• China loses one of its biggest real estate partners, causing an economic setback.
• Crypto market worldwide plummets by over $1.9 trillion in 24 hours.
Crypto markets took a nosedive on Monday after Evergrande defaulted on some settlement debts in China. These problems have affected most popular cryptocurrencies, including Bitcoin that has now plunged below $44,000.
The most popular real estate company in China, Evergrande, notified it was not rendering its services during the week because it could not cover the debt for September. With this announcement, the entire real estate industry collapsed, causing a great catastrophe in the country.
Crypto markets start the week with bigger losses
With the Evergrande situation, several companies in the country were affected. Evergrande’s problems represent a huge loss for the financial market, affecting the economy in the world and indirectly the crypto markets.
The most popular cryptocurrencies lost over 8.34 percent of their value. The crypto market valuation in the world dropped by $1.9 trillion, representing over 10 percent in almost a day.
Bitcoin price at the time of writing is at $43,905, with Ethereum reaching a value of $3,076, while ADA is trading at $2.15. This represents a bad start to the week for the crypto market that seemed to be recovering after its sell-off in May.
Why did Evergrande affect cryptocurrencies?
An agent from the GlobalBlock platform clarifies why the Evergrande situation affected crypto markets so much. When the real estate company left the markets in China, it took over $305 billion which caused a great financial dissolution. This setback has led the economy in China and worldwide to fall significantly.
Although cryptocurrencies are not tied to the Chinese government or other countries suffering this economical setback, several enthusiastic entrepreneurs were affected. The companies had no choice but to sell the cryptos they had invested in, avoiding a greater loss.
The problems in the crypto market could also abound due to the possible regulations that the US government wants to promote. The largest crypto trading platform, Binance, is being investigated by US and UK regulators for manipulating the market, although there is seemingly no proof yet.
Expectations that cryptocurrencies will hit new all-time highs before the year is out are being questioned. However, Bitcoin is unlikely to crash below $40,000, so it is expected to continue to attract new investors.