On Tuesday, Bitcoin prices rebounded from one-and-a-half-month lows after a massive selloff overnight. Triggered by fears of a potential debt default by property developer China Evergrande (3333. HK) eased marginally, but investors prepared for further turbulence.
Bitcoin Bounces Back
The most popular and well-known cryptocurrency, Bitcoin was trading at $43,000 after falling to $40,192 earlier in the day. On September 6, it reached a four-month high of $52,000.
After dropping below $3,000 for the first time since early August, Ether gained 1% to $3,012.
Fears that Evergrande’s problems might have ramifications for the Chinese and global economies triggered a selloff in riskier assets. Therefore, sending global markets into a tailspin.
The Fear of Evergrande
“We can’t take a very positive view just as yet until we get through the next few days,” remarked Matthew Dibb, CEO of Stack Funds, a crypto index fund provider located in Singapore.
“This is purely sentiment-driven right now, and it’s actually been off very low liquidity,” he noted, adding that it’s preferable to stay away from crypto markets because the contagion will continue to damage them.
The decline in cryptocurrency prices comes as institutional interest in the area has grown. Therefore, making it more mainstream, with many investment banks adopting a more optimistic view.
