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Monday, October 18, 2021

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$ 250 billion vanishes from cryptocurrency market due to Evergrande case


Cryptocurrency prices plunged Monday morning during a widespread market sell-off sparked by concerns of a potentially catastrophic debt default in China, pushing many of the world’s largest digital currencies to their lowest levels. in more than a month.


The value of the world’s cryptocurrencies plummeted to a low of less than $ 1.9 trillion as of 8:45 am EDT Monday, almost 11% less than 24 hours earlier and reflecting a loss of more than $ 250 billion, according to the crypto data website CoinMarketCap.

Faced with losses in market value, the price of bitcoin fell 9% to less than $ 42,669 while ethereum prices fell almost 10% to a low of $ 2,940, marking each of its lowest levels since early August.

In a note on Monday, Jonas Luethy of digital asset broker GlobalBlock said the sudden pullback came after shares in Chinese real estate giant Evergrande, which has more than $ 305 billion in liabilities, fell to its level. lowest in 11 years, prompting a strong sell-off.

Analysts warn that the company’s potential collapse could pose risks to the broader market.

Luethy also pointed to increased regulatory scrutiny as a reason for the panic selling, and Bloomberg reported over the weekend that Binance, the world’s largest crypto exchange, is under investigation by US regulators, for possible insider trading and market manipulation.

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When prices fell, El Salvador’s president, Nayib Bukele, announced that the nation took advantage of the price drop and “bought the drop” for the second time this month, spending approximately $ 6.5 million to increase its cryptocurrency holdings by 150 bitcoins. .


Evergrande, China’s second-largest real estate developer, alerted banks last week that it would not be able to make payments on debt that are due this month, causing a sharp drop in Chinese real estate.

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The losses quickly spread to broader markets as experts began to warn that their default could potentially create a Chinese “Lehman moment,” wrote market analyst Tom Essaye, author of the Sevens Report, in a note last week, referring to the US investment bank that collapsed at the start of the Great Recession.

“There is not enough clarity on how Evergrande’s challenges may affect the global economy and that uncertainty is enough to scare the markets,” wealth advisor David Bahnsen of The Bahnsen Group of California said in an email Monday.


Along with historic adoption measures, the buzz around digital collectibles known as non-fungible tokens, or NFTs, and concerns about rising inflation have helped the cryptocurrency market cut losses since regulation in China sparked a drop of almost 50% in early May, although it is still down almost 25% from an all-time high of four months ago.

In a note earlier this month, analysts at JPMorgan warned that the recently booming market for smaller cryptocurrencies less established than bitcoin likely reflects “the retail investor mania and foam,” noting that that mania has historically result in corrections of almost 50%.

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Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: Tammy@oicanadian.com Phone: +1 513-209-1700

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