Bitcoin and alt coins have started recovering losses today after Evergrande announced that it would fulfill its loans repayment obligations.
On Sept 23 noon, Bitcoin surged to above $44,300 level, 12 hours after Evergrande announcement to pay its due loans. Announcement of Evergrande Group, a Chinese real estate giant, has curbed ongoing erosion in cryptocurrencies market globally.
Meanwhile, Ethereum also crossed $3100 level today after felling below $3000 on Sept 22 as fears of the Evergrande crisis sweep through global markets. The digital currency has dropped 5.7% in the last 24 hours, and started recovery from this morning.
The fall followed a major drop in US stocks on Monday, as Wall Street’s fears turned to China. Investors have been uneasy over the deepening crisis of Evergrande, a massive Chinese property conglomerate that’s at risk of defaulting.It was the worst performance since May for the S&P (SPX) and the Nasdaq (COMP), while the Dow (INDU) logged its worst day since July.
Experts have characterized Evergrande’s struggles as a major test for Beijing, with some worrying about whether the company risks creating China’s Lehman Brothers moment. While other analysts have said it’s far from certain that Evergrande’s crisis will become a similarly far-reaching event, the crisis has sent shockwaves across the world.
The property firm, which is struggling to manage its $300 billion mountain of debt, was supposed to pay the interest on some of its bank loans Monday, according to Bloomberg. Evergrande did not respond to a request from CNN Business for comment about those payments.Interest on two of its bonds worth more than $100 million is also due later this week, according to Refinitiv. Shares of Evergrande fell 5.7% in Hong Kong on Tuesday, extending Monday’s losses. Even though the company primarily serves mainland China, investors around the world are worried. The massive amount of money borrowed by Chinese companies has long been considered a looming threat to market stability.
Now investors fear the exposure that banks might have to Evergrande and companies like it.US banks fell on Monday, with Goldman Sach (GS) and JPMorgan (JPM) among the Dow’s worst performers.The issue had already weighed on Hong Kong markets earlier in the day, as Chinese banks, insurers and other real estate companies were slammed.
