Cryptocurrency market last week: After Evergrande comes a blow from China

Cryptocurrency market last week: After Evergrande comes a blow from China

When the negative news about the debt-heavy real estate company Evergrande surfaced in the middle of this week, investor sentiment was immediately affected. Digital currencies also joined the sharp decline in risky assets as investors became more cautious. Not having time to “get up” from the viral effects of Evergrande, the virtual currency market received another “blow” this weekend: China banned all virtual currency transactions.

Evergrande is on the verge of insolvency

News of Evergrande’s potential default was picked up again last week and culminated in protests demanding funds from investors, home buyers and outstanding payments to suppliers. With a mountain of more than 300. debts Billion USD and paying back very little money, Evergrande is now on the verge of default. This news also has a negative impact on risky assets and the virtual currency market is one of them.

In fact, the unusual nature and fragmentary, unpredictable market behavior make cryptocurrencies one of the riskiest assets. And while investors with a high risk appetite can find ways to get involved in order to maximize returns, it will be difficult for them to hold on to the virtual currency in the turbulent times of an impending financial crisis.

Global market participants also fear a possible domino effect and the crypto industry will not be spared the effect either.

China bans all crypto-related transactions

All digital currencies, including Bitcoin and Tether, are not legal tender and cannot circulate in the market, the People’s Bank of China said on its website. All virtual currency transactions – including services that provide foreign exchange to Chinese citizens – are considered illegal financial activities, the PBoC said in a statement.

Bitcoin price fell 6% and Ethereum fell as much as 10% amid a September 24 sell-off.

With the news above, some virtual currency holders in China and Hong Kong are rushing to find ways to protect Bitcoin and other digital currencies that they hold.

“Almost 2 hours after the announcement, I received dozens of messages – email, phone and crypto apps – from crypto owners. They want a solution for accessing and protecting virtual currencies on foreign exchange and cold wallets, ”said David Lesperance, attorney in Toronto.

Lesperance said the move from Beijing should “freeze” virtual assets, and as such, owners cannot legally do anything with them. “I suspect that the Chinese government can do something not only with an extremely volatile asset like cryptocurrencies, but also the possibility of converting these digital currencies into digital renminbi at a fixed market price in the future.

“I’ve been forecasting this for a while as the Chinese government has tried to eliminate all digital currencies that compete with the digital yuan,” said Lesperance.

Cryptocurrency market capitalization “evaporates” 250 Billion USD

Bitcoin price is now $ 42,679 after falling to nearly 40,000 USD in September 24 after news that China has banned virtual currencies. In the past 7 days, Bitcoin is down almost 11%. Meanwhile, Ethereum is down more than 15%, Ripple is down more than 11% and Binance Coin is down 14%.

Market capitalization of cryptocurrencies of 2,150. sunk Billion USD up to 1,900 Billion USD on the morning of September 25th, that’s a reduction of VND 250 billion USD in 1 week.

Price movements of the top 10 largest cryptocurrencies

Vu Hao

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