Bitcoin drops to nearly $ 40,000 in fear of China’s debt crisis

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Bitcoin’s bull run of 2021 ended in June when Chinese regulators are cracking down on cryptocurrency miners. Bitcoin, ether and almost all other cryptocurrencies saw a sharp decline on Monday night, and this seems to be tied to activities in China again, albeit of a different nature this time.

Bitcoin’s price has fallen over 11% in the past 24 hours, and was at just over $ 41,600 at the time of writing. The cryptocurrency fell nearly below $ 40,000 when it dropped to $ 40,500 at 5:30 p.m. PT time. It would be the first time Bitcoin’s price fell below $ 40,000 since early August. Bitcoin’s all-time high was $ 64,863 and was hit on April 14th.

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Ether, the second largest cryptocurrency by market capitalization, however the currency most commonly used in crypto transactions, is down 12% in the last 24 hours. It’s just over $ 2,900, the first time it has fallen below $ 3,000 since Aug. 8. Dogecoin is close to 20 cents, across from his 70 cent high for headlines in May.

Number down

Not a nice chart for Bitcoin holders.

coinmarketcap.com

Because it is a decentralized system, it is often difficult to pinpoint exactly what is causing the cryptocurrency markets to crash. Monday’s price action is believed to be related to the Chinese real estate market, and in particular Chinese company Evergrande Group. Evergrande is the world’s most heavily indebted real estate company with liabilities exceeding $ 300 billion, and markets around the world have collapsed on fears that China will allow Evergrande to default on that debt.

The Dow Jones Industrial Average is down 1.78% while the Hang Seng Index in Hong Kong is down 3.38%.

An Evergrande default could have a dramatic impact on China’s entire economy, which in turn could affect countries around the world. The Evergrande collapse has been likened to the Lehman Brothers bankruptcy that preceded the global financial crisis, although its effects are unlikely to be as severe. Evergrande’s stock is down 85% over the past year, and its offices across China have seen protests from injured employees, builders and homeowners.

It was a turbulent month for Bitcoin, rising in late August and early September in anticipation of the cryptocurrency becoming legal tender in El Salvador, a world first. The introduction of Bitcoin in El Salvador has been plagued by a number of technical issues. which apparently scared big investors and caused big sell-offs.

Chinese authorities caused a collapse in cryptocurrency markets in June Officials made it clear that a ban on mining and other cryptocurrency-related services would be more strictly enforced in 2013. It is part of a larger crackdown on technology companies in China that is currently taking place in China saw government targeting companies like Ant Group, Didi, and ByteDance.

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