Bitcoin wobbles because Evergrande is about to default? – Bitcoin magazine

The mixed news of a possible default by Chinese real estate giant Evergrande came just before Bitcoin’s $ 5,000 crash early that morning.

The Evergrande Group is China’s second largest real estate developer and owes about $ 300 billion. There are fears that its demise could spark a wider financial crisis.

Two minutes after Evergrande’s payment was due, the German Market Screening Agency (DMSA) published notification at 11:00 p.m. on November 10th (4:00 p.m. UTC) that they are preparing bankruptcy proceedings against Evergrande.

Two hours later, Bitcoin began a one-hour crash back to $ 62,800.

Source: TradingView

The Morning Brew media reported about 45 minutes later that Evergrande was unable to pay a debt due at 11:00 p.m. last night that was in default. For the next 45 minutes, Bloomberg reports that nothing has happened yet.

The price stabilized at around $ 64,500 a few hours after the decline. It did so at the same time as Bloomberg reporter Allison McNeely tweeted, “Contrary to what you may have heard ~ on the internet ~, Evergrande is not behind schedule today.

William Fong, senior trader at Australian crypto asset investment platform Zerocap, said:

“Evergrande has not officially defaulted on overseas debt in the international USD bond market.

In short, $ 148 million is nothing compared to Evergrande’s $ 300 billion debt, but it does give cause for concern over $ 100 billion of SoE’s “retainable” structured bonds and Chinese companies ” .

Fong believes a rescue package for Evergrande won’t come anytime soon because “Chinese regulators are initiating the cap to increase the giant’s leverage.”

“This has created a potential risk of contagion across real estate development space and has spread to financial institutions and industries that are sector dependent.”

Some believe Bitcoin price could also be at risk due to a stock market downturn and concerns that nearly half of Tether’s reserves come from nearly $ 30 billion in commercial paper. That is enough for the Financial Times to classify Tether as a “global giant”.

However, Tether has denied allegations of holding Evergrande’s trading papers, even though it may have exposure to Chinese companies. A commercial paper is a corporate bond with a short expiration date, usually less than a year.

Annie

According to Cointelegraph

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