Did conflicting reports about Evergrande defaulting cause Bitcoin to tank?

Did conflicting reports about Evergrande defaulting cause Bitcoin to tank?

The cryptocurrency market has seen a large dip after the Chinese government announced that an investment company, Evergrande Group defaulted on billions of dollars worth of loans. The prices dipped as low as $8,000 before climbing back up to around $10,000 USD.

The “how does evergrande affect crypto” is a question about how the defaulting of Evergrande Bank in China affected Bitcoin. The answer to this question is that conflicting reports about the defaulting caused Bitcoin to tank.

Did conflicting reports about Evergrande defaulting cause Bitcoin to tank?

 

Just before Bitcoin’s latest price drop, conflicting reports surfaced concerning whether Chinese property company Evergrande had defaulted on its outstanding loan payments.

Evergrande Group is China’s second-largest property developer, with a $300 billion debt load. Its demise is feared to be the start of a larger financial disaster.

On Nov. 10 at 4 p.m. UTC, two minutes after Evergrande’s payment was due, the Deutsche Markt Screening Agentur (DMSA) announced that it was preparing insolvency procedures against Evergrande.

Bitcoin started its hours-long decline to $62,800 two hours later, around 6 p.m. UTC.

Morning Brew announced around 45 minutes later that Evergrande had defaulted after missing a payment on an outstanding obligation that was due on Wednesday at 4 p.m. UTC. After another 45 minutes, Bloomberg published a report claiming that it hadn’t.

Several hours after the first plunge, prices steadied at $64,500. “Contrary to what you may have read on the internet, Evergrande did not default today,” Bloomberg writer Allison McNeely tweeted at the time.

According to William Fong, a veteran trader at Australian crypto-asset investing platform Zerocap,

“In the foreign USD bond market, Evergrande has not publicly defaulted on any of its offshore loan commitments.” 

“At the end of the day, $148 million is tiny compared to Evergrande’s $300 billion in debt, but it does raise concerns about the $100 billion in outstanding ‘keep-well’ structured offshore bonds held by Chinese SoEs and corporations,” he said.

Fong feels that Evergrande will not get a bailout anytime soon because “Chinese regulators were the initiators of a cap aimed at over-expansion in developer’s leverage,” adding, “Chinese regulators were the initiators of a cap aimed at over-expansion in developer’s leverage.”

“This has generated a danger of contagion throughout the whole property developer area, as well as financial institutions and sectors that rely on the industry.”

Some feel the Bitcoin price might be harmed by a stock market crash, as well as concerns that roughly half of Tether’s reserves, worth over $30 billion, are made up of commercial paper. The Financial Times considers Tether to be one of the “global titans” in this area. 

Investors are taking a closer look at Bitcoin as a result of record-high inflation.

Tether, on the other hand, has denied holding any commercial paper from Evergrande, despite the fact that it may be exposed to Chinese firms. Commercial paper is a short-term corporate financial instrument having an expiry date of less than a year.

The “ethereum breakout” was a report that Evergrande defaulted on their debt. This caused Bitcoin to tank.

  • cryptopotato
  • tether chinese bonds
  • will btc crash
  • crypto news
  • evergrande crisis

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