The cryptocurrency market fell to a local minimum of USD 1.87 trillion this Monday, September 20 at 12:45 UTC, which reflected a fall of 11% in a period of 24 hours. The decline in the total market value of bitcoin (BTC) and cryptocurrencies, which was USD 255,000 million, coincided with the fall in the rest of the markets, which was attributed to the crisis of Evergrande, one of the largest real estate companies China.
While the total market value fell below USD 2 trillion this Monday, for the first time since August 19 , the price of bitcoin fell from $ 47,224 to a low of $ 42,728, a 9.52% drop in the last 24 hours.
At the time of writing, the price of BTC registers a small rally and is trading at $ 43,688, according to the CriptoNoticias price index. Bitcoin’s market capitalization fell from $ 897 billion to $ 821 billion, the equivalent of a 8.47% decline in the last 24 hours .
Evergrande debt precipitated the crisis
Evergrande would be unable to face several millionaire interest payments due this week, on a debt that exceeds USD 300,000 million. The fear of the bankruptcy of this firm could drag the real estate sector throughout China and other Asian countries.
In addition to the fact that the company’s price fell 10% this Monday in the Hong markets. Kong, the Hang Seng stock index fell 7%. This drop, which is the largest since 2016, extended hours later to the European and North American markets, including cryptocurrencies.
According to the El País newspaper report from Beijing, the markets fear that, if the Chinese government does not intervene, Evergrande’s liquidity problems could precipitate a wave of bankruptcies and dragging the financial sector that granted a large number of loans to both real estate companies and clients. Evergrande’s debt is equivalent to 2% of China’s Gross Domestic Product (GDP) , and is equal in magnitude to the entire South African economy.
The Dow Jones Industrial Average closed this Monday with 164 points down, or 1.8%, while the The S&P 500 index lost 2.2% and the NASDAQ fell 2.1%. For these last two indices it is the biggest drop since May, while Dow Jones faces its biggest decline since last July, according to data from Barrons.
The crisis gave signs of its closeness
CriptoNoticias commented on Thursday, September 16, an analysis by Reuters about the possibility of a global economic crisis if Evergrande went into default. Already on that date, the most important banks in China had been notified that Evergrande could not meet the payment commitments that were due this Monday.
Given the possibility of this scenario, there were those who raised bitcoin as a good store of value to protect yourself. But, as has been seen, the crypto asset failed to decouple from the stock markets and fell along with them. Something similar happened on the so-called “Black Thursday” of 2020, which was unleashed with the health crisis caused by COVID-19.