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Hong Kong is a city in the People's Republic of China (CNN Business) Bitcoin is dropping as investors get concerned about the Evergrande crisis, which is sweeping through global markets.
According to cryptocurrency tracker Coindesk, the digital currency has lost 5.7 percent in the previous 24 hours and is currently trading at $42,955 per coin as of 2:43 a.m. ET on Tuesday.
Earlier, the stock had fallen as much as 12 percent.
Other cryptocurrencies are also seeing a downturn. Ethereum and dogecoin have each experienced a 4.4 percent and about 6 percent drop in the last 24 hours, respectively.
It came after a sharp plunge in US markets on Monday, as Wall Street's concerns turned to the Chinese government. Investors have been more concerned about the deteriorating financial situation of Evergrande, a large Chinese property giant that is on the verge of going bankrupt.
The S& P 500 (SPX) and the Nasdaq Composite (COMP) both had their worst day since May, while the Dow (INDU) had its worst day since July, according to CNBC.
Experts have regarded Evergrande's problems as a big test for Beijing, with some expressing concern that the business may be on the verge of becoming China's Lehman Brothers, as was the case in 2008. Despite the fact that some observers believe it is unlikely that Evergrande's problem would become a worldwide event of the same magnitude, the issue has sent shockwaves throughout the world.
According to Bloomberg, the real estate company, which is battling to manage its $300 billion mountain of debt, was scheduled to pay the interest on some of its bank loans on Monday but failed to do so. In response to a request for comment on the payments, Evergrande did not provide any information.
According to Refinitiv, the company's interest on two of its bonds totaling more than $100 million comes due later this week as well. Evergrande's stock plummeted 5.7 percent in Hong Kong on Tuesday, adding to the company's losses from the previous day
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Despite the fact that the company's primary customers are in mainland China, investors throughout the world are concerned. The huge amount of money borrowed by Chinese corporations has long been regarded as a looming danger to the stability of the Chinese stock market. Investors are now concerned about the potential exposure that banks may have to Evergrande and similar firms.
Goldman Sachs (GS) and JPMorgan (JPM) were among the poorest performances on Monday, according to the Dow Jones Industrial Average.
The issue had already begun to weigh on Hong Kong markets earlier in the day, with Chinese banks, insurers, and other real estate businesses all taking a hit as a result of the fallout.
On Monday, Edward Moya, senior market analyst for the Americas at Oanda, stated that bitcoin was no different from other assets in terms of price movement.
According to him in a message to clients, "the impact from the Evergrande is creating a significant dent in risk appetite, which is pushing everything lower."
The cryptocurrency market, according to Moya, has fared well this year "despite all of the turmoil."
"It should come as no surprise to Wall Street that they are the first asset sold at the beginning of the China-driven market selloff," he continued, as investors seek to profit from the downturn.
Others have taken advantage of the situation to increase their stakes. Nayib Bukele, the president of El Salvador, who is well-known for his optimistic attitude on bitcoin, said on Monday that "we simply purchased the drop" in the cryptocurrency market.
He went on to say that the nation had acquired 150 bitcoins and now had 700 coins in its possession.
Bukele declared earlier this month that El Salvador had become the world's first government to recognize digital money as legal cash, making it the first country in the world to do so.
The following are written by Anneken Tappe and Laura: He was a contributor to this article.
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