Updated on September 20, 2021 at 1:40 p.m. EDT
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Cryptocurrency prices plummeted on Monday morning, with many of the world's largest digital currencies on the decline for the first time in more than a month, amid a broad market selloff triggered by concerns over a potentially catastrophic debt default in China. The price fell to a low.
important facts
The value of global cryptocurrencies plunged to a low of less than $1.9 trillion by 8:45 a.m. EDT Monday, 11% from 24 hours earlier, according to cryptocurrency data website CoinMarketCap. declined in the near future, reflecting losses of more than $250 billion.
Following the decline in market value, Bitcoin price fell 9% to below $42,669, while Ether price fell nearly 10% to a low of $2,940, each marking its lowest since early August.
Even tokens that have soared recently, such as Solana’s Sol and Cardano’s Ada, plummeted by around 10% at the height of the selloff.
Digital asset broker GlobalBlock's Jonas Lucey said in a note on Monday, after the stock price of Evergrande, a Chinese real estate giant with more than $305 billion in debt, fell to an 11-year low, triggering a sharp decline. He said there was a sudden drop. Analysts warned that the company's possible collapse could pose risks to the broader market.
Lucy also pointed to increased regulatory scrutiny as a reason for the panic selling, with Bloomberg reporting over the weekend that the world's largest cryptocurrency exchange, Binance, was cited by U.S. regulators for possible insider trading and market manipulation. reported that it is being investigated.
As prices plummet, El Salvador's President Nayib Boucle announced that his country will take advantage of the price drop in its second “buy on the market” this month, spending about $6.5 million to increase its cryptocurrency holdings by 150 Bitcoins. did.
tangent
Evergrande, China's second-largest real estate developer, warned banks last week that it would not be able to repay its debt due this month, sparking a sharp decline in China's real estate sector. In a note last week, Tom Essay, a market analyst and author of the Seven's Report, cited a U.S. investment bank that went bankrupt in 2016 and said a default would trigger a “Lehman moment” in China. Losses quickly spread across the broader market as experts began warning that it was possible. The beginning of the Great Recession. “There is not enough clarity and uncertainty about how the Evergrande challenge will affect the global economy,” David Bernsen, a wealth advisor at The Bernsen Group in California, said in an email Monday. “Sex is enough to shake up the market.”
Main background
In addition to the historic implementation measures, talk of digital collectibles known as non-fungible tokens and concerns about rising inflation have also buoyed the cryptocurrency market since China's restrictions caused a nearly 50% plunge in early May. has helped reduce losses, but is still down nearly 25%. From an all-time high four months ago. Analysts at JPMorgan said in a note earlier this month that the recent boom in the small-cap crypto market, which is less established than Bitcoin, may reflect “frothiness and retail investor mania.” high, noting that such mania has historically resulted in corrections of close to 50%.
References
Solana's market value plummets by $20 billion after outage – is this a good thing for Ethereum? (Forbes)
Inside the coming war over money and cryptocurrencies (Barons)
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