The cryptocurrency market has rebounded in the past 24 hours as news broke that China Evergrande Group, the second largest property developer in the world’s most populous nation, has taken a step back from falling off a potential debt cliff today.
Fast facts
- While the overall cryptocurrency market is still down for the week, all major tokens saw a significant price bump early this morning Asia time, with Solana and Polkadot being the biggest movers in the top 10, each up 17% in the 24 hours before publishing time, according to Coinmarketcap.com.
- Market leaders Bitcoin and Ethereum prices were up 5% and 9%, respectively, with the world’s largest cryptocurrency resuming above US$43K and Ether reaching US$3K early this morning, Asia time. Cardano recovered 11%, regaining its third spot position that it had lost to Tether in Tuesday’s market crash, and is trading at US$2.28 at publishing time.
- Uncertainty about Evergrande’s ability to meet bond repayments sent global markets reeling earlier this week, with the prospects of a default and any domino effects evoking comparisons to the Lehman Brother collapse that triggered the 2008 global financial crisis.
- Evergrande announced Wednesday that it has resolved one coupon payment — a Shenzhen-traded 5.8% bond that matures in 2025 — that was due today. Global markets and not just crypto responded positively to the news, with the Dow Jones, S&P 500 and Nasdaq all showing strong recovery in the past 24 hours. The celebrations could yet prove short-lived, however; as it is still uncertain if the indebted firm can pay a different US$83.5 million bond payment due today. Evergrande also has another US$475.5 million payment for March 2024 notes due on Sept. 29.
- “The encouraging thing is that there’s news; it’s not gone silent. I think if it was totally silent, then everybody would be very worried,” Andrew Sullivan, founder and writer for Asianmarketsense.com, told Forkast.News. “The fact that we have had some positive news is encouraging, but I think we still need to wait to see the detail [of the payment].”