The uncertainty surrounding the Chinese real estate company Evergrande is putting pressure on the crypto market. Potential Bitcoin panic sales could cause further price drops.
The fear of a possible bankruptcy of the real estate developer Evergrande from China and the effects on China’s economy and other markets has finally hit the crypto sector. After a drop of eight percent to below 43,000 US dollars on Monday, the Bitcoin price fell to 40,500 dollars on Tuesday.
Impending real estate crisis puts pressure on the crypto market
The current bad mood on the financial markets is affecting cryptocurrencies as it is a relatively new asset class, according to market analyst Timo Emden from Emden Research.
China could let the heavily indebted Evergrande group hit the wall and thus possibly trigger a global real estate crisis.Timo Emden from Emden Research
Accordingly, investors are currently trying to park their money in potentially safe asset classes. In addition to the US dollar, this also includes gold. Risky investment opportunities such as Bitcoin or other cryptocurrencies are currently rather unattractive. If the Bitcoin price should slide permanently below the mark of $43,000, there is a risk of new turbulence, according to Emden. The Bitcoin price was listed at $40,500 on Tuesday evening.
Bitcoin price and Evergrande: panic reactions possible
An Evergrande bankruptcy and the resulting stock market turbulence could lead to a panic reaction, especially among speculative investors, according to Emden. Adam Reynolds from Fintech Saxo Capital Markets, quoted by Handelsblatt, also expects “further liquidations”.
Bitcoin and Ether are affected by the ‘risk-free dynamic’ which has increased since the end of last week.Adam Reynolds