Hong Kong (CNN Business) – Bitcoin is falling as fears of the Evergrande crisis spread through global markets.
The digital currency is down 5.7% in the past 24 hours, trading at $ 42,955 per coin as of 2:43 a.m. ET on Tuesday, according to cryptocurrency tracker Coindesk.
Previously, it was down as much as 12%.
Other cryptocurrencies are also falling. Ethereum and dogecoin are down 4.4% and 6%, respectively, in the last 24 hours.
The slide came after a major slide in US stocks on Monday, when Wall Street fears focused on China. Investors have been uneasy about the worsening crisis at Evergrande, a huge Chinese real estate conglomerate that is at risk of defaulting.
It was the worst performance since May for the S&P and Nasdaq indices, while the Dow posted its worst day since July.
Experts have called Evergrande’s difficulties a major test for Beijing, with some worrying that the company is at risk of becoming China’s “Lehman Brothers”. Although other analysts have said that it is not certain that the Evergrande crisis will turn out to be such a far-reaching event, the crisis has shocked everyone.
The real estate company, which is struggling to manage its $ 300 billion mountain of debt, was due to pay interest on some of its bank loans on Monday, according to Bloomberg. Evergrande did not respond to a request from CNN Business for comment on those payments.
Interest on two of its bonds worth more than $ 100 million are also due this week, according to Refinitiv. Evergrande shares fell 5.7% in Hong Kong on Tuesday, amplifying Monday’s losses.
Although the company primarily serves mainland China, investors around the world are concerned. The huge amount of money loaned by Chinese companies has long been seen as an imminent threat to market stability. Now investors fear the banks’ exposure to Evergrande and similar companies.
US banks fell on Monday, with Goldman Sach and JPMorgan among the worst performers on the Dow.
The issue had already weighed on Hong Kong markets earlier in the day, as Chinese banks, insurance companies and other real estate companies suffered.
Edward Moya, Senior Market Analyst of the Americas at Oanda, said on Monday that bitcoin was no different from other assets.
“The fallout from Evergrande is making a tremendous dent in risk appetite that is sending everything down,” he wrote in a note to clients.
Moya noted that cryptocurrencies have performed well this year, “despite all the volatility.”
“So it should come as no surprise that Wall Street is the first asset to be sold at the start of the China-led market sell-off,” as investors look to profit, he added.
Others have taken the opportunity to double down. Nayib Bukele, the president of El Salvador, known for his bullish stance on bitcoin, tweeted on Monday we “just bought the fall”.
The country bought 150 bitcoins, and now has 700 coins, he added.
Earlier this month, Bukele announced that El Salvador had become the first country in the world to adopt digital currency as legal tender.
–Anneken Tappe and Laura He contributed reporting.