The price of Bitcoin and other crypto prices slid on Monday, as ongoing worries over a possible default at Chinese conglomerate Evergrande Group shook global markets.
The drop for those digital assets — as well as markets broadly — came as Evergrande, a real estate giant in China, contends with mounting debt. And they follow broader scrutiny of cryptocurrencies in China and the U.S.
Meanwhile, the cryptocurrency exchange Coinbase (COIN) said it had decided not to launch a crypto lending program after the SEC threatened to sue.
The price of Bitcoin fell 7.9% to $43,914. Ethereum lost 8.3% to $3,074. Cardano skidded 9% and Dogecoin 11%.
“Concerns about the Chinese property market and fears that the Fed might hold back some of the monetary stimulus are the primary drivers for this uncertainty,” said Dan Raju, CEO of the online broker Tradier.
Fawad Razaqzada, analyst at ThinkMarkets, said in emailed commentary said the fallout from Evergrande could ripple through China’s economy.
“Chief among investor worries has been Evergrande’s debt woes and its potential spillover on other property developers, lenders and other sectors — not only in China, but elsewhere too,” he said.
“Investors are not sure whether Chinese authorities will be able to contain the fallout from a possible disorderly collapse of the heavily indebted company.”
Evergrande’s debt has been estimated to be at more than $300 billion. The developer also has wealth-management and electric-vehicle segments, and other businesses.
The company had interest on loans due on Monday, but China’s government has warned banks they wouldn’t get it, according to reports. Evergrande also has millions in interest on company bonds due this week.
Rob Brewis, fund manager at Aubrey Capital Management, said it would take “a decade or more” to unravel Evergrande’s debt. That debt, he said, had been accumulating for years.
Coinbase Bails On Lending Program
The price of Bitcoin and other crypto prices have taken hits this year, as China cracks down on crypto-related activity and tries to exert more control over other industries. U.S. regulators have also started paying more attention to the space.
Coinbase added an update to a blog post saying that as of Friday, it had decided not to launch a lending program that would allow its users to earn interest on the stablecoin USD Coin.
Coinbase also discontinued the waitlist for the program. It said “hundreds of thousands of customers” nationwide signed up. The exchange said it was continuing to “seek regulatory clarity” for the crypto industry.
“We will not stop looking for ways to bring innovative, trusted programs and products to our customers,” it said.
Coinbase said this month that the SEC had threatened to sue it if it launched the program. The crypto exchange expressed confusion over the threat, and at the time delayed the launch of the program to “at least October.”
The SEC, Coinbase’s CEO said on Twitter, told the company its lending feature constituted a security, potentially putting it under the agency’s oversight.
SEC Chair Gary Gensler told a Senate committee last week he had asked staff to look at crypto assets.
“Right now, large parts of the field of crypto are sitting astride of — not operating within — regulatory frameworks that protect investors and consumers, guard against illicit activity, and ensure for financial stability,” he said.
YOU MAY ALSO LIKE:
Business News Governmental News Finance News