The dependence of cryptocurrencies on major world events is intensifying. The crisis of two Chinese giants, Kaisa and Evergrande, results in a fall of Bitcoin and Ethereum. What to call into question the reputation of “safe haven” of cryptocurrencies?
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[EN VIDÉO] How does cryptocurrency work? Like Bitcoin, today there are more than 6,000 cryptocurrencies in the world. These currencies are based on blockchain technology.
We have known for several years that certain events punctuate the growth of Bitcoin, and from there, the entire sector of this cryptocurrency. For the record, the surprise election of Donald Trump to the presidency of the USA was followed by the rise of this electronic money in 2017. More generally, Bitcoin and its cronies such as Ethereum or BNB seem to be more and more impacted by events which, in the past, only affected the stock exchange.
The fall of December 3
Bitcoin began its first fall on December 3 which has been attributed to disturbing news related to the South African variant of the Covid-19. In a few hours, this currency which had climbed to 57,000 dollars fell by 17%. However, after various ups and downs, Bitcoin seemed to have resumed vitamins.
And then, Bitcoin suddenly lost more than 5% of its value, positioning itself at around $ 48,000, followed by almost the entire sector of cryptocurrency. Ethereum, which had climbed to $ 4,700 is now approaching the $ 4,000 threshold and may even fall below.
The crisis of two Chinese promoters reflects on the price of Bitcoin
This time, the surprise comes from the fact that the price of Bitcoin seems to have been impacted by the announcement of the crisis by two major Chinese real estate developers, Kaisa and Evergrande Group. The first is in default of $ 400 million on loan interest, and the second has similarly failed to make a major repayment. This crisis is partly due to the drop in housing sales in China but also to restrictions operated by the government of that country in matter of loans.
the Nasdaq, an index of American technology stocks, lost more than 1% and the S&P 500, an index based on 500 large American companies listed on the stock exchange, also began to fall. Bitcoin and all cryptocurrency followed an equal bearish movement.
This increasingly strong dependence of Bitcoin on the traditional market has something to surprise those who once wanted to believe that this currency could represent a bulwark against inflation and the upheavals of the economy. Clearly, this dependence has increased since large investment funds decided to place part of their assets in cryptos.
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