[NEW] Cryptocurrency market falls across the board following reports of China Evergrande Group filing for bankruptcy and SpaceX selling Bitcoin

The cryptocurrency market fell across the board on the 18th. Bitcoin (BTC) temporarily plummeted to the 25,000 dollar range. At the time of writing, it was bought back to around 26,500 dollars (approximately 3.85 million yen), about 7% lower than the previous day.

Major altcoins such as Ethereum (ETH) also saw a temporary large drop, but are now gradually recovering in price, just like Bitcoin.

One of the factors that led to the decline in the cryptocurrency market is the filing of Chapter 15 bankruptcy protection by China Evergrande Group, a major Chinese real estate developer, in New York. This has led to a stronger movement to withdraw from risk assets, including cryptocurrencies.

If the application of Chapter 15 of the bankruptcy code is approved, the protection of China Evergrande's assets in the United States will be guaranteed. This will allow the company to avoid seizures from creditors and work on restructuring its business. The company's total debt is said to be about 48 trillion yen in Japanese yen.

Country Garden, another major Chinese real estate developer, is also on the brink of bankruptcy.

Country Garden has not made an interest payment due on the 7th of this month, and will default if it does not pay within the 30-day grace period. The company's total debt as of the end of 2022 will be approximately 28 trillion yen, a size comparable to that of China Evergrande.

In addition, major real estate companies in China have been announcing losses one after another, raising concerns about bankruptcy and default. Given this background, China Evergrande's bankruptcy filing once again exposes the slump in China's real estate market and highlights the extremely severe situation.

In addition, reports that SpaceX, a private space development company led by entrepreneur Elon Musk, sold its Bitcoin holdings were also viewed negatively in the cryptocurrency market. According to the Wall Street Journal, SpaceX has sold all of its Bitcoin holdings, worth approximately $373 million (approximately 54.3 billion yen).

The cryptocurrency market fell due to reports of China Evergrande's bankruptcy filing and SpaceX's sale of Bitcoin, but one of the reasons for the increased risk-off movement is the growing sense of caution due to the rise in U.S. Treasury yields.

This is thought to be due to the fact that the minutes of the FOMC (Federal Open Market Committee) released on the 17th suggested additional interest rate hikes due to inflation concerns.

On the 25th of this month, Federal Reserve Chairman Powell will give a speech at the Jackson Hole meeting hosted by the Federal Reserve Bank of Kansas City.

The remarks made by the Fed chairman at this annual symposium attract attention every year, and this year is expected to be no exception as the market will attach great importance to them.

Reference:Wall Street Journal
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