Kazakhstan Unrest Roils Crypto Market, Shows Vulnerability as Global Currency

Kazakhstan Unrest Roils Crypto Market, Shows Vulnerability as Global Currency

Political instability in Kazakhstan was front and center last week, as major cryptocurrencies like Bitcoin and Ethereum lost a significant portion of their value.

Sources close to the situation say the sell-off was sparked by the central government's decision to shut down the internet, taking nearly 88,000 regional mines off-line and lowering the total global hashrate, the amount of energy being used to mine Bitcoin, by nearly 11% overnight.

The event reveals the vulnerability of cryptocurrencies to non-market forces, with government action and regulation emerging as two major impediments for an industry that seeks to challenge the U.S. dollar and other fiat currencies for international currency hegemony.