Developments in the Evergrande affair: former directors of the company were arrested and detained. While the real estate giant is on the verge of bankruptcy, the crypto market could indirectly suffer the consequences. Indeed, the fall of this company could cause significant movements on Bitcoin, the queen of cryptos
Two former Evergrande executives arrested
The crypto community remains attentive to developments in the Evergrande affair, due to Tether’s exposure to this company.
Recently, Chinese authorities detained two former Evergrande executives as part of the ongoing investigation into the company’s collapse. According to Caixin Global, they are Xia Haijun, the former CEO, and Pan Darong, the former CFO. The reason for their arrest? They are suspected of having committed fraudulent acts which contributed to the fall of the company.
Indeed, they were responsible for the company’s finances before resigning in July last year.
The bankruptcy of China Evergrande has already had a significant impact on the global economy. Some experts even compare this event to the Lehman Brothers crisis in 2008. Now they fear that the problems of this company will also affect the cryptocurrency market and the price of Bitcoin.
In fact, Bitcoin suffered a 2.7% decline yesterday following an announcement from the company. This situation is causing concern within the crypto community, with the price of BTC falling to $26,300. Many people even believe that Evergrande could cause the price of Bitcoin to fall again.
Tether, which is exposed to the bankrupt company, the stablecoin that accounts for about 70-80% of Bitcoin’s transactions.
Could Bitcoin experience a new bearish wave?
The flagship crypto has already experienced several drops in value, caused by the collapse of certain companies, mostly exchanges. One of the most notable examples was the collapse of FTX in November 2022. Which led to a nearly 25% drop in the value of Bitcoin.
Even though this major real estate company is not a digital asset exchange, its connection with Tether could create significant disruption in the crypto market, particularly Bitcoin. In fact, its situation may even represent the greatest collapse in the global economy on a large scale.
If Bitcoin follows a similar scenario to FTX’s bankruptcy, its price could fall back to around $19,800. This would mean a potential 25% drop from the current BTC price.
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