July 14, 2024

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Cryptocurrency Market Loses 5,000 Million Due to China Real Estate Crisis

Cryptocurrency Market Loses $255,000 Million Due to China Real Estate Crisis

The cryptocurrency market plunged to a local low of $1.87 trillion on Monday, September 20 at 12:45 UTC, reflecting a decline of 11% in a 24-hour period. The decline in the total market capitalization of Bitcoin (BTC) and cryptocurrencies, which reached $255,000 million, coincided with the decline in the rest of the markets, which was attributed to the crisis of Evergrande, one of the largest real estate companies in China. .

While the total market value It fell below $2 trillion on Monday, for the first time since August 19, price Bitcoin It fell from $47,224 to $42,728, down 9.52% in the past 24 hours.

At the time of writing, the price of BTC is slightly up and is trading at $43,688, according to for price index From CriptoNoticias. The market capitalization of Bitcoin has fallen from $897 billion to $821 billion. Equivalent to a decrease of 8.47% in the last 24 hours.

Evergrande debt precipitated the crisis

Evergrande will not be able to meet several million interest payments due this week, on debt exceeding $300,000 million. Fear of Bankruptcy of this company, could drag the real estate sector throughout China and other Asian countries.

In addition to the company’s share price falling 10% on Monday in Hong Kong markets, the Hang Seng stock index is down 7%. The drop, the largest since 2016, extended after hours to the European and North American markets, including cryptocurrencies.

According to a report by El PaĆ­s newspaper from Beijing, the markets fear that if the Chinese government does not intervene, Evergrande’s liquidity problems could precipitate a wave of bankruptcies and drag the financial sector that granted a large number of loans to the riyal. Real estate companies and clients. The debt of the Evergrande is equivalent to 2% of China’s GDP, equal in size to the entire South African economy.

Bitcoin price in the top panel, next to the NASDAQ (NDX), S&P 500 (SPX), and Dow Jones (DJI) indices. Source: TradingView.

On Monday, the Dow Jones Industrial Average closed 164 points, or 1.8%, down, while the S&P 500 lost 2.2% and the Nasdaq fell 2.1%. For these last two indices, this is the biggest drop since May, while the Dow Jones faces its biggest drop since last July, according to Barons data.

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The crisis gave signs of its approaching

CriptoNoticias commented Thursday, September 16, in a Reuters analysis on The possibility of a global economic crisis If Evergrande goes into default. Already on that date, the most important banks in China were notified that Evergrande could not meet the payment obligations that were due on Monday.

Given the possibility of this scenario, there were those who collected bitcoin as a good store of value to protect themselves. But, as we have seen, the crypto-asset failed to break away from the stock markets and fell with them. Something similar happened in the so-called Black Thursday for the year 2020, which erupted with the health crisis caused by COVID-19.