1/7 FAL Weekly Digest
Welcome to the FAL Weekly Digest, a source for this week’s biggest news articles and crypto market updates.
Here is what you need to know:
Protests in Kazakhstan threaten the stability of Bitcoin mining facilities in the region.
Instability in Kazakhstan Threatens BTC Mining
Kazakhstan is currently in a state of emergency as thousands of citizens protest extreme energy and fuel cost increases in the country. Widespread rioting throughout the nation has resulted in a number of infrastructure facilities being damaged according to Kazakhstan President Kassym-Jomart Tokayev. There have also been reports of nationwide internet and electrical outages according to global independent watchdog Netblocks.
The central Asian country has recently come into the spotlight in 2021 as a viable location for Bitcoin mining due to low energy costs following the nationwide ban on crypto mining in China in May. According to the Cambridge Bitcoin Electricity Consumption Index, Kazakhstan accounts for about 18% of the global Bitcoin hash rate and is second only to the United States which accounts for about 35%. As a result of the internet and electrical outages on Wednesday, the Bitcoin network’s overall hash rate fell about 13% hours after the blackout from about 205,000 petahash per second (PH/s) to 177,330 PH/s.
While some mining companies operating in Kazakhstan expect services to return to normal soon, any prolonged outages could be costly to the Kazakh government. Cryptocurrency mining activities generate atleast $230 million per year in the country, and any extended periods where mining is disrupted could impact that valuable revenue.
Fed Minutes Reveal Rate Hikes
On Wednesday, the U.S. Federal Reserve released the Federal Open Market Committee (FOMC) Meeting Minutes, providing valuable insight and details from the Fed’s December 14th and 15th meetings and policy decisions. The press release indicates that the U.S. central bank is ready to begin decreasing their $8.7 trillion dollar balance sheet faster than anticipated, stating that “expectations for a reduction in policy accommodation shifted forward notably.”
Overall acknowledgement of growing U.S. and global inflation by policymakers has prompted them to “quicken the pace of reduction of net purchases of Treasury securities and agency mortgage-backed securities (MBS) in March,” with projected timings for the first increase in federal interest rates shifted from the first quarter of 2023 to June 2022. For more information regarding the Fed Minutes and it’s potential impact on the cryptocurrency sector, please see our in-depth analysis found here.
Market Update - Bitcoin
The overall cryptocurrency market capitalization is about $1.98 trillion USD, a 9.61% decrease from last week’s valuation of $2.18 trillion. At the time of publication, Bitcoin ($BTC) is valued at $41,872 per bitcoin with a market capitalization of $793 billion making up 40% of the overall market.
Bitcoin has stumbled into the new year as sell off pressure continues to mount. Global fears of the COVID-19 pandemic, inflationary woes, the on-going Evergrande financial crisis, and an increasingly hawkish U.S. Federal Reserve policy shift has all shown to be detrimental to Bitcoin’s price action.
Bitcoin is currently sitting at about the $42,000 price level which has proven to be a crucial pivot point throughout 2021. If the bulls are able force BTC to bounce and reclaim the lower to mid 40 thousands as support, then it could be seen as a sign of sell pressure weakening. If not, then further price losses into the 30k range could be expected. For a more in-depth technical analysis, please see our post found here.
Polygon Network Sees Increased Usage During NFT Boom
The Polygon network ($MATIC) continues to see increased network activity as the number of non-fungible tokens (NFTs) sold on the layer-two protocol reached an all time high in December 2021 of just under 2 million. Recent data from Dune Analytics indicates a 60% increase in the amount of NFTs sold on Polygon compared to November 2021, which saw about 1.25 million NFTs sold.
NFT sales aren’t the only thing happening on Polygon. Over 3,000 decentralized applications have been registered on the blockchain with a total value locked figure of over $3.86 billion dollars in its protocols. For more information regarding one of the leading scaling solutions in the space, read our full article found here.
NFTs and the Future of Gaming
Gaming companies have increasingly shown interest in blockchain technology and non-fungible tokens (NFTs) in 2021. Major video game development and publishing companies such as Square Enix, Ubisoft, and Electronic Arts (EA) have expressed interest in exploring and capitalizing on the newfound possibilities afforded by artificial intelligence, virtual reality, and NFTs. While these innovations can still be considered in their infancy, many experts and leading figures are beginning to contemplate the potentiality and ramifications of implementing such technology. For more information, be sure to read our full article found here.
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