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    Home»Bitcoin»Bitcoin fell in price following the default of Evergrande. How is this related
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    Bitcoin

    Bitcoin fell in price following the default of Evergrande. How is this related

    AdministratorBy Administrator10.12.2021No Comments3 Mins Read
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    There is an opinion that the bankruptcy of a Chinese company may be reflected in the quotes of cryptocurrencies. Experts told if there is a relationship between Evergrande and digital assets

    Bitcoin fell in price following the default of Evergrande How

    On December 9, Fitch downgraded China’s diversified holding company China Evergrande Group and its subsidiaries to Limited Default (RD) due to the failure to pay two coupon payments after the grace period expired on Monday 6 December. The rating agency explained that they had not received a response to the request for confirmation of the payment, therefore, they believe that it was not made. Fitch is confident that Evergrande will be liquidated as a result of bankruptcy.

    After the downgrade on the night of December 10, the bitcoin rate dropped to $ 47.4 thousand, after which it began to recover. The cost of the cryptocurrency sharply exceeded $ 50 thousand in the afternoon of the same day following the publication of record inflation data in the United States. According to the results of November, annual inflation in the country became the maximum since 1982 – 6.8%. At 19:50 Moscow time, the asset is trading at $ 47.7 thousand.

    Many crypto market participants are confident that the position of Evergrande has a negative impact on bitcoin quotes. Against the background of the appearance on the network of information about the default of the Chinese developer in early November 2021, market participants held an auction to place 30-year US government bonds, explained Roman Nekrasov, co-founder of the ENCRY Foundation. Due to rising inflation rates, sellers faced low demand, resulting in a collapse in prices and a jump in yields. These changes have strengthened the position of the dollar in the international arena. This behavior of the main reserve currency put pressure on high-risk assets, including Bitcoin, the expert said.

    “Let me remind you that the representatives of Evergrande stated that it was impossible to guarantee the fulfillment of financial obligations on December 4, 2021 – on Saturday. To get the necessary liquidity, market participants had to sell cryptocurrency, since at that time only the digital asset market was open, “Nekrasov emphasized.

    On December 4, the price of bitcoin dropped to $ 42 thousand for the first time since the end of September. During the day, the asset became cheaper by more than 20%. A sharp drop in quotes provoked a massive liquidation of positions, as a result of which traders lost more than $ 2.5 billion.

    Anton Kravchenko, CEO of Xena Financial Systems, did not find any significant relationship between the position of the Chinese developer and the decline in the bitcoin rate. Looking ahead, however, he believes that active real estate investors may turn their attention to risk hiding again. As a result, they can probably see an alternative in cryptocurrencies and add them to their investment portfolio, the specialist suggested.




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    Bitcoin default Evergrande fell Price related
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