Source : zycrypto.com
- Kazakhstan officially shuts down energy for Bitcoin miners till February.
- The oil-rich nation is struggling to keep up with energy demands as BTC hash rate drops.
- Kazakhstan may stall bitcoins’ slow recovery with its shut down on mining activities.
Following a week-long strain on its national energy supply, Kazakhstan will pull the plug on all crypto mining activities until the end of the month. A spokesperson for the state grid-energy management agency, KEGOC disclosed this to the press, adding that the decision is on the hill of its growing struggles to meet power demands amidst sub-zero degree weather.
Close to 190 local energy firms have received this memo, according to Reuters, which contains the federal government’s order that all “planned electricity supply to persons engaged in digital mining is completely canceled.”
Reports had earlier flocked the news this week, prior to the official notice, that the oil-rich nation suffered severe power outage from its Central Asian power system, spilling into neighboring nations Kyrgyzstan and Uzbekistan. This clampdown on mining activity has resulted in a drop-down of its hash rate — from 18% to 8% — and its correlated ranking of the global Bitcoin mining charts.
The coming weeks will see a 100-megawatt restriction placed on new miners, spelling an increased disincentive as existing miners scout for other alternatives outside the shores of China’s neighboring country.
Trouble began brewing for the government after it flung open its borders to more than a required number of miners following China’s outright crypto ban. With access to warehouse facilities, low-cost energy, and proximity to China, it was not long before the Asian nation — once touted to edge out the US global bitcoin mining hash rate — began crumbling to power setbacks due to overload.
Since then, a major citizen protest on rising energy costs has marred the confidence of miners within the region. With neighboring Russia out of the picture, it remains unclear which country would be the next best alternative if things become increasingly unfavorable for the association of miners already counting their losses in millions of dollars.
The effects of this announcement on Bitcoin remain yet to be seen. Now hovering around the $36,000 support level, it appears, this may deal a minor blow to BTCs’ sluggish efforts at escape from the entrapment of a bear market.