What happened
Even by the relatively high-volatility standards of the cryptocurrency sphere, Bit Mining (BTCM 27.78%) was having a tough week. As of Thursday's market close, the company's share price was down a queasy 33% week to date. Recent developments on the other side of the world are making investors very nervous about this stock.
So what
Two developments in a pair of neighboring countries combined to put the hurt on Bit Mining's stock.
First, in Kazakhstan, continued social unrest has led to government countermeasures that include widespread internet blackouts. Bit Mining could potentially take a big hit because of this, as it decamped to the sprawling Central Asian country last August after China banned the mining of cryptocurrencies such as Bitcoin.
Image source: Getty Images.
Meanwhile, Russia's central bank has proposed a sweeping ban on crypto mining and use within its borders. The bank fears that cryptocurrency is essentially a large-scale financial scam that threatens the sovereignty of fiat currencies like its ruble, according to a report in Bloomberg citing a report from the bank.
Cryptocurrency mining, an energy-intensive activity, is also a threat to the nation's energy supply, the bank believes, and imperils its efforts to become more eco-friendly.
The use of cryptocurrency as payment for goods and services is already illegal in Russia; additionally, mutual funds based in the country are prohibited from investing in such assets.
Now what
It's understandable that investors are spooked about these developments, which, to understate the case, are rather unfavorable to Bit Mining.
While the company has mining operations in other parts of the world -- like in the U.S., where it just announced that it reached around 50 megawatts of power capacity at a mining site in Ohio -- it might face some very dark and challenging times in that increasingly crypto-unfriendly part of the world.
