Evergrande’s Debt Default Sparks Fears in Market
Evergrande has defaulted after missing an $82.5 million debt repayment.
Some fear that the update could negatively impact global markets.
Evergrande shares hit a record low Wednesday, while Bitcoin, gold, and stocks are down today.
Share this article
Chinese real estate giant Evergrande Group has defaulted on its dollar debt for the first time.
Evergrande Defaults on Repayment
Evergrande has defaulted.
The Chinese real estate developer missed an $82.5 million debt repayment on U.S. dollar bonds worth due Monday, according to several reports.
The default has led to widespread speculation that Evergrande is now bankrupt, though the firm is yet to post any official declaration of insolvency. Moreover, new worries have emerged about the potential spillover into China’s real estate sector and impact on the global economy.
The Shenzhen-based firm owes more than $300 billion to various parties, including investors, banks, and suppliers. Notably, Evergrande is not the only major Chinese real estate firm currently facing a crisis. This week, the Hong Kong Stock Exchange suspended Kaisa Group Holdings’ shares after the company missed a Tuesday deadline to pay off a $400 million debt.
Due to these developments, many experts have predicted an economic downturn in 2022. It’s possible that such an event could have a big impact on crypto markets, too. Bitcoin and other assets have behaved as “risk on” in other similar circumstances such as “Black Thursday” in March 2020, when global markets crashed amid panic over Coronavirus. Bitcoin also reacted negatively to the news of the new Omicron variant and has mostly been trading sideways since.
However, some leading crypto figures remain skeptical of the potential impact of the event. Emin Gün Sirer, the founder and CEO of Ava Labs, suggested that it’s unlikely that the latest default will crash crypto. “How many times can the same dumb company, whose near-insolvency was an open secret for almost a decade, crash the crypto markets?” he wrote in a Dec. 6 tweet.
Another important part of the Evergrande crisis is its alleged link with Tether’s USDT, the world’s most liquid stablecoin. A recent Bloomberg BW investigation claimed that Tether is using commercial paper issued by large Chinese real estate companies to back a significant portion of its stablecoin reserves. Tether published a blog post alleging that Bloomberg BW was spreading “misinformation” and denied holding any Evergrande debt at the time.
Evergrande’s shares hit a record low of HK$1.72 Wednesday, while gold and stock indexes like the Dow Jones Industrial Average slid today. Bitcoin, meanwhile, is currently trading at $48,650, down 3.4% in the last 24 hours. The leading crypto asset has tumbled 30% from its all-time high price of roughly $69,000 recorded in November.
Disclosure: At the time of writing, the author of this piece owned ETH and other cryptocurrencies.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
Crypto Market Slides Over Fears of New Covid Variant
Bitcoin and Ethereum appear to have reached a crucial support level after posting considerable losses on the news of a new Covid variant in South Africa. The significant demand wall could…
Investing Survey: Win A $360 Subscription To Pro BTC Trader
We’re doing this because we want to be better at picking advertisers for Cryptobriefing.com and explaining to them, “Who are our visitors? What do they care about?” Answer our questions…
Tether Owns Billions In Chinese Debt: Bloomberg Report
A Bloomberg report has claimed to have found that Tether holds billions of dollars worth of Chinese commercial paper. Investigation Raises New Concerns Today, Bloomberg BusinessWeek reported that stablecoin issuer…
Morgan Stanley Increases Bitcoin Exposure
According to the latest U.S Securities and Exchange Commission (SEC) filings, Morgan Stanley has added to its Bitcoin exposure through the Grayscale Bitcoin Trust, raising hopes for potential Grayscale Bitcoin…