Why Did Crypto Markets Crash Today? Is the Crash Just Due to Global Market Fear?
Today, the decline in stocks in the global market and the perception that the Chinese real estate giant Evergrande, which ranks 122nd among the world's largest Fortune 500 companies, may go bankrupt, caused fear in global markets. The decline in the global markets and the dominance of fear negatively affected the crypto markets, and almost many cryptocurrencies declined rapidly today. Was this really the only reason for the decline in the crypto markets?
The Chinese real estate giant Evergrande, which ranks 122nd among the Fortune 500 companies, where the 500 institutions with the largest income in the world are listed, is experiencing a major economic problem. According to the information on the company's official website, the total value of the assets held by the Evergrande Group is over $355 billion. Its total debt is said to be $305 billion. It has been stated that Evergrande Group will not be able to make the loan interest payments due on September 20. This caused the news that the company would go bankrupt. But the company denied reports that it would go bankrupt. According to the Evergrande Group's statement, it owes mainly to investors who are Chinese citizens. It has about $7 billion in debt that it has to pay off to non-Chinese investors.
The economic distress experienced by Evergrande Group had a negative impact on global markets. Many stocks crashed today but then started to recover. The S&P 500 started the day from 4382, today it went down to 4300, but later recovered and rose to 4357.
The economic distress experienced by Evergrande Group negatively affected the global markets as well as the crypto markets. Bitcoin (BTC), the most valuable coin by market cap, declined by about 12% today to $42500. It is currently trading at $43669. Similarly, many coins fell by double-digit rates. But I think they will recover quickly in the coming days.
I think that the downturn in the crypto markets is not just about the fear in the global markets. In these and similar situations, some whales have always taken advantage of the opportunities. Generally, these whales first sell large amounts of crypto assets at a time of negative news or rumors, pump fear into the market, then start to collect again at the dip price. In such cases, I suggest you be more careful not to lose your assets. If the news is absolutely true, of course, it may be more profitable to sell assets beforehand. But if the news is false, you can lose their assets. In short, you become food for whales.
Economic troubles of companies or countries can significantly affect centralized global markets. But I don't think it will affect the decentralized crypto markets in the long run. I also think that the economic crisis in the global markets will positively affect the crypto markets.
I think crypto markets will recover again in the coming days. But Bitcoin's sudden drops between $42000 and $50000 make some whales very happy. Therefore, sudden drops like today may happen a few more times, but after Bitcoin exceeds $ 50000 permanently, it will accelerate its rise. Similarly, altcoins will rise rapidly. But I think that strong cryptocurrencies, especially ETH, BNB, HIVE, will rise faster. I also recommend that you closely follow the developments regarding the crypto assets you invest in. Finally, don't be emotional, be smart and stay calm!
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