut down internet service following deadly protests against the government.
The Central Asian country accounts for 18% of the bitcoin network’s processing power, according to the Cambridge Center for Alternative Finance. Many cryptocurrency miners fled China to neighboring Kazakhstan over Beijing’s ban on virtual currency mining.
Kazakhstan’s internet shutdown took up to 15% of the network offline, according to some estimates.
The computing power of Bitcoin “is not directly correlated to the price of Bitcoin, but it does give an indication of the security of the network, so a drop may scare investors in the short term,” said Marcus Sotiriou, analyst at the broker at UK based digital assets GlobalBlock. in a note on Thursday.
– CNBC’s Mackenzie Sigalos contributed to this report.