Kazakhstan cancels gasoline subsidies, triggering nationwide violent protests, government shuts down internet, Bitcoin drops to $43,000

Just as Kazakhstan had recently emerged as one of the world's important mining hubs, the government of Kazakhstan declared a nationwide state of emergency in the middle of the night, shutting down even the internet. This measure took immediate effect and with no set timeframe, dealing a significant blow to the country's Bitcoin mining activities. As a result, Bitcoin plummeted, dipping to a low of $42,536.

https://twitter.com/EggieStudySesh/status/1478798617519534089?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1478798617519534089%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.horizonnextsumari.com%2Farticle%2F3210

Root Cause of the Protest

According to foreign media reports, the protest was triggered by the Kazakh government's cancellation of gasoline subsidies, resulting in a sudden and significant increase in gasoline prices overnight. This sparked nationwide violent protests, with demonstrators storming government buildings. The government declared a state of emergency nationwide and shut down the internet to prevent the spread of information online. As a result, the country's internet remains paralyzed.

What’s as interesting (to me at least) is the shield one of the protesters is carrying there. When stuff like that comes out it usually means protests have stepped up a notch, in this case very quickly. https://t.co/9M9dW5GSyO

— Jake Hanrahan (@Jake_Hanrahan) January 4, 2022

Kazakhstan has also announced the resignation of the cabinet.

With low energy prices in Kazakhstan, the country's enterprises have an average electricity cost of only $0.055 per kilowatt-hour, much cheaper compared to the United States' $0.12 per kilowatt-hour based on global gasoline prices. This low energy cost has made Kazakhstan a major base for Bitcoin miners in recent years. Following China's crackdown on mining companies last spring, the majority of miners chose to relocate to Kazakhstan.

The Kazakh authorities have cut off the national internet and mobile communications. The business center Almaty and the capital Nur-Sultan have both declared a state of emergency, with Almaty being the main protest site. Kazakh state television station Khabar 24 reported in the evening that the state of emergency has been extended throughout the country and will be in effect until January 19, with a curfew from 11 pm to 7 am.

The White House and the United Nations have publicly urged the Kazakh government to exercise "restraint" in handling violent civil unrest.

Bitcoin Hash Rate Drops by Over 13%

When the state-owned telecommunications company Kazakhtelecom shut down the internet, network activity plummeted immediately. Data from YCharts.com shows that the Bitcoin hash rate plummeted by 13.4%, dropping from 205,000 petahashes PH/s on New Year's Day to 177,330 petahashes PH/s after the network shutdown.

In terms of Bitcoin hash rate, Kazakhstan has become the world's second-largest country, second only to the United States.

This article is authorized to be republished from Horizon News Network