{"id":365410,"date":"2021-11-11T10:43:09","date_gmt":"2021-11-11T07:43:09","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/did-conflicting-reports-about-evergrande-defaulting-cause-bitcoin-to-tank\/"},"modified":"2021-11-11T10:43:09","modified_gmt":"2021-11-11T07:43:09","slug":"did-conflicting-reports-about-evergrande-defaulting-cause-bitcoin-to-tank","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/did-conflicting-reports-about-evergrande-defaulting-cause-bitcoin-to-tank\/","title":{"rendered":"# Did conflicting reports about Evergrande defaulting cause Bitcoin to tank?"},"content":{"rendered":"

“# Did conflicting reports about Evergrande defaulting cause Bitcoin to tank? <\/strong>”
\n<\/p>\n

Conflicting news<\/a> about whether Chinese property giant Evergrande had defaulted on its overdue loan payments emerged just before Bitcoin\u2019s recent price crash.<\/p>\n

Evergrande Group is China\u2019s second-largest property developer and is in debt<\/a> for roughly $300 billion. There are fears that its collapse could spark a wider financial crisis.<\/p>\n

Two minutes after Evergrande\u2019s payment was due, the Deutsche Markt Screening Agentur (DMSA) issued an announcement<\/a>\u00a0on Nov. 10 at 4 p.m. UTC stating that it was preparing bankruptcy proceedings against Evergrande. <\/p>\n

Two hours later at about 6 .p.m. UTC, Bitcoin began it\u2019s hours-long pullback to $62,800. <\/p>\n

Media<\/a> outlet Morning Brew<\/a> reported about 45 minutes later that Evergrande had missed a payment on its outstanding debt which was due on Wednesday at 4 p.m. UTC and defaulted. Another 45 minutes passed before Bloomberg<\/a> issued a story saying that it hadn\u2019t.<\/p>\n

Prices stabilized around $64,500 several hours after the initial drop. This was around the same time Bloomberg reporter Allison McNeely\u2019s tweet<\/a>ed \u201ccontrary to what you may have heard ~on the internet~ Evergrande did not default today.\u201d <\/p>\n

William Fong, senior trader at Australian crypto-asset investment platform Zerocap, told Cointelegraph:<\/p>\n

“Evergrande has not officially defaulted on any of its offshore debt obligations in the international USD bond market.”\u00a0<\/p><\/blockquote>\n

\u201cBottom-line, $148 million is nothing compared to the $300 billion outstanding debt of Evergrande, but it does create a concern for the $100 billion outstanding \u2018keep-well\u2019 structured offshore bonds by Chinese SoEs and corporates,\u201d he stated.<\/p>\n

Fong believes that a bailout for Evergrande will not come any time soon because \u201cChinese regulators were the initiators of a cap aimed at over-expansion in developer\u2019s leverage,\u201d adding:<\/p>\n

\u201cThis has created potential contagion risk across the entire property developer space and has expanded towards financial institutions and industries dependent on the sector as well.\u201d<\/p><\/blockquote>\n

Some believe the Bitcoin price could also be at risk from a stock market meltdown and due to fears that nearly half of Tether\u2019s reserves are made up of commercial paper, amounting to nearly $30 billion. This is enough for Financial Times to place<\/a> Tether among \u201cglobal giants\u201d in that category.\u00a0<\/p>\n

Related:\u00a0Record-high inflation prompts investors to take a closer look at Bitcoin<\/em><\/strong><\/p>\n

However, Tether has\u00a0denied<\/a> that it holds any commercial paper from Evergrande, though it may be exposed to Chinese companies. Commercial paper is a corporate debt note with a short expiration date, usually under a year.<\/p>\n