According to reports, China’s second biggest property developer, Evergrande Group, is in debt for nearly $300 billion, sparking fears that its collapse might lead to an even wider financial crisis.
Barely 2 minutes after Evergrande was due to pay up its debt, the Deutsche Markt Screening Agentur (DMSA) issued a statement on Nov. 10 at 4 p.m. UTC noting that it would begin bankruptcy proceedings against Evergrande.
By about 6 .p.m. UTC (nearly 2 hours of the announcement), Bitcoin started it’s hours-long pullback to $62,800.
The confusion started when media outlet Morning Brew first reported at about 4:45 pm that Evergrande had defaulted on paying its outstanding debt which was supposed to have been paid up by Wednesday at 4 p.m. UTC . It took Bloomberg another 45 minutes to debunk the reports, stating that it hadn’t.
Bitcoin price later settled around $64,500 several hours after the initial dip. Probably as a result of Bloomberg reporter Allison McNeely’s tweet that Evergrande did not default on payments.
Fears Still Persist
Many still believe that Bitcoin price is not totally safe right now, and could also be at risk from a stock market meltdown. Not only that, there are also fears that nearly half of Tether’s reserves are made up of commercial paper, worth around $30 billion. For that reason, the Financial Times to placed Tether alongside other global giants in that category.
Meanwhile, Tether has denied that, although it may be exposed to Chinese companies, it does not hold any commercial paper from Evergrande.
A commercial paper refers to a corporate debt note that comes with a short expiration date — usually less than a year.
