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Cryptocurrencies Suffer Another Unexpected Crash With $250 Billion Wiped Off Value

Cryptocurrencies Suffer Another Unexpected Crash With $250 Billion Wiped Off Value

Analysts believe at least two major factors are behind the massive crash.

Stewart Perrie

Stewart Perrie

Cryptocurrencies have suffered another crushing crash with an estimated $250 billion in value wiped off.

Bitcoin plunged 9 per cent, Cardano and Ethereum also lost around 10 per cent as all major crypto assets fell into the red.

Analysts are looking into the issue and believe two main factors are at play here.

Digital asset broker GlobalBlock's Jonas Luethy reckons the growing problem of Evergrande is a big driver in what's happened in the crypto markets.


Evergrande is China's second-largest real estate company and they have recently told banks they won't be able to repay their debts this month.

More than $300 billion in liabilities have been highlighted and shares in the company have fallen to their lowest levels in 11 years.

Analysts fear the company could be about to experience its own 'Lehman moment', referencing the US investment bank that collapsed at the onset of the Global Financial Crisis in 2007.

The issue has already sparked a much wider effect on global markets, with the Dow Jones falling 600 points in response to the uncertainty.

David Bahnsen, wealth advisor from The Bahnsen Group, said in a statement: "There isn't enough clarity on how Evergrande's challenges may affect the global economy and that uncertainty is enough to spook markets.

"This market has experienced almost no downside volatility for a long time, and a pullback was long overdue."

Bloomberg is also reporting that Binance, the world's largest crypto exchange, is now under investigation.


US regulators are looking into the company over allegations it was involved in insider trading and market manipulation.

While the news of another crypto crash will be devastating for people all over the world who had money tied up in the virtual currency, it's being welcomed with high spirits in at least one place.

El Salvador became the first country ever to accept Bitcoin as legal tender and citizens are now able to use the crypto asset to pay for anything they want.

As the price of Bitcoin was plummeting, the Central American country seized the opportunity to get more.

Salvadoran President Nayib Bukele tweeted: "We just bought the dip. 150 new coins! El Salvador now holds 700 coins. They can never beat you if you buy the dips. Presidential advice."

Those 150 coins represent around US$6.7 million, which is no short change. And their total investment now represents US$30.5 million.

Featured Image Credit: Alamy

Topics: News, Cryptocurrency