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Bitcoin faces its worst crisis in years

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bitcoin crisis


Bitcoin has fallen to levels not seen in more than three months, down 40% from its all-time high of $69,000 in November, as part of a broader selloff in cryptocurrencies.

The world’s leading digital currency fell as much as 3.7% to $40,938, its lowest level since late September. Ether, the second largest, suffered a huge 9% drop to its lowest level since September 30. These two tokens, along with others such as Binance Coin, Solana, Cardano and XRP, have lost more than 10% in the past week, according to data from CoinGecko.

The latest setback is attributed to a sudden drop in the global computing power of the bitcoin network following an Internet shutdown in Kazakhstan, enforced to quell the ongoing revolt. Kazakhstan has become home to a growing number of cryptocurrency mining operations after China ordered a crackdown on the practice, expelling most of its cryptocurrency miners.

Cryptocurrencies also came under pressure after reports from the latest US Federal Reserve meeting, released on Wednesday, pointed to the possibility of rate hikes sooner and faster than expected. This news inevitably sapped investors’ appetite for riskier assets.

Currently, there is a widespread sense of risk aversion across markets, as concerns about inflation and rising rates seem to be at the forefront of speculators’ minds” Matthew Dibb, chief operating officer of Singapore-based cryptocurrency platform Stack Funds, told Reuters.

“BTC liquidity has been quite thin on both sides and there is a risk of a significant pullback in the short term,” the analyst added.

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