On September 21 this year, the global crypto market experienced a slide due to the uncertainty in the Chinese markets.
Bitcoin and Ethereum Dip
Even after enduring a massive beating, cryptocurrencies like Ethereum (ETH) and Bitcoin (BTC) continued to dip in the next 24 hours.
According to CoinGecko, a cryptocurrency metric, BTC fell 6.4%. Currently, it is trading at $40,835.76. Meanwhile, the second-largest digital asset in the market, ETH, slid 8.6% (valuing at $2,763). This is the lowest ETH has hit since its absolute low of $3,000 in August this year.
The value of altcoins also went down. Two weeks ago, altcoin Solana had hit an all-time high mark of $189. Now it is down 35%, trading at $122.20. Nearly every altcoin has been affected by the dips. In fact, the entire digital asset market is shaking. It saw the liquidation of crypto futures worth $1.2 billion in one day.
Chinese Company Evergrande’s Fallout to Blame
One of the most notable causes for the current state of affairs is the financial fallout of Evergrande, a huge Chinese company. The company owes around $305 billion in debt.
Evergrande, a property developer giant, may fail to repay its debt and lead to a collapse. According to the regulators, the Chinese financial system is in jeopardy unless it finds a solution to this issue.
Why Americans are affected by this is because many banks and global asset managers hold dollar-dominated bonds from Evergrande. During international economic uncertainty, investors are tempted to sell riskier assets, including equities.