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The crypto markets yesterday celebrated Bitcoin’s new all-time high of nearly $67,000. In contrast, investors in the stock markets are holding their breath because of Evergrande.
Bitcoin drags the crypto market
Bitcoin’s new ATH has dragged the crypto markets, which are now largely in the green. The main beneficiary was Ethereum, which gained 7% to $4,200, just short of its all-time high of $4,300 in May.
Solana stands out once again: the sixth-largest cryptocurrency by market capitalization jumped 17% to $187. SOL also seems to be on its way to recovering its previous all-time high of September 9, when it touched $216.
Bitcoin, for its part, is hovering just under $65,000 today, gaining 1% over 24 hours. The launch of the first Bitcoin ETF listed on the NYSE has resulted in the boost that everyone has been waiting for in order for BTC to hit new highs. After the slight setback of these hours, there is anticipation for the launch of the next ETF which will be VanEck‘s. The debut is expected on October 25.
Evergrande worries the Asian markets
In contrast to the crypto markets, the stock exchanges are watching what is happening to Evergrande with concern. The Chinese real estate giant has announced the failure of negotiations with Hopson Development Holdings, to which it was to have sold 50.1% of the shares in its real estate services subsidiary Evergrande Property Service Group. This means that Evergrande is facing a liquidity crisis that is bringing it to the brink of collapse.
The purpose of the sale was to raise money to meet at least part of its obligations to creditors. Evergrande has debts of more than 300 billion dollars, but the Beijing government is not currently intervening to save it. A default would be a severe blow to the Chinese economy and could have consequences for the rest of the world.
This explains the tension on the markets: Evergrande closed today’s trading on the Hong Kong stock exchange at -12.54%. The performance of Evergrande affected the entire Asian market, with Hong Kong closing down -0.45%.
The Chinese giant was unable to reassure investors, having announced that there are currently no guarantees that Evergrande will be able to satisfy creditors.
Bitcoin benefits from market tensions
This state of uncertainty in the stock markets is certainly contributing to the new rally in Bitcoin, which is increasingly seen as a store of value.
Indeed, investors are shifting their attentions from common stocks to the cryptocurrency market. This also explains the huge success of the first Bitcoin ETF. BITO has already reached $1 billion in AUM (assets under management) which is a sign that there was a segment of institutional investors who were just waiting for the right opportunity to get into Bitcoin. It has finally arrived.