China Evergrande Group (OTC:EGRNF) has defaulted on its debt obligation, according to a report from Al Jazeera.
What Happened: The debt-ridden Chinese real estate giant was declared to have defaulted on more than $1.2 billion worth of bonds as confirmed by Fitch ratings on Thursday.
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The first official default has sparked fears that the company will further default on its $300 billion debt obligation and the cascading effects could play out into cryptocurrency markets.
The market-leading digital asset Bitcoin (CRYPTO: BTC) fell back to $49,000 after briefly recovering above $51,000 on Wednesday. Altcoins such as Ethereum (CRYPTO: ETH), Solana (CRYPTO: SOL), and Dogecoin (CRYPTO: DOGE) also traded lower, largely moving in tandem with Bitcoin.
Some industry proponents hypothesized that the default could spur a massive correction in the days to come.
“Evergrande holds assets valued at 2% of China’s GDP in 2020. In comparison Lehman Brothers was holding assets worth about 4% of US's GDP in 2007,” said one crypto analyst on Twitter.
“Could be a massive cross-border cross-platform cross-ecosystem sell-off/shakeout if this company isn't bailed out on time.”
However, at the time of writing, no data suggested that any panic selling had yet ensued following Evergrande’s default news.
Symmetrical triangles are continuation patterns. Since we came from a dump, we may see 42k #Bitcoin again? With all the FUD on Evergrande, this may happen. Let's also see what the traditional markets $SPX will do. I hope I'm wrong :) pic.twitter.com/MouU3gCcuF
— juvarabrera.eth (@JuvarAbrera) December 9, 2021
Photo by Pen Tsai on Unsplash