Conflicting news about whether the Chinese real estate giant Evergrande had defaulted on its overdue loan payments appeared just before Bitcoin’s recent price crash.
Evergrande Group is China’s second largest real estate developer and has debt of around $ 300 billion. There are fears that the collapse could trigger a broader financial crisis.
Two minutes after Evergrande’s payment was due, Deutsche Markt Screening Agentur (DMSA) issued an announcement on November 10 at 16.00 UTC that they were preparing bankruptcy proceedings against Evergrande.
Two hours later around kl. At 1[ads1]8.00 UTC, Bitcoin began its hour-long withdrawal to $ 62,800.
Media sales Morgenbrygg reported approximately 45 minutes later that Evergrande had missed a payment on its outstanding debt due on Wednesday at 16 UTC and defaulted. Another 45 minutes passed before Bloomberg released a story saying it had not done so.
Prices stabilized around $ 64,500 several hours after the first fall. This was about the same time Bloomberg reporter Allison McNeely’s chirpinged “Contrary to what you may have heard ~ on the internet ~ Evergrande did not default today.”
William Fong, senior trader at the Australian investment platform Zerocap for cryptocurrencies, told Cointelegraph:
“Evergrande has not officially defaulted on any of its offshore debt obligations in the international USD bond market.”
“The bottom line, $ 148 million is nothing compared to the $ 300 billion outstanding debt to Evergrande, but it raises concerns about the $ 100 billion outstanding ‘hold-well’ structured offshore bonds from Chinese SoEs and companies,” he said.
Fong believes that a rescue operation for Evergrande will not come first because “Chinese regulators were the initiators of a roof aimed at over-expanding the developer’s influence,” adding:
“This has created potential risk of infection throughout the real estate development area and has expanded towards financial institutions and industries that are also dependent on the sector.”
Some believe that the Bitcoin price may also be in danger of a meltdown in the stock market and due to fears that almost half of Tether’s reserves consist of commercial securities, which amount to almost 30 billion dollars. This is enough for the Financial Times to place Tether among “global giants” in that category.
Related: Record high inflation asks investors to take a closer look at Bitcoin
However, Tether has denied that they have commercial papers from Evergrande, although they may be exposed to Chinese companies. Certificate is a corporate promissory note with a short expiration date, usually less than one year.