The overall cryptocurrency market dropped today by more than 10% on Monday September 20, 2021. The total market cap recorded on coinmarketcap.com rescinded down by as much as $200billion USD within the 24 hour period.
Bitcoin closed the day down by -9.08% dropping to $54,853. Ethereum -10.9% at $3788 and Cosmos -23.5% dropping from $56.53 to $43.26.
The crash in the crypto market is thought to be tied to the sharp decline in the stock market, as the DOW sheds over 840 points on Monday morning before closing down 614 points for the day.
Investors weigh the default risk of a Chinese real estate developer, China Evergrande Group, as they are expected to miss interest payments on debts this week. Evergrande is one of China's largest property developers, and it's default on $300 billions of debt, could threaten to cascade over into other parts of the global economy.
There has been rumours swirling the social networks surrounding the Tether stablecoin USDT that it's coin is collateralized by debts issued by Evergrande. The fear could cause a sell-off and instability of Tethers stablecoin which has prompted Tether to declare that it doesn't hold short-term debt issued by Evergrande.
Expect some volatility ahead this week as the Evergrande fiasco unfolds. We can expect to see some more downward pressure ahead as investors realize some profits and reduce their risks. On the other hand, if a bailout is on the table for the real estate developer, one could argue that more money printing is on the way, which tends to bode well for cryptocurrencies like Bitcoin as a hedge to inflation.
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