In China, embattled real estate giant Evergrande faces a major moment of truth this week. The company owes an estimated 300 billion dollars, and is expected to default on bond payments.
Evergrande operates and develops 1,300 real estate projects across China and employs 200,000 people. The company financed its breakneck expansion with credit and bond issues. But the pandemic has paralyzed its operations. Its debt equates to two percent of Chinese Gross Domestic Product.
Evergrande was always thought to be ‘too big to fail.’ If it topples it could take a number of banks down with it, like Lehman Brothers did in 2008.
The risk of defaulting has prompted a sell-off. Evergrande stocks have lost 80 percent of their value since the start of the year.
Bitcoin and other cryptocurrencies were crashing Monday amid a global selloff in risk assets.
The tumble appears to have been triggered by the mounting problems at embattled property giant China Evergrande Group.
Bitcoin, the world’s largest cryptocurrency, was off 7% Monday to around $44,000. Ethereum, the second-largest cryptocurrency, was down 8% at around $3,100. Smaller coins were also posting declines, including Cardano, Binance, XRP, Solana, and Polkadot—the latter off 13% to $29.48.
#Evergrande's collapse has begun by entering technical default.
Evergrande, by itself, is likely to default on more debt in value than the ENTIRETY of all assets that imploded during the entirety of the US subprime crisis.
— Bitcoin (@Bitcoin) September 19, 2021
Another Chinese property developer collapsed this afternoon in Hong Kong (dropping a massive 87%) before it was halted. Shanghai based developer Sinic…racing #Evergrande to the bottom. Get ready for a banking crisis in #HK AND #China pic.twitter.com/nn7LoZkHaw
— 🇺🇸Kyle Bass🇺🇸 (@Jkylebass) September 20, 2021
h/t Digital mix guy