Bitcoin's uptrend in 2021 came to an abrupt end in June when Chinese regulators banned cryptocurrency miners. Bitcoin, the Ether and almost all other cryptocurrencies fell sharply on Monday night, which again appears to be linked to China's activity, albeit for a different reason this time.
The price of Bitcoin has fallen more than 11% in the last 24 hours. The cryptocurrency came close to falling below $ 40.000 when it fell to $ 40.500 at 5:30 p.m. time PT. It would be the first time the price of Bitcoin has fallen below $ 40.000 since early August. The all-time high of Bitcoin was $ 64,863 on April 14.
The second largest cryptocurrency, Ether, and the most widely used cryptocurrency trading, has fallen 12% in the last 24 hours. It is just over $ 2.900, the first time it has fallen below $ 3.000 since August 8. The Dogecoin is close to 20 cents, compared to the highest level that reached 70 cents in May.
Being a decentralized system, it is often difficult to say exactly what is causing cryptocurrency markets to collapse. However, Monday's fall is believed to be linked to the Chinese real estate market and especially the Chinese company Evergrande Group. Evergrande is the most indebted real estate company in the world, with debts in excess of $ 300 billion, and markets around the world have declined for fear that China will allow Evergrande to default.
The Dow Jones industrial average fell 1,78%, while the Hong Kong Hang Seng Index fell 3,38%.
If the Evergrande fails to cope, it could have a dramatic impact on China's entire economy, which in turn could affect countries around the world. The collapse of the Evergrande was likened to the bankruptcy of Lehman Brothers that preceded the global financial crisis, although its impact is unlikely to be so severe. Shares of Evergrande fell 85% last year and its offices across China have received protests from employees, builders and homeowners.
It was definitely a tumultuous month for Bitcoin, which rose in late August and early September in anticipation that cryptocurrency would become legal tender in El Salvador for the first time. The availability of Bitcoin from El Salvador, however, had technical issues, which apparently scared big investors and caused big sales.
Chinese authorities caused cryptocurrency markets to plummet in June after officials made it clear that the 2013 ban on mining and other cryptocurrency-related services would be tightened. It is part of a larger crackdown on tech companies in China right now, which has seen authorities target companies like Ant Group, Didi and ByteDance.